We sat down with Finance professional Brad Strathe to discuss what industrial machinery manufacturers should ask potential ERP vendors when looking for the best software for their operations.
1. Does this ERP system work in a build-to-order environment?
Industrial machinery manufacturing is not a mass-production industry. Each order can be designed according to unique customer specifications. As a result, these manufacturers need the flexibility to adjust build configurations as needed and plan for changes in demand.
Industrial machinery manufacturers need the flexibility to adjust build configurations as needed and plan for changes in demand.
Brad says, "In a made-to-order environment, I needed an ERP system that allowed me to keep overhead costs low while allowing me to manage the uneven demands that drive my business." .
2. Does it provide a detailed or aggregated cost estimate?
Large, complex builds may include several separate work orders, or even separate sales orders and quotes. Dividing the project in this way allows the manufacturer to gain greater depth and granularity, but it can easily confuse the issue when stakeholders are trying to estimate the total cost of the project.
The right ERP system will leverage data about labor, materials, and ancillary services to create an accurate, timely snapshot of total costs. That being said, users still want to be able to gain insight into the build requirements for specific parts of a project, so ERP software shouldn't sacrifice one type of visibility for another.
3. Does it share and integrate data?
Communication with external partners is an integral part of an efficient custom build. Customers and suppliers provide as much information as they expect from manufacturers. The best ERP systems respect and promote give-and-take relationships that work through customer and supplier portals.
"For example, instead of having a bunch of email chains, a customer can log into a customer portal based on the permission level I set up to share drawings and other relevant information for a timely, cost-efficient completion of a product," Brad says. "The manufacturer can, in turn, provide information about the status of a customer's order, as well as an estimated completion date for a particular line item."
If manufacturers procure materials or accept third-party services, these suppliers may use web-accessible supplier portals to respond to bid requests and discuss offers. The data compiled in these portals is then automatically entered into an integrated ERP system for easy recording and utilization.
Active workforce management can save businesses some considerable operating costs.
4. Can I manage my staff wisely?
In an industry where demand ebbs and flows like industrial machinery manufacturing, proactive workforce management can save businesses some serious operating expenses, especially if these companies first understand upcoming demand through an opportunity/offer pipeline information system seamlessly integrated into their ERP.
Brad says, "Let's say I'm an industrial machine manufacturer with multiple customers coming to work, and I need 80 hours of work this week, but only 20 hours next week. I needed an advanced planning and scheduling tool to anticipate demand and look ahead, allowing me to schedule smoothly."