Finding the right ERP software for your small manufacturing business is crucial to your efficiency and success for a number of reasons. The right ERP system can help transform supply chains by providing visibility, automation, and control like never before, and can help rapidly scale your brand and optimize current systems without a huge spend. Almost every aspect of small manufacturing business can benefit from enterprise resource planning (ERP) software, which streamlines many facets of your company within a single program, including:
- Inventory and materials management
- Manufacturing and warehouse management
- Centralized data collection and analytics
- Accounting, finances, taxes, and reporting
- Production management and scheduling
- Sales, marketing, and operations
ERP systems can work wonders, but many small businesses tend to dread the idea of scouting and implementing new technology. With so many diverse and complex manufacturing-specific platforms, which one ERP system is best for your small business? In this guide, we’ll help you understand a few core considerations of choosing a new ERP software, with advice tailored specifically to small businesses across multiple manufacturing industries.
Top 5 Reasons to Upgrade to ERP Software
Before we get into the details, let’s cover a little bit about the benefits of good manufacturing software. Of course, the primary reason for switching to one of the top ERP systems is financial management. Indeed, the right system will provide you with measurable cost-saving capabilities while simultaneously helping to optimize your business processes, making them more efficient and economical than ever. But there’s much more to the story. Here are some compelling reasons to upgrade to ERP software:
ERP Provides Real-Time Data
Analytics are vital to any industry that wishes to adapt to the ever-changing needs of the consumer and the industry. One of the best parts about a good ERP is that it tracks data across many departments that you probably currently treat as separate entities, providing you with in-depth analytics so that you can tweak as needed to get the best possible results. This also helps you see how different functions affect one another.
ERP Enhances Customer Service
One of the things that many small businesses notice right away when starting out with an ERP is accuracy. With detailed visibility of inventory, materials, progress, scheduling, and shipping, there’s a much lower risk of error and disgruntled customers. Did you know that the vast majority of consumers (that is, 88 percent, according to a recent study) expect the ability to track their shipments? The right ERP software can provide you with accurate, automated order tracking for a happier consumer base, not to mention accurate inventory updates.
ERP Reduces Costs
All of these benefits work together towards one main goal — cost savings. A well-chosen ERP can save you money by reducing error, keeping customers happy, preventing inventory surplus or deficit, tracking expenses and write-offs, and reducing operational costs by automating and monitoring all of your company’s finances. Of course, a system that saves you and your employees time will also save you big bucks by allowing you to allocate labor elsewhere.
ERP Helps Grow Your Business
At the end of the day, growing companies need more of everything, including labor, warehouse space, time, and marketing. Most manufacturing software solutions work hard to optimize what you’ve already got and make space for more. For example, the right ERP could help you take advantage of your warehouse space so that you can store more goods without having to extend your facility’s footprint or invest in more storage. In short, they’re all designed for scaling businesses.
ERP Streamlines and Simplifies
Offering a real-time view of all your main processes under a single system, an ERP platform streamlines and simplifies many of your company’s operations. For many businesses, this means downsizing from various software solutions to a single one that puts all your primary functions under one umbrella. It also creates a central, company-wide hub that requires only a single software training for all departments.
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Consideration No. 1: Your Current Process
Ask yourself: How Am I Currently Managing My Business?
Did you know that over 70% of small manufacturers plan to make technological investments in 2022 to improve business processes and efficiencies? Many seeking to implement a new ERP system are doing so to replace their own homegrown systems. If you’re looking for a more advanced, tailorable solution that goes beyond QuickBooks, Excel, and other programs that you’ve grown out of, now is the time to implement ERP software. The good news is that most of these ERP products are set up to help you transition from more basic and limited solutions to full-featured ERPs, so your current system will help you decide which software is best.
For example, if you’re switching from QuickBooks to ERP, you’ll want to select software that’s compatible with QuickBooks, so you don’t have to spend a ton of time rebuilding databases from scratch. Note that various systems make switching from Excel to ERP a breeze. If you want to maintain any current databases or historical data, make sure that you choose an option designed to make the transition as simple as possible, specifically for Excel users.
Consideration No. 2: Your Specific Production Process
Ask yourself: What is My Manufacturing Mode?
To narrow down your selection even further, it helps to select your software by the manufacturing process. There are ERP solutions that are engineered specifically for precise manufacturing modes, such as discrete, process, and mixed-mode manufacturing, as well as a light assembly (kitting), professional services, engineering to order (ETO), make to order (MTO), repetitive (make to stock), job shop (shop floor) and industrial or wholesale distribution.
While choosing software that is not mode-specific may work just fine, depending on your specific business and industry, it does help if you have unique tools that support your manufacturing mode. For example, if your company practices process manufacturing, your ERP will have additional management functions that help you plan, sort, and produce processed goods, with additional solutions to simplify process-specific functions, like safety laws and regulations.
In addition to manufacturing mode, ERP systems are also categorized by the industry in which they serve
Consideration No. 3: Your Industry
Ask yourself: What Are the Specific Considerations of My Industry?
In addition to manufacturing mode, ERP systems are also categorized by the industry in which they serve. Again, this can help simplify certain company-specific considerations — for many businesses, the primary considerations here are industry regulations, security needs, and safety laws — to help ensure that every industry challenge is taken into account with your software selection. For example, if you are a producer of food and beverage products, you’ll have to consider many things that may not affect businesses in other industries, such as FDA compliance and inventory storage.
While just about every industry should consider selecting software that has been developed specifically for their realm, it’s more important for some than others. Those in aerospace and defense, agriculture, automotive, chemicals, food and beverage, consumer packaged goods, energy, health and medical devices, petroleum and coal, industrial machinery, transportation, pharmaceuticals, and biotech should take special consideration in choosing industry-centric ERPs to ensure compliance and safety across all processes.
Consideration No. 4: Costs
Finally, you need to determine a budget for your ERP. This sounds simple enough, but costs can be somewhat deceptive in any major software integration. What you really should be considering is the ROI of your ERP. The up-front cost of manufacturing software implementation varies widely, from $4,000 to over $1 million, but this isn’t the cost you should be concerned with. Instead, you should think about the up-front spend minus your potential returns to determine the ROI of the transition.
One of the big things small businesses need to consider cost-wise is licensing. There are two primary types of license fees when it comes to ERPs — on-premise ERP (typically paid with a large, one-time licensing fee) or cloud-based/SaaS ERPs (typically paid for on a per-user, per-month basis). Because they’re paid per user, cloud-based ERPs are often a smarter, more cost-effective solution for companies that have fewer employees or who only need to give out licenses to a small group of workers. Both options should accommodate for scale, should your business need room to grow.
Top 6 ERP Systems for Small Manufacturers and Businesses
As you can see, selecting the right ERP is really a business-by-business decision, and there is no one size fits all approach to manufacturing software. With that said, the following six ERPs are some of our most popular and flexible options for small businesses, and they are all worth your consideration. Note that all of these ERPs can be licensed either on-premise or on the cloud, but we are showcasing them as cloud-based (SaaS) systems, as this is typically the best option for smaller businesses.
- NetSuite — The NetSuite ERP is the most common cloud-based ERP, utilized by over 40,000 organizations worldwide. It includes financial management, inventory, supply chain and warehouse management solutions. When it’s licensed as a cloud-based software, it’s always up to date and offers affordable, subscription-based financing.
- E2 Shop System — Shoptech ERP can be cloud-based and offers flexible financing and leasing options for up to 300 users. It offers solutions for all facets of manufacturing, including shipping, data collection, estimating, scheduling, purchasing and accounting, but it’s perhaps best-known for its Shop Floor Control. Developed by two manufactureres forty years ago, E2 is uniquely designed to helped the growth and challenges of small manufacturers
- Cetec — This affordable ERP offers world-class manufacturing management at an amazing price tag (just $40 per user per month when licensed as a SaaS). Some highlights of the cloud-based Cetec ERP are CRM and sales management, manufacturing quoting, inventory management, mobile warehousing, quality assurance and more.
- Sage 100 and 300 — Sage offers cloud-based enterprise management software with integrated solutions for sales, finances, customer service, manufacturing, inventory and distribution, among other features. The 100 and 300 products are both ideal and affordable for small- to medium-sized companies.
- Epicor Kinetic — Epicor has been in the business of serving manufacturers for over 40 years, and has developed a flexible ERP that suits a wide range manufacturing types, including discrete, MTO, ETO, mixed mode and more. It’s an especially good choice for companies in highly specialized industries, such as aerospace, defense and medical devices.
- Global Shop Solutions — This fully integrated manufacturing software is the largest fully family-owned ERP company in the world, so it’s particularly well-suited to serving small businesses. Whether cloud-based or on-premise, it can be financed or leased with flexibility to suit your budget.
- Acumatica — Acumatica is the fastest growing ERP provider for good reason. With 3 full service products for Distribution, Services and Manufacturing, almost every small business can find Acumatica a great fit for their needs to both grow and scale.
Using Top10ERP to Find the Right Software
We hope that after giving all of these considerations some thought, you’ll be nearer to making a decision on which ERP to choose. With that said, we know that this guide isn’t all-encompassing, so we offer an assortment of tools that make the selection process a breeze. We invite you to use our Best Fit Comparison Tool to be paired with the top software based on a certain set of criteria. At Top 10 ERP, we’re also more than happy to help you with selection process by offering free demos.
If you still aren’t sure which option is the most tailored to your individual business goals and processes, we’re happy to speak with you one-on-one and provide expert advice. Customized product recommendations are our specialty and we’d be delighted to help you create a bespoke ERP shortlist for your review. Simply supply us with a brief company outline and we’ll send you your handpicked recommendations within a single business day.