When we think of manufacturing, we may imagine big factories, assembly lines or fast-moving, automated processes. This is the world of big company manufacturing, however. Not all manufacturers are like that. Small-to-midsized (SMB) firms are often engaged in more flexible, custom manufacturing. This creates a different set of needs for manufacturing management software, prompting the question, “What is the best software for SMB manufacturers?” Acumatica, which offers specialized Enterprise Resource Management (ERP) software for manufacturers, has published a useful whitepaper on this topic. We will explore the subject here.
First, What Kind of Manufacturer Are You?
There is no “best” manufacturing software for two reasons. For one thing, manufacturing software is always adapted for your unique business. It’s better to talk about manufacturing software suites that can be customized for your needs. Also, manufacturers vary significantly in the kind of operations they run.
Figure 1 – Different kinds of manufacturers, as categorized by their relative levels of variety and volume – which also correlate to speed and flexibility
The best manufacturing software for SMBs will vary according to a company’s manufacturing operation. The chart shown in Figure 1, which is taken from the Association for Supply Chain Management (www.ascm.org), offers a great way to categorize different kinds of manufacturing business. It plots manufacturers according to the relative levels of variety and volume, which also correlate to speed and flexibility.
A project shop is one with low volume and speed but a high degree of variety and flexibility. A company that makes custom equipment falls into this category. A job shop moves a little faster, but has less variety. Job shops usually sets of similar products, known as “jobs” for individual clients. A batch operations business is sort of like a job shop, but it has less variety and flexibility, but higher volumes and faster speeds. A mass, or continuous manufacturing operation is high speed and high volume, but with low variety, e.g. makers of soda cans or mass-production auto parts.
Matching Software with Manufacturing Category
In our experience working with manufacturers, software selection and configuration flows from a detailed, nuanced analysis of the company’s operations. In this context, operations span the full gamut of the business, not just the shop floor. The analysis should include a close look at the sales process and how the company supports customers after orders have been placed. All of these have a bearing on how manufacturing software is set up. And, the end results will vary based on the type of manufacturing that’s being done:
- A project shop will likely need manufacturing software that’s configured for in-depth project management and project accounting capabilities. This may mean integrating software modules for manufacturing management, supply chain and project accounting. A software suite that doesn’t offer this should not be considered for a project shop. Depending on the complexity of the project, the software may need sophisticated supplier management and scheduling, e.g. if components are expensive and manufactured abroad.
- A job shop needs similar functionality to a project shop, but, in our experience, usually also requires more customer relationship management and logistics features. Delivery of finished jobs may be time sensitive, split into multiple sub-orders and so forth.
- A batch operations business tends to need strong supply chain management capabilities. They’re moving quickly and cannot afford to run out of manufacturing inputs, nor do they want to hold inventory longer than they need to.
- A mass, or continuous manufacturing operation needs good supply chain management and logistics support in its manufacturing software. These companies also may need effective financial management, particularly if they’re running at lower margins. They’re often managing money as much as they are inputs and end products.
DOWNLOAD THE FULL GUIDE.
Getting Manufacturing Software right for the SMB
The challenge with getting manufacturing software right for an SMB is to provide the feature depth they need without overwhelming them with the complexity of an enterprise ERP system. After all, a large manufacturing enterprise might have more IT admins on staff than an SMB has employees. The SMB manufacturing software package has to be scoped right for the customer in question.
Acumatica Cloud ERP is a good option for SMB manufacturers in most cases. It can adapt to the needs of the four kinds of manufacturers. It’s also flexible enough to meet the specific requirements of a given firm—while offering ease of implementation and management that suits the operations of a smaller firm. To learn more about how we can help you with SMB manufacturing software, contact us today.
Additional Manufacturing Resources
5 Things Manufacturers Need in ERP
The Advantage of True Cloud Manufacturing
Manufacturing Challenges—How Acumatica Can Help
Process management, inventory management and accounting are just a few important features of manufacturing ERP software. By implementing a manufacturing-specific Enterprise Resource Planning (ERP) system, you can streamline business processes while more accurately generating prices and calculating total costs. Acumatica Manufacturing Edition has what manufacturing companies need to operate efficiently. However, for an ERP system to work in manufacturing, it must have these five things:
1. A Way to End to Blind Scheduling
Blind scheduling, i.e. scheduling without reference to actual orders, can lead to excess inventory and inefficiencies in plant operations. To foster efficient planning, ERP software must use real customer orders and demand forecasts to plan purchases and create realistic production schedules. A manufacturer can then assure all materials, products and parts are available when needed, in the right quantities. Coordinating activities, completing work on time and using resources more efficiently can avoid this even as demand changes or unexpected disruptions occur.
2. Ability to Reduce Expediting
In the manufacturing sector, expediting is the least efficient way to run an operation. Costs quickly go out of control as companies pay premium prices for materials to accommodate favored jobs. Acumatica Advanced Manufacturing Edition integrates costing functions in all operational subsystems. An ERP system must also collect/manage cost data for materials, labor and overhead in a production environment, while offering traceability of items, barcode data collection and tracking of labor.
3. Ability to Control Engineering Changes
The demand for product complexity and variety has increased. Therefore, an ERP system must account for complex product designs in multi-level bills of material (BOMs). Detailed routing and support for multiple product revisions are needed to track anything being designed, assembled or fabricated. A revision control system improves coordination, record keeping and tracking of pending changes. With visibility into complete, accurate data, companies can better manage material procurement, production scheduling and field service in the face of engineering changes.
4. Elimination of Outdated Business Information
Manufacturers need the most current information to improve decision making. The visibility provided by ERP software supports the manufacturing of complex, customized products; adoption of new manufacturing methods and technologies; and balancing of supply with demand. Acumatica integrates information across applications while updating data immediately system-wide, via the cloud, and ensuring the required data are always available. It also has dashboards for reporting and viewing key metrics, which provides accurate decision support and insights into trends.
5. Ability to Grow with the Business
Scalability means the same dependable, feature-rich platform is available as a business expands. For example, a scalable ERP system can support your business if it expands globally (i.e. contains tax and regulatory compliance and language translation functions). It should also support significant changes in transactional volume and contain software modules that allow an expansion of services. Otherwise, an entirely different software package may eventually be needed, which can cause problems ranging from data compatibility to learning curves.
Acumatica cloud manufacturing ERP software has everything manufacturers need for production planning, cost management, engineering change control, data tracking and scalability. Learn more by browsing our website or by leaving a message with us today.
Additional Manufacturing ERP Resources
The Advantage of True Cloud Manufacturing
Technology for the Mid-Sized Manufacturer
If you manage manufacturing operations, you know the kind of pressure you can be under to produce product on time and at the right cost. Enterprise Resource Planning (ERP) software has helped guide the manufacturing process as well as related areas of work like supply chain management and Materials Resource Planning (MRP) for a generation.
Today, however, the manufacturing sector is at a moment of change. On one level, time and cost pressures have grown more intense. At the same time, technology innovations like cloud-based software promise greater control over the process. Not all cloud software is the same, however. There is an advantage to using true cloud software in manufacturing. This is the subject of Acumatica’s useful white paper, True Cloud vs. Fake Cloud: How Manufacturing Companies Can Tell the Difference.
The Potential for Cloud Software in Manufacturing
Cloud-based ERP is a good fit with manufacturing for a variety of reasons. It tends to be more flexible than legacy ERP, which is helpful given how rapidly manufacturing circumstances change today. Manufacturing ERP software needs to keep up with rapid change cycles affecting product design, suppliers, logistics and so forth. The cloud is well-suited to this role.
Specifically, in addition to performing basic functions like accounting and financial management and procurement, ERP for manufacturing has to contend with many challenges. For instance, manufacturing management software has to integrate broadly with suppliers’ and customers’ systems, with logistics providers and more. An effective cloud ERP system for manufacturing can serve as the hub for all your business applications. It can connect your software, data services and equipment. Outcomes of this approach include:
- Streamlined order processing across multiple channels
- Ability to view material requirements and create schedules and work orders to meet demand
- Digital document signing and document management
- Automated warehousing
- Support for multi-carrier shipping with automated shipping rules
- Automated transportation management
- Efficient management of human capital and payroll
Looking ahead, cloud ERP for manufacturing can make it easier to adopt future technologies than its on-premises legacy counterpart. New technologies, such as the Internet of Things (IoT) promise to affect manufacturing. Security and compliance issues will continue to be significant. Similarly, data analytics as a component of manufacturing operations management will likely grow more sophisticated as time goes on. A good cloud ERP platform keeps you ready to deal with what’s coming.
Understanding True Cloud in the Manufacturing Setting
There are differences between the various cloud ERP offerings. Not all of them are what we call “true cloud.” Indeed, some cloud ERP solutions are actually just cloud-hosted versions of their original legacy instantiation. This leads to some fairly serious differences in functionality and the ability to deliver on the promise of the cloud for manufacturing.
A true cloud ERP solution is one that was developed natively for the cloud. It’s designed to leverage many of the cloud’s built-in advantages. For example, a true cloud solution will offer full functionality and reporting on common mobile devices as well as on the desktop. It will enable extensive customization, such as with dashboards and reports. A true cloud ERP solution features full integration of spreadsheets, apps, equipment and data services. It will feature robust security, but do so in ways that do not limit extensibility or integration. True cloud is also easy to upgrade.
Is true cloud ERP software the right solution for your manufacturing business? We can help you answer that question.
Microsoft Dynamics 365 Business Central offers a full set of business management capabilities. These include a wide range of features for manufacturing management. Manufacturers are increasingly finding the Dynamics cloud ERP solution to be an effective way to operate a manufacturing business while cutting the costs of running ERP on-premises.
Manufacturing Management at the Sales Stage
Some of the most important work in managing a manufacturing operation occurs before any actual manufacturing takes place. Accurate sales forecasting leads to effective capacity planning, staffing, inventory ordering and more. Dynamics 365 Business Central’s Demand Forecasting allows manufacturing managers to predict manufacturing volumes based on sales forecasts from sales management functions in the broader system.
A Sales and Inventory Forecast extension offers insights into potential sales as well as expectations of stock-outs. The toolset can look at historical sales data to offer stock recommendations and suggestions for replenishment. These features connect directly to purchase order generation and materials requirement planning in the solution.
The Bill of Materials and Production Orders
Dynamics 365 Business Central offers extensive features for creating a Production Bill of Materials (BOM). The BOM lists all the materials and other inputs needed to manufacture a product. The tool also provides for version management. This is useful because manufacturers often have multiple versions of BOMs in use. Managers can use the tool to generate Production Orders. These include instructions for manufacturing a particular order or batch. An Order Planning window gives managers visibility and the tools they need to plan for demand from sales forecasts.
The term “agile manufacturing” refers to tools, processes and training that enable a manufacturing organization to respond rapidly to market shifts and customer needs—while still maintaining quality and controlling costs. This is largely a matter of software. Dynamics 365 includes an Agile Manufacturing module that enables agile manufacturing by means of dynamic supply and capacity planning.
Supply planning makes it possible to map out requirements for materials based on demand, working in tandem with master production scheduling. Dynamics allows for automatic production order and purchase order creation as well as messaging and other tools for balancing supply and demand. This includes reordering processes for internal and third-party materials orders.
Capacity planning and finite loading round out the agile manufacturing capabilities of Dynamics 365 Business Central. Manufacturing managers can use the software to add work centers to the manufacturing operation. This feature also includes setting up routing for production orders and material requirements planning (MRP). The application provides visualizations of loads the tasks. Finite loading involves tracking capacity constraints on work centers to avoid overloading capacity.
A Machine Center is a locus of manufacturing operations built around related pieces of equipment. Dynamics 365 enables managers to establish machine centers as part of the manufacturing capacity planning and production management processes. The tool lets managers see the functioning of machine centers at the individual level and with a consolidated view. With machine centers, it is possible to monitor manufacturing activity, collect information on productivity as well as scrap percentages, and so forth.
Manufacturing management can be challenging, especially as product development and marketing cycles accelerate. The right manufacturing management software can make a difference in terms of productivity and profitability of a manufacturing operation. Microsoft Dynamics 365 Business Central offers a comprehensive feature set for effective manufacturing management. For businesses exploring the potential of technology to improve manufacturing management, this software is worthy of strong consideration.
Additional Business Central Resources
Microsoft Dynamics Business Central Features
Dynamics 365 Business Central: Premium Vs. Essentials
Improving Your Business with Dynamics 365 Business Central
Manufacturing has never been easy, but it’s getting harder to do profitably with every passing year. Competition never lets us. Supply chains get more complex. Deadlines and customer demands grow more urgent. How can you stay ahead? A manufacturing-centric Enterprise Resource Planning (ERP) solution can help. Acumatica, which has specialized manufacturing capabilities, demonstrates the power of software to keep manufacturing operations profitable and competitive.
Manufacturing Challenges Today
Time was, captains of industry would say that all it took to succeed was to “build a better mousetrap.” Those were the days. Currently, to win in manufacturing, you have to build a better mousetrap out of parts built all over the world—shipped to your plant on a “just in time” basis. Your customers expect a huge variety of mousetraps at the lowest possible price, available on the fastest possible delivery schedules.
How Acumatica Addresses Today’s Manufacturing Challenges
Acumatica Manufacturing Edition offers a solution. It’s a complete, multi-site cloud manufacturing control and planning system. It works in scenarios that span job shops, batch manufacturing, make-to-order and make-to-stock. It can be used for engineer-to-order and project-centric production as well. The solution integrates production planning and shop floor with customer management. In addition, Acumatica connects sales orders, purchasing, inventory, accounting and financial reporting. All up, it delivers real-time coordination of manufacturing as it relates to activities across the entire basis.
- Meeting schedules—Respond to demand while you optimize inventory and resources
- Committing to delivery—Commit to customer deliver requirements with a Capable-to-Promise (CTP) function, based on known capacity and materials
- Tracking costs—Stay on top of labor and material costs while managing products, then compare planned vs. actual costs
- Managing inventory—Know where your inventory is at any time, gaining real-time access to available inventory, inventory in transit and reorder quantities. This enables efficient distribution management, increased profitability and improved customer experience.
- Handling Bills of Materials (BOMs) and routing—Plan and manage inventories, costs, and manufacturing processes, retaining full control over revisions. Acumatica lets you see financial and engineering views of a product in a multi-level BOM structure.
- Overseeing production—Schedule shop floor production while track material and labor costs, including comparisons between planned vs. actual costs
- Conduct Material Requirements Planning (MRP)—Address requirements from customers while optimizing inventory levels
- Configuring products—stay on top of real-time price and cost rollups with a product configurator that enables multi-level, dimensional, rules-based configurations
- Estimating production costs—Estimate costs for both new or existing products, easily converting estimates into BOMs or production orders
- Managing orders—Stay on top of sales activities, streamlining procurement and automating order fulfillment in the process
- Planning and scheduling—Meet customer demands through accurate and reliable delivery dates based on resource and production capacity availability
- Managing warehouses— Streamline distribution process with Acumatica’s Warehouse Management System (WMS)
Implementing ERP for manufacturing can be a challenging process. Getting it right has as much (or more) to do with understanding the alignment between business and manufacturing as it does with software and IT. It all has to work together, however. This is something we are good at. If you are interested in learning how Acumatica Manufacturing Edition can help your business, let’s talk.
Additional Acumatica Resources
Technology for the Mid-Sized Manufacturer
Understanding Acumatica Pricing
New Features in Acumatica 2019 R1: Exciting Changes Ahead