IQMS Blog for Manufacturing ERP Expertise

Comparing Apples to Apples in Manufacturing ERP Software

Posted by Glenn Nowak on Fri, Jun 18, 2010 @ 09:45 AM

Most companies today are looking for an industry specific ERP system that handles their requirements and meets more than just the basic ERP needs like inventory control, financial management, and sales and distribution. Many companies today want Quality, SPC, CRM, MES, Maintenance, Bar Code Scanning, EDI and more and realize the value of all of these components residing in one, nice package.

The ERP system vetting process used in most cases entails sending out long generic vendor questionnaires, selecting a few suppliers for short presentations, and scheduling day long, scripted demos.  At the end of the day all the systems begin to look the same. Not only that, but often the software sales people were convincing in the illusion that any system can handle all the customer's unique needs and any required third party interface to a another system would be invisible and seamless. So how has the research process changed and most importantly how do you make the right decision?

The first step in the process is to look at other companies in your industry.  Ask colleagues, trade organizations, social network sites, and yes, even competitors.  Find out what systems they are using. Ask them how they truly like the system.  Does it handle the specific process or industry needs?  How easy is it to use?  How long did it take to implement?  What is the software support like?  How are software changes handled?  Go back to that 5 year-old in us all and ask every question you can think of and then really listen to the answers.

The next step is to bring in some selected companies for a day of discovery and plant tour at your facility. This allows ERP vendors to see your unique needs. Show them your pain points and your detailed requirements. Let them ask questions on your processes and what is driving your search for an ERP system - whether it is your first one or your last one.  Make the suppliers fully aware of the specific topics they need to cover and gauge their confidence.  Be as specific as possible and ask for the same in return - don't be generic where specificity is best.

The detailed demos are the next step in the process. To best determine whether the vendor can meet your needs and requirements you should consider providing the vendor, in advance, with some of your data for utilization during this demo stage.  Have the supplier present your data and show in detail how they would handle your process, needs, and issues. If they have multiple systems that are required to be linked or interfaced together have them not only indicate those disparate systems but also walk you through the connectivity process and data sharing process.  Is it easy or cumbersome?  Is there a batch transfer or real-time data?  These factors will be extremely important when utilizing the system.

Once the top suppliers are selected it often comes down to evaluating the price. Some systems may seem less expensive on paper but they are often less expensive for a reason that you will pay for later. Make sure you are looking at all the hidden costs and comparing apples to apples not apples to oranges. This often works best by putting all the details side by side in a spreadsheet to make sure you aren't missing anything. One system might be less but support isn't included.  No one thinks they will need support, but inevitably everyone does.  Scalability might not be a factor now but what about in 3 -5 years?  The cost for having to buy another system is significantly more than that of being able to enhance the system you already bought.  By reviewing all these details as well as pros and cons, you can get the value of the system and not just the price.

So if you are at the beginning stages of an ERP selection, I encourage you to follow these steps in helping guide your search.  Being thorough, objective, and detailed will yield great results.  Because when you look at all the details is when you are most likely to know which is the best and most cost effective solution.

Tags: manufacturing ERP software, Inventory Control, ERP Selection, Financial Management