If you receive errors when attempting to view this white paper, please install the latest version of
Adobe Reader.
"IQMS, a leader in
enterprise resource planning software and maker of the industry's only single-source
software solution, provides manufacturers with all the functionality to efficiently manage and improve business processes. "
Source : IQMS
How the Small Become Mighty
Best-choice ERP is also known as :
Best-choice ERP,
Top 10 ERP Software Apps,
2009 Top 10 ERP Software Report,
Resource for ERP System Comparisons,
ERP for SMBS Open Source,
ERP Best Choice for Mid-market,
How the Small Get Mighty,
ERP vs Best-of-breed,
Best Choice ERP Report,
Service-oriented ERP Best Choice,
ERP Software Test Drive,
ERP Best Choice for Moving,
Compare ERP Software Options,
Managing Director for CRM-ERP,
Compare ERP Software Solutions,
Best-of-breed vs ERP SCM,
Billing ERP and CRM,
ERP Tools Techniques and Applications,
Post-Implementation Evaluation of an ERP SIS,
ERP Definition Free Download,
ERP Definition Toolbar,
Successful ERP Integration,
ERP Best Ingredients,
Best Choice Including Ease of Use,
Trucking ERP Business,
Top 40 ERP Software,
ERP Software Systems Evaluations,
Customizing ERP Software,
Management Software ERP or Best of Breed,
Customization and ERP Success,
ERP Software on Managing Automation,
ERP Showdown.
Small to mid-size manufacturers (SMMs) are a driving force in the world economy. In the U.S. alone
SMMs employ more than half of all workers, generate two-thirds of all new private-sector jobs, and
produce more than half of the country’s total economic output. SMMs have proven to be inventive,
adaptable and receptive to customers’ needs. However, despite the ingenuity and determination many
SMMs display, today’s demand-driven, global economy is challenging them to operate with the same, if
not more agility than their much larger counterparts.
Rapidly changing technology, ever shifting customer demands, low-cost competition abroad and rising
energy costs squeeze SMMs more than larger firms. SMMs must operate with fewer resources, and
because SMMs are increasingly acting as suppliers to larger original equipment manufacturers, the
pressure to reduce costs and streamline operations falls squarely on them.
Demand-driven manufacturing demands control and flexibility, a combination that can only be achieved
when shop-floor transparency operates efficiently and in tandem with the whole enterprise. To stay
competitive, manufacturers must deliver quality to their customers, at the right price, on time and with
extraordinary customer service, whether the customer is in town or across the ocean. Large-scale
manufacturers know this and have integrated plant management software and Enterprise Resource
Planning (ERP) technology to gain a competitive edge. Now more than ever, SMMs need to do the
same.
Yet even as ERP is becoming a necessity for SMMs, not just any ERP system will do. The market is
flush with ERP vendors, from best-of-breed niche players to well-established giants and newly hatched
software-as-a-service (SaaS) providers, all offering a variety of systems and services, some of which are
geared toward manufacturing and others that simply catch manufacturing in a general net. In fact, most
ERP vendors have set their sights on SMMs as a key growth sector, and as a result have begun to
market ERP solutions packaged purposely for SMMs. Still, with fewer resources to risk, SMMs are more
compelled than larger firms to make a right choice in ERP, right from the start.
With a comprehensive ERP system in place, SMMs can simplify and speed up production; operate
profitably with less oversight; control costs; reduce inventory; shorten lead times; assimilate customer,
supplier and internal communication; and gain strategic insight through access to financial and
performance data. The list goes on to support one fact—ERP makes SMMs mighty. But what type of
ERP system is best suited to the needs of SMMs?
Best Choice ERP: What Do Small to Mid-Sized Manufacturers Really Need?
In a recent study, the Aberdeen Group found that companies that automate and streamline
workflows across multiple sites, including suppliers, partners and manufacturing sites, produced
66% greater improvement in reducing total time to delivery and achieved a more than 10% gain
in global market share. Dynamic supply chains such as this are rarely achieved using, as many
SMMs do, disparate spread-sheet based applications and single-point production management
systems that do not share critical business data.
By its very nature, ERP is supposed to ease complexity and provide timely access to business
information for better collaboration up and down the supply chain. Best-choice ERP for SMMs
expands this concept to embrace the unique and varied requirements of industry-specific
manufacturers. While finding the best fit in ERP is an individual process for every business,
several key factors make some ERP choices better for SMMs. These include: manufacturing and
industry-specific capabilities; true shop-floor integration; cost-efficient comprehensive
functionality that scales to support growth and evolves as technology evolves; a centralized
database that makes real-time information accessible to everyone who needs it; and a singlesource
vendor that delivers a long-term competitive advantage with measurable results.
Designed for Manufacturing
Best-choice ERP for SMMs does not redefine how things are done in a manufacturing
environment; rather it consolidates and automates established processes across the enterprise
so that valuable labor resources can be redirected toward company growth. Manufacturers face
distinct challenges. ERP systems that are designed specifically for manufacturing – including
repetitive, process and discrete – are more in tune to those challenges, and are more readily
customized and implemented than systems that require patches or add-ons to become
manufacturing ready. As one automotive manufacturer puts it, “ERP built for manufacturing lets
us manage a high level of product and service complexities, and manage it well.”
As indicated by the quality manager at one ISO 9001:2000 certified manufacturing company:
“The single most important benefit our ERP system provides is traceability. The adaptability of
our system allows for customized programs and reports to accurately support corrective actions,
deviations, return material authorizations and serialized lot number tracking, making the system
essential to our capturing and providing accurate data for ISO audits.”
True Shop-Floor Integration
The real value of any manufacturing operation comes from the shop floor. Best-choice ERP for
SMMs seamlessly connects the shop floor to the enterprise, allowing a manufacturer to see,
analyze and control its hub of operations in real time for the best competitive advantage. No
matter how lean the production process, if the resulting data cannot be seen and acted upon in
real time, or worse must be manually fed back into the ERP system, all savings are lost. In fact,
according to Forrester Research, shop-floor visibility is imperative when it comes to managing
such supply chain issues as outsourcing, customization and shorter product life cycles.
On-machine monitoring that feeds real-time information such as shop productivity, machine
utilization, scrap and downtime into the ERP system, and alerts personnel in advance of
problems gives SMMs the advantage of total visibility and control. It also enables SMMs to make
corrections before their cost structure is jeopardized.
Other functionality such as embedded preventative maintenance and incorporated quality
controls are critical to realizing cost savings and efficient operations in a manufacturing
environment. For example, one mid-sized manufacturer operating a comprehensive ERP system
with shop-floor integration gained more than 20 percent press time through preventative
maintenance, and reduced repair time and month-end close time by 75 percent respectively.
Another manufacturing company using the same system more than doubled the complexity of its
operations and grew its business more than 60 percent without adding additional labor support.
Cost-Efficient, Comprehensive, Extendable
The Aberdeen Group maintains that SMMs want less complexity in an ERP system, but still need
the same basic functionality as larger companies. That’s no surprise given SMMs need to run
lean, if not leaner than bigger manufacturers. To create a more agile manufacturing business,
SMMs need deep functionality and broad interoperability within their ERP system. Best-choice
ERP for SMMs delivers this in a cost-efficient package that offers the ability to start small but
scale up, without the need for third party add-ons. For example, features such as automated EDI
may not be needed when the system is initially purchased. However, a fuller range of
functionality should be readily available and fully compatible within the system so that
subsequent expansion remains cost efficient.
Getting ERP right the first time means getting ERP that lasts a long time. Not only is best-choice
ERP for SMMs extendable as a company grows, but it also evolves as technology evolves to
provide continuous strategic advantage, again without the need for third party software or
custom recoding. With less money to invest, SMMs need an ERP system that, as one small
manufacturer describes, will be a “mainstay in day-to-day operations well into the future.”
Centralized, Real-Time Data Access Up and Down the Supply Chain
Even the most accurate and timely data is worthless if its power remains untapped, and that’s
exactly what happens when multiple, separate data points are used to collect and maintain
critical business data. Multiple points of data entry waste time and money, both in day-to-day
operations and in any attempt to build a system interface. Best-choice ERP for SMMs folds the
entire supply chain into a central database that draws in information and disseminates it in
real-time to those who need it most, whether they’re an executive in the boardroom, a machinist
on the shop floor, a supplier scheduling a shipment or customer wanting to confirm a delivery.
Forrester Research predicted in 2003 that within ten years “static supply chains will be replaced
by adaptive networks” that have the flexibility to handle real-time variation in supply, operation
and demand. Best-choice ERP for SMMs already offers this level of flexibility, providing
functionality such as visual monitoring and instantaneous two-way communication along the
supply chain as events occur.
The power of centralized, accessible real-time data transcends the barriers many SMMs have
grown accustomed to facing. As one manufacturer states: “With the same reliable data
accessible to everyone in the company, the management team and individual employees are
equally empowered to push for higher quality standards.” This same company states that the
benefits of having real-time data visibility and control ripples outward to suppliers and customers
alike: “Now we forecast raw material needs precisely. This has helped us build better supplier
relationships and secure better pricing, so we are able to carry those savings on to our
customers.”
Single-Source for Long-Term Competitive Advantage
SMMs constantly face a range of operational and managerial challenges; ERP shouldn’t be one
of them. The National Institute of Standards and Technology (NIST) recently noted that
irregularities in manufacturing software and incompatibilities among software applications are a
chief cause of delays and higher costs in the manufacturing industry. Best-choice ERP for SMMs
comes from a single-source vendor that delivers a total system—including sales and distribution,
accounting, quality management, production monitoring and reporting, and inventory control—all
designed to work in unison and deliver results without the complication of third-party software.
Single-source solutions can also provide as much as a 70 percent reduction in training and
implementation costs over those that are typically incurred during multiple-source ERP
installations.
Best-of-breed niche vendors deliver only a piece of the puzzle, while the larger ERP vendors
repeatedly acquire best-of-breed point solutions to extend or upgrade their dated software
offerings. Service-oriented architecture (SOA) is increasingly being touted as a means to quell
the complexities inherent in the best-of-breed systems that are cobbled together using third-party
software. But any multiple-source system will require more time and money to implement, update
and maintain than an ERP system written, developed and supported expressly by one vendor.
Another option that some SMMs may consider for its low initial investment is hosted software as
a service (SaaS). However, this option often lacks flexibility and the customization that SMMs
need to compete successfully in a demand-driven manufacturing environment. Only a singlesource
vendor can deliver a comprehensive, manufacturing-driven set of ERP functionality that
is guaranteed compatible and cost efficient.
Because single-source ERP makes the most sense for manufacturing companies that need
deep functionality at a reasonable cost, it’s the best-choice for a small to mid-sized manufacturing
environment. But cost and functionality are not the only factors driving long-term competitive
advantage. To ensure success, SMMs should look for ERP vendors willing build a long-term relationship.
A best-choice ERP vendor is committed to its customers’ business success, not just
through implementation but for the long haul, offering continuous improvement through support
services, training programs and user conferences, as well as low or no-cost technology upgrades.
Conclusion
What an ERP system does for large manufacturing enterprises it should also do for SMMs. That
is support growth by providing flexibility and control to meet evolving demands and secure a
competitive edge in the global marketplace. While most large manufacturers are already leveraging
ERP systems to gain a competitive advantage, many SMMs still rely on spread-sheet based
systems. As manufacturing technologies continue to advance, and offshore manufacturing practices
become more sophisticated, SMMs that have not tapped ERP’s potential may be caught at
a disadvantage.
Fortunately, many ERP vendors are now packaging systems to meet the specific needs of
SMMs. The best of these solutions for SMMs are those built upon single-source technology that
delivers both ample manufacturing-focused functionality for current needs and the ability to costeffectively
scale for growth.
As many SMMs are realizing, ERP is essential. Although not just any ERP system will do, with
the right ERP system in place, SMMs can get mighty and thrive in the face of bigger competition.