Choosing Manufacturing Software

In a world where consumers demand better quality products at lower prices, manufacturers turn to technology software solutions to eliminate redundant, inaccurate, time-consuming or non-value added processes to meet buyers' purchase requirements - and still make a profit.

Savvy manufacturers have created bridges to their once-disparate islands of information. These businesses are uniting critical data about all aspects of their operations using both manufacturing systems and broader enterprise resource planning (ERP) applications in order to stop over-ordering parts, achieve just in time stock replenishment, reduce expensive over-time payments and focus limited resources on the most popular, best-selling products.

Whether you're making jewelry boxes or cardboard containers, computer CPUs or automobile engines, you need an manufacturing software that centrally stores and manages corporate information, knowledge and data. And so, no matter the widgets manufactured in your plants or factories, selecting a manufacturing software solution demands careful planning in order to ensure success. Just as your product engineers discuss and test new product launches, checking them out with focus groups and rigorous testing, selecting the manufacturing system to power-up operations also requires careful consideration, short- and long-term planning, and corporate buy-in.

After all, both manufacturing systems and enterprise resource planning systems tie together information from throughout your operation: These business systems incorporate data from inventory, production management, sales management, quality control, engineering, document imaging, email and other applications to create a real-time, full-scale picture of your company's operations – now and over forecasted horizons. This visibility empowers management to quickly make critical decisions, cutting time to market, achieving productivity and maximizing margins and profitability.

By the Numbers

Manufacturers with revenue of less than $50 million have, on average, 38 ERP software users, according to Aberdeen Research. In a research survey, smaller manufacturers saw a fast return on their ERP and manufacturing software dollars, with all reporting business software completion within two years, the research firm found. In fact, 86% completed their enterprise software implementation within 12 months, Aberdeen reported.

Not surprisingly, larger manufacturers took longer, with only 47% of manufacturers with $1 billion-plus in revenue reporting completion within the first year, the researcher said.

Manufacturing Software Planning

Because a successful manufacturing software implementation is so all-encompassing it is vital that you engage all affected departments and stakeholders. A leadership committee should include a C-level executive to guide the project through funding and approval, as well as commit key resources from IT, manufacturing, accounting, engineering, sales and other internal groups. If a department's data will be incorporated into the ERP or manufacturing solution, the selection committee should incorporate its input into the process. But don't create a huge committee, or you'll never get past the planning stage.

It is then time to create a needs analysis: What business problems do you have now, and what do you want the new application software to accomplish? Goals may include reducing cycle times, cutting time-to-market, shrinking excess inventory and integrating sales forecasts with production planning. Also consider where data currently is stored, and the software your manufacturing or ERP solution must integrate with, be it third-party systems, custom programs legacy applications or vendor systems. After all, you don't want to change all your ancillary software, just your production solution.

Consider following the best practice of reviewing and revising your existing processes and procedures during your manufacturing software selection project. Implementing a business system is a logical time to address existing bottlenecks or problematic areas with business process improvement initiatives. Don’t rely on software technology to resolve issues that should instead be resolved with process changes.

Figure out your budget early in the process - for the application software itself, as well as additional expenses for hardware, training, network enhancements, system integration, software customization, support and internal IT administration. As a general rule of thumb, the software will represent about 20% to 25% of the total cost of ownership. Software as a service (SaaS) solutions may eliminate the capital expenditure for hardware and software, and also reduce the IT administration, however, you’ll want to perform a SaaS versus on-premise cost analysis over about a five year horizon to make sure the cloud makes financial sense. And, of course, decide upon how you'll measure ROI. Too many business software selection projects establish vague and ambiguous objectives which cannot possibly be measured.

Enterprise Software Choices

It's now time to get into the nitty-gritty of your enterprise software project: Picking the actual application software you'll use. You'll be able to eliminate some applications because of cost. Others may not integrate well with your legacy systems or operate within the technology framework selected by your IT department. Speak to peers at other organizations, asking hard questions about the success - or lack of - with their manufacturing software. Research software vendors online, especially at third-party, unaffiliated sites such as trade magazines, analyst firms and social networks. Some manufacturing systems have regional user groups and online forums, and these can be a great resource for candid feedback from multiple people within varying sized companies and vertical markets.

From the prior cost analysis, you may learn that cloud manufacturing software can open the doors to an otherwise more expensive application without the high cost of entry or related hardware. With on-premise software, you purchase the application license, along with all the necessary hardware, networking and resources to implement, support and train users. With cloud manufacturing software, you own the data, but lease the application from a third-party, who in turn is responsible for the servers, networking, storage, information security, disaster recovery and expertise required to keep it functioning at full-strength. In a cloud or hosted environment, you pay a monthly fee with no unexpected expenses or maintenance headaches. Just make sure you check-out a hosted service provider fully to ensure they have a stellar reputation, a strong Service Level Agreement (SLA) and a history of predictable uptime and satisfied customers.

No matter whether you choose an on-premise or cloud solution, you must then test your potential partners' capabilities through live demonstrations, preferably modeling your company's more difficult business processes. When vendors showcase their solutions, ask company-specific information to determine whether a solution meets your specific needs. Integration with existing applications, future software development plans and support also are important areas to discuss. How will a software vendor support you as you grow or expand into other geographies? How do they incorporate client feedback into their software development? Speak to their customers. If you can, visit other non-competing manufacturers - competitors won't want to share this information - to actually see their manufacturing system in-use.

Call to Action

Decision made, it's time to create an action plan for your production system roll-out. This software implementation plan should include a realistic time-line of key tasks with resource allocations, dependencies and due dates at the minimum. You'll need to start small, unveiling the manufacturing system or enterprise resource planning solution department-by-department to work out any kinks or integration issues before you go company-wide. You will probably need to convert data and create new reports so management can access this newly-available wealth of information.

Be sure to allot adequate time for data conversion and user training. Data conversions seldom go as planned – normally because the source data is dirty and requires laborious cleaning before the transfer. Few manufacturers actually recognize how poor their data quality is before they go to convert it to a new system.

Manufacturing software user training normally consists of progressive phases: from train the trainer to classroom training to one on one support. Enterprise software training is notoriously under-estimated and done on the cheap. If end-users are not fully trained, you will not see the desired results. In addition to doing your user training right, ensure your IT staff know the system inside out and upside down, and that they know who to contact in case of emergency. After all, depending on your organization, your ERP or manufacturing system could be used 24/7, 365 days a year.

Finally, evaluate the software and the processes. What worked? What didn't? How would you do this differently and what would you duplicate? Application software, after all, is evolving, constantly changing, and you will need to revisit your applications again periodically. Match the software solution's performance against anticipated ROI: Hopefully, the figures match - or even exceed - your predictions. If not, begin planning the next phase. Manufacturing software is a journey, not a destination.

While it may not directly help you manufacture the next best gizmo, the right enterprise software solution enables your company to use its available resources wisely, eliminating spending on unnecessary inventory or materials, cutting time-to-market, and giving you a critical edge in an extremely competitive, margin-hungry business.