As the “central nervous system” for a manufacturing business, Enterprise Resource Planning (ERP) software is responsible for the distinctive choreography of people, labor and materials that makes each manufacturer successful. The challenge in selecting the right ERP solution for a manufacturing operation comes from differentiating between how most ERPs are the same, but different. Just as every car has an engine and wheels, but not all cars are alike in term of fuel efficiency and safety, so too do ERP solutions differ greatly in how they handle common manufacturing business processes.
With that in mind, here are six standard features to look for in manufacturing ERP.
1) The platform and tools
All ERPs comprise a database and application code, coupled with user security functions and some degree of customization. They tend to offer user-defined fields (UDFs), for instance. Most ERPs also enable data import and export, as well as some data management capabilities. They invariably have reporting and data inquiry tooling, though the depth of functionality here can vary greatly by vendor. Cloud hosting is almost always an option, but not all cloud ERPs are cloud native. This is an important distinction, as cloud native design can make a difference in ease of deployment and flexibility. Mobile capabilities are common as well, but they, too, can vary quite a lot in practical terms.
2) Accounting
Every ERP system for manufacturing comes with accounting features. They may be built in, or available in a separate module. The manufacturer gets a general ledger (GL), accounts payable and receivable (AR/PR) and bank functions like cash management or account reconciliation. When considering a solution, however, it’s worth figuring out if the ERP limits the number of account segments available. This can constrain operations. Or, determine if a proposed solution supports national or parent accounts as well as budgeting. Multi-entity and multi-currency support are also useful to have—even if they are not immediately required. It’s optimal to have accounting features a accompany can grow into, rather than be forced to migrate to a new system when needs outstrip the abilities of the existing system. Other good-to-have features include inter-company accounting, project accounting, payroll and third-party application integration.
3) Sales
Manufacturing orders all start with a sale. The better the ERP can handle sales, the smoother the whole order fulfillment process will go. The right manufacturing ERP will offer drop-shipments, returns and exchanges, as well as sales commissions, quotes, shipping, pricing, backorder management and labeling. A Customer Relationship Management (CRM) module is helpful too, as are commerce integration and support for retail point of sale (POS) if that is part of the business.
4) Inventory
ERPs for manufacturing generally offer standard inventory functionality like stock and non-stock item management, including unit of measure definitions, pricing and packaging. They also handle ABC Codes, physical inventory, warehouse transfers, lead times, reorder points and economic order quantities, coupled with minimum/maximum stock levels. Some solutions let inventory managers handle kitting, barcoding, disassembly and lot/serial tracking. They may also support advanced replenishment based on safety stock and country of origin.
5) Purchasing
Procurement is one of the main drivers of profitability in manufacturing. ERPs meet this need with purchasing features, which may include blanket orders, purchase orders (POs), receipt of goods processing and calculation of landed costs and Free-on-Board (FOB) definitions. They may support vendor returns and bar code scanning, too. Some solutions, such as Acumatica cloud ERP, natively support approval workflows for POs and vendor Request for Quote (RFQ) bidding.
6) Manufacturing
And, of course, a manufacturing ERP will support manufacturing requirements like Bills of Material (BOMs), labor entry, work orders, batch orders and the like. Some ERPs offer advanced planning and scheduling, coupled with material requirements planning (MRP) and engineering change orders. A manufacturer’s mode of operation will determine the right mix of features to seek in a solution. A job shop, for example, will have different needs from a batch manufacturing operation, and so forth.
Learn More in Our Manufacturing ERP Handbook
If you’re shopping for a new manufacturing ERP platform, you’re probably drowning in information. After weeks of product research, it can be tempting to choose a system based on a gut feeling, or a recommendation from a peer. But now there’s a better way to cut through the marketing hype and determine which kind of ERP will be the best fit for your business.
Read our Manufacturing ERP Handbook to understand industry requirements and general features available in leading manufacturing ERP applications. Download now.
Acumatica Cloud ERP for Manufacturing
Flexible, powerful, and born in the cloud, Acumatica Manufacturing Edition delivers all the functionality mentioned in this artcile—providing the solution you need whether you are a small shop or a multinational firm. Designed and built for manufacturers by manufacturers, Acumatica Manufacturing Edition helps you to streamline your operations, reduce costs, and see the entire picture.
Watch our Acumatica manufacturing demo to learn more.
To learn more about what manufacturing ERP solution is right for your business, contact us for an informative demo and dialogue.
Additional Manufacturing Resources
How to Automate Shop Floor Data Entry with Manufacturing Data Collection (MDC)
How Manufacturing Production Management Software Can Work for You