8 Questions Industrial Machinery Manufacturers Ask When Selecting an ERP System

What's more important than discovering the enterprise resource planning software that matches your business? Asking the right questions that lead you to that ERP system, of course.

We sat down with abas finance professional Brad Strathe and discussed what industrial machinery manufacturers should ask prospective ERP vendors as they search for the software that best fits their operations.

1. Will this ERP system work in a make-to-order environment?

Industrial machinery manufacturing is not an industry of mass production. Each order may be designed according to unique customer specifications. As such, these manufacturers require flexibility to adjust build configurations as needed and plan ahead for variance in demand.

Industrial machinery manufacturers require flexibility to adjust build configurations as needed and plan ahead for variance in demand.

“In a make-to-order environment, I need an ERP system that allows me to keep overhead costs low while giving me the visibility and ability to the manage the uneven demand that drives my business” said Brad.

2. Can it provide detailed or summarized cost estimates?

Large, complex builds could consist of several separate work orders or even separate sales orders and quotes. Compartmentalizing a project in this way allows manufacturers to achieve greater depth and granularity, but it can easily confuse matters when stakeholders attempt to estimate a project's total cost.

The right ERP system will draw from relevant data on labor, materials and ancillary services to create an accurate, timely snapshot of total costs. With that said, users will still want the ability to dig into the build requirements of specific segments of a project, so ERP software shouldn't sacrifice one type of visibility for the other.

3. Does it share and integrate data?

Communication with outside partners is integral to an efficient custom build. Customers and vendors contribute information as much as they expect information from the manufacturer in return. The best ERP systems honor and facilitate the give-and-take relationship of collaboration through customer and vendor portals.

"For example, rather than having a bunch of email chains, customers can log in to a customer portal according to permission levels I set and share drawings and other relevant information needed for achieving timely and cost-effective completion of their product" Brad said. "Manufacturers can in turn provide information on the status of their Customer’s order and estimated completion dates for specific line items."

If manufacturers source materials or receive third-party services, those vendors can use web-accessible vendor portals to respond to Requests for Proposal and discuss quotes. Data compiled in these portals then automatically feeds into integrated ERP systems for easy recordkeeping and utilization.

Proactive workforce management can save businesses some serious opex.

4. Can I schedule my workforce intelligently?

In an industry like industrial machinery manufacturing where demand ebbs and flows, proactive workforce management can save businesses some serious operating expenses, especially if those companies first achieve visibility into upcoming demand through an Opportunity/Quote Pipeline Infosystem integrated seamlessly into their ERP.

"Let's say I'm an industrial machine manufacturer with multiple customer jobs upcoming," said Brad, "and I need 80 hours of work this week but only 20 next week. I need an advanced planning and scheduling tool to forecast that demand, look out into the future and allow me to smooth out that scheduling."

5. Is this a global ERP system?

As manufacturing competition challenges manufacturers to extend their reach beyond their borders, nothing should stand in the way of globalized supply chains or valuable customer bases halfway around the world. That includes ERP systems.

Instead, ERP ought to assist manufacturers as they run multisite operations and develop frictionless processes that support robust international trade. On a basic level, users must be able to change the ERP interface to display in their preferred languages and account in local currencies not only internally but externally through customer or vendor portals.

Furthermore, no multisite ERP is complete without some form of cloud functionality, be it through a fully SaaS offering or as a hybrid cloud/native system. Click here to learn more about how cloud ERP keeps hub-and-spoke manufacturing operations connected.

6. Will it let me standardize processes?

Complex products demand lean manufacturing practices and quality control built into production, not to mention an ERP system underpinning these highly regulated operations.

Business Process Management, an essential ERP module for industrial machinery manufacturers, visualizes workflows and guides employees through standard work instructions and documenting step by step so no important detail gets missed. BPM should be detailed enough to help manufacturers adhere to ISO requirements but also intuitive enough to allow for simple procedural changes that support a continuous improvement mindset.

7. Will it integrate with CAD?

Manufacturing and design engineers love ERP software if it cooperates with CAD programs - and frankly, ERP software developers love it, too. Why? Because when ERP and CAD speak the same language, people spend less time plugging data into spreadsheets and fussing over unaccounted build materials. More importantly, sales orders move from planning to the manufacturing floor a lot faster with a smooth CAD integration.

"In a make-to-order environment, you're usually doing unique drawings for each customer sales order," said Brad. "The ability to interface those CAD drawings directly into the ERP system is a big timesaver and virtually eliminates data entry errors."

Does your facility rely on SolidWorks, Autodesk Inventor or any other CAD suite? Then don't take a step back by investing in ERP that can't play nice.

8. Will it empower my service and repair teams?

Manufacturers invest significant capital into their equipment, but many forget to devote equal measure to the management of service to their customer over the product life cycle. An ERP system equipped with a robust service/repair module can act as a centralized hub for tracking warranties while scheduling and facilitating maintenance calls. And with mobile app ERP functionality, users can leverage the software as an on-the-go service processing tool that travels with them wherever mechanical servicing takes place.

The answers to these eight questions will clue manufacturers into the ERP system that's best for their operations. For additional information and answers to other questions, visit our FAQ page or speak to an abas representative today.