10 signs your need an ERP software system

Genius ERP: ready out-of-the-box for custom manufacturing.

Business is good, but it could be better. End-of-month financials come with certain surprises, and some work progresses more frustratingly than would be nice. There's unaccounted-for inventory, and far too many spreadsheet files. Still, solutions to these issues can be costly.

Small and midsized companies are right to ask whether they really need an extensive ERP system. The answer depends on what you are currently experiencing on your shop floor, and what are the next best purchases to make for the best returns.

Here are 10 signs that you might be ready for a complete ERP system.

1. Off-the-mark Product Costing

Given the complexities of manufacturing, knowing the actual cost of each product can be difficult. But the more you can track in your plant, the more you can understand true costs and estimate, quote and plan accordingly. By tracking the time spent on each job at each station as well as the material costs, a clear picture starts to develop over time, and this knowledge is accessible by your whole team. It is pretty hard to get the big picture on each project without a well-integrated ERP system.  

2. Non-integrated Systems Slowing Things Down

When systems don't communicate project information, humans are left with this heavy lifting. A lot of time and money gets sunk into managing multiple databases, and cross-checking information. Maybe you use a system of spreadsheets, some accounting software, and some notes that only you and your closest guys can decipher. This confines needed information, and governs production to the speed of one person.

A single integrated ERP solution won’t replace your expertise and know-how, but it will share it. And it will provide the team with one source of truth. It can increase employee productivity, create a consistent user experience, and break down silos around your departments by enabling true, real-time connectivity.

3. Inaccurate Inventory

Inaccurate inventory has nasty spillover effects; if you hold too much of everything, it will force you to use up storage space, will tie up cash flow, and long-held items might become damaged, forgotten or obsolete. On the other side, if you hold too little, missing inventory will halt production, force extra cost due to expedited shipping of missing parts and ultimately delay delivery.

If you struggle to accurately track inventory at multiple points, and this has become detrimental to the bottom line and customer satisfaction, then an ERP system can be highly beneficial, since it is an expansion of an MRP (Material Resource Planning) software. 

4. Constant Production Scheduling Problems

The connection between production scheduling and a manufacturer’s ability to make products profitably and on time is not tenuous. It's always connected, especially considering the rising costs of both staff and machinery. In short, you want to be getting the most bang for the buck on your shop floor, and not have misalignment on project routing and machine time allocation.

An ERP will provide crucial planning functions based on actual supply and demand data, as well as forecasts, to deliver accurate and timely production plans. And the main benefit will be the much-needed helping hand of data to direct scheduling in the right direction, instead of burdening key staff with the headaches and stress of scheduling.

5. Unhappy Customers

The expectations of a customer 20 years ago was very different than it is today. Customers are less forgiving, maybe it's because they have a lot of options for contracting or subcontracting. Or it's because they face pressure from the customers they have up the manufacturing chain to deliver on promises as well. An unhappy customer is less likely to turn to you again, and this lack of repeat work from your established relationships will mean that you always have to grind it out on sales.

An ERP system makes data available for both you and your customers. Being able to easily communicate progress and adjust on the fly is a relationship-builder, so being able to turn to a centralized ERP system for information instead of saying “let me get back to you” can be a huge plus, helping to lock down repeat business.

6. Communication Silos

Left unchecked, manufacturers will have silo’d departments across their operations, each with distinct systems and processes. Before you know it, the left hand doesn’t know what the right hand is doing. Because of this, the potential for errors is high during the transfer of data from one department to the next. A costly game of broken telephone follows.

An ERP system’s biggest benefit, both in terms of cost and headache-savings, is the centralization and accessibility to information and production communication. Furthermore, an ERP system will not only facilitate internal communication and workflow, it can directly connect a manufacturer with both suppliers and customers. A direct connection with suppliers streamlines inventory and enables just-in-time manufacturing. A direct connection with customers automates the sales order process and mitigates delivery penalties.

7. Growth in the Plans

In a nutshell, businesses prefer to implement an ERP system because they need improvement in internal business processes and overall business performance. They also want to reduce labor costs, IT expenses and improve interactions between staff and companies.

All this translates into a foundation for growth. An ERP organizes and optimizes production using existing resources, while providing the information framework for scaling. A modern ERP also shares not only information, but production knowledge across the workforce, meaning that anyone can jump in to drive production forward.

Businesses that have plans for continued growth and expanding operations will want to get their ducks in line early. This means scalability, and an eye toward the future—things an ERP can help with.

8. Manual Business Processes

This goes along with the idea of working in silos, or in other forms that are constrained and restrictive when it comes to moving things along smoothly. Your software should align with your business processes seamlessly. Excel has been amazing for companies large and small, but it is not a system to run your business. The right ERP will automated data captures, managing electronic orders and payments, and provide alert when needed—no manual ‘lifting’ required.

9. Difficulty Extracting Meaningful Data

If you don’t know where you’ve been (or where you are for that matter), how can you know where you’re going? If you can’t say with certainty and with one version of the truth as to how business has been going, then you might not have what constitutes meaningful data.

Modern ERPs for even small and midsized manufacturers are built to provide BI (business intelligence). This is not about garbage-in-garbage-out; this is about having KPIs that can be easily defined and tracked based on high-integrity data. Critical information should be in the hands of key decision makers, and on-demand if possible.

10. Maintaining & Reporting Proper Data to Regulatory Agencies

When put side-by-side, the words ‘manual reporting’ don’t get anyone excited. The tedious task of reporting to meet the standards and practices required of your products is three things: mind-numbing, time-consuming, and largely automatable.

Modern ERP solutions allow you to capture data accurately and then turn this into the standardized reports required by regulatory agencies governing your industry. It is one less thing that your people need to do, freeing up resources for other tasks that bring greater value. 

An ERP system is a foundation for growth as much as it is a pain reliever from the complexities of production.

Contact Us to Get Started

So whether you suffer in the pursuit of greater heights in manufacturing or from the level at which production is going right now, an ERP should be at least considered a possibility. And best thing: it doesn’t take too much time to investigate the possibility. One place to start would be a short call or demo with the Genius ERP team. We have a system we can say with full confidence is exactly what manufacturers need to address all the issues listed above.

Michael Connors

Michael writes on manufacturing, technology and current affairs for Genius Solutions in the role of content strategist. He studied journalism and worked in both news and PR before joining the company in 2017.

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