Evaluating ERPs is one of the most difficult tasks any industrial manufacturer undertakes. All ERP systems claim to do everything, and they always look great in the Sales Demo.
Below is a Top Ten list of Critical Criteria for Industrial Manufacturers, that can be left to assumption during Sales Demos. If any are ‘must haves’, you might want to focus your due diligence on confirming if they are real. Even the most comprehensive Sales Demo will never provide this assurance.
Every ERP claims to include ATP (available to promise) and CTP (capable to promise). However, many only allow these lead time calculations during order creation and not during estimating (when it is most useful). Are sales able to sit down with production, to discuss ‘What if’ simulations that will satisfy both, and still win the new business? And during estimating, if the customer agrees to the promised date but must get back to you for the order, are you able to save that capacity/lead time for that customer?
Every ERP’s definition of scheduling is different, just as everyone’s definition of ERP is different. Is Scheduling your material plan enough (MPS)? Or do you want to balance the shop floor, to maximize shop throughput without increasing your overhead (thereby, increasing profit)? Do you want to drag and drop Work Orders across a Gantt chart, or do you want to be able to compare on-time delivery simulations versus the impact on your bottom line? If your shop is dynamic and has continual rush orders, can you utilize a Finite Capacity Scheduler at all? Does the ERP vendor offer ‘What if’ scenario profitability metrics or other scheduling tools, that require less management and are still effective?
Watch our Infor CloudSuite Industrial Advanced Planning & Scheduling complementary training video:
Most ERPs force you to place subassemblies into stock before issuing to the next level up. You lose the cost breakdown visibility as well as the scheduling capabilities (having to manually update the schedule for each sub). Do you often wonder, mid-WIP, whether you are making any money at all? Assure your Make To Order sub-assemblies retain the complete cost breakdown through each stage of the entire build. Without the costs, maintaining the schedule becomes manually intensive and onerous.
Authorizations, revisions to parts and documents, messages, triggers, policing policies and procedures, and workflow need to be pervasive throughout any ERP, particularly for highly regulated ETO manufacturers, like Aerospace and Defense or Medical Device Manufacturers. Are they easy enough for a new employee to quickly get up to speed on creating and maintaining them?
Watch our complementary Infor VISUAL training video:
Most ERPs claim to accumulate Actual Job Costing. Some give it a different moniker like ‘Actual Average’ or they bury Purchase Price Variances (PPV) in a GL account. Have you ever closed a Job and received a material invoice afterwards that has a variance from the original PO? Is burying that variance in a PPV, GL account acceptable to you? Or would you rather post the Actual Cost Variance against the specific job, so for future quoting/estimating you know the exact costs on similar, historic jobs?
Do you have to wait to run MRP before updating your material plan? Or will material plans, updated in real time, allow you to react quicker? Most ERP’s force you to create a part number - even for non-stock parts, custom estimates, or jobs and that may only be needed once. If part numbers are not required, (unless you stock the part), you will not clutter your inventory master with obsolete parts as soon as they are created. Also, most ERPs either allow for the backflushing of a material or not at all (at the item master level). Assure your ERP lets you decide at the work order transaction level, which items to backflush (at Standard Cost) and which to issue at Actual Cost.
Especially with ETO equipment manufacturers, some materials you will want to track the Actual Variances, whereas consumables in the same project/job, just simply backflush at Standard Cost.
Not every manufacturer is ISO certified or AS9100 certified, and receiving inspections might be enough QA for you. However, if you do need advanced QA features such as vendor performance, non-conformance & corrective actions, Gauge Calibration, Tool Management, SPC charting and Preventative Maintenance, which are integrated to Shop Scheduling. If required, are these capabilities integrated and built into the ERP, or will they be 3rd party bolt-ons?
When implementing a new ERP, many companies agree that current processes will need re-engineering. Without streamlining your strategic and tactical business processes, you may never achieve the ERP benefits you expect. How much value is a 3rd party Business Performance consultant, that has zero experience with your new ERP? Or would it make more sense to work with ERP Partners that also provide Business Improvement Strategies to ensure the maximum benefits from the ERP you are implementing? BPR may be a double-edged sword. Assure your implementation partner is more interested in maximizing your profitability vs. maximizing their own. Change Orders, whether necessary or not, are best discovered early. Implementation budget overruns of double or more occur with 40% of ERP implementations.
Crystal Reports & SSRS work well with any ERP, if you employ programmers. Does your ERP offer reporting tools that are as powerful but easier to use so anyone can create their own queries, custom reports and Dashboards? 30% of Infor’s customers do not employ a full-time IT person – whether deployed in the Cloud, On-Premises or a Hybrid.
Read Our Blog: Hybrid ERP Deployment and Solutions for Complex Manufacturers
Compare the minimum hardware requirements from each vendor (considering on-prem), and then re-confirm these minimums are acceptable when speaking to references. Do you need to buy a Cray Mainframe computer or hire more IT staff? Will you be forced to hire programmers to use these report writers, or even worse, require custom coding?
The sales demos might look cool, but how much coding did it require to create that cool stuff? Every ERP claim to be easy to use and implement. The only way to know for sure is to ask their customers how their actual experience was. And don’t just ask how easy it was, ask how fast do new employees pick it up?
How readily available is a list of Customer References provided? Take note how quickly each ERP vendor provides references? Are they local? Are they in a similar industry to your company? Are you welcome to visit or only a phone call? If the ERP vendor is not being forward with their customer lists, is it because they are protecting their customer’s privacy? Or is it because they have very few that are happy enough to take calls? Considering The Wall Street Journal stated that 73.8% of all companies are not happy with their current ERP, could it be the latter?
Infor CloudSuite Industrial and VISUAL ERP are both robust ERP systems for manufacturers. They are designed to streamline mixed-mode, engineer-to-order (ETO), make-to-order (MTO), assemble-to-order (ATO), custom and configure to order manufacturers utilizing manufacturing best practices refined over decades.
Read the 2023 Gartner® Critical Capabilities for Cloud ERP for Product-Centric Enterprises
Flexibility and Control of Complex Supply Chain Processes
Speed is always a competitive advantage. Manufacturers that introduce new products to market quicker will gain market share. In today's economy Manufacturers need to quickly create quotes, accurately submit bids, and launch new products just for survival let alone thrive. With Infor ERP, time to submit initial quotes are compressed, production volumes are increased, resulting in on time deliveries in the 95+ percentile.
A&D is one of the highly complex and regulated industry, which it needs a robust ERP software
Regulatory compliance, traceability, efficiency, cost control, and quality assurance demands
Do you have questions about ERP selection, ERP implementation, ERP trainings or any other issues with digital transformation? Talk with one of our advisor, we'd be glad to help you.
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