An ERP System can be a tremendous asset; it can also be a tremendous burden.

Published On: March 12th, 2015|Categories: Blog|

Being able to utilize an ERP system to facilitate managing your operations in a small manufacturing company, can be a huge cost advantage. That is until customization becomes burdensome cost wise and ends up being a drag on financial performance when you trying bending it to your will.

ERP systems are there to increase efficiencies and provide a standardized means of operating your company. There are several pitfalls to avoid and a frame of mind needs to be central to keeping the advantage an advantage.

First and foremost, the utilization of best business practices. ERP systems are designed to provide the general business systems that all companies require to do business. One of the common answers I have to give staff members that approach me about a process they want to implement, is to look at how ERP handles it. With 150 years of history in the industrial age, while technology evolves, the procedural aspects of the manufacturing business are essentially the same. Customers order products, we buy the raw materials, add labor, make product and ship it to the customer. If there is something you want to do, it is probably already addressed in ERP. When a company starts trying to customize ERP to resemble how THEY want do business, additional cost AND variables are entered into the equation. Quite often, these customizations continue to add more cost over time. Flexibility in process is fundamental to continuous improvement. It can also be a means for cost containment when trying to weigh best practices (standard ERP) vs “let’s change it to how we have always done things.”

Training, most ERP providers provide training materials, everything from manuals and classroom to online videos. They can be great training tools but when you customize the ERP package, you also create your own set of processes, which require a customized set of training tools. These too have to be maintained, by either internal staff or the ERP provider, over time and assessed for impact when processes are modified. It also negates the advantages of bringing in new staff with experience in your particular ERP, when you have deviated from the standard process to one of your own.

ERP is a great tool for manufacturers, especially small ones, as it makes us so much more efficient. When assessing applicability to your processes, rather than bringing the mountain to you, perhaps going to the mountain is a better option in the long run, both time wise and cost wise.


More articles about ERP:

ERP – It’s not just for the big boys!

Life with ERP is A-OK

Planning is but one piece of the puzzle: include ERP system assessment into your supplier evaluation.

How to turn the “What If” into a “For Sure.”

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