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"Sescoi is a leading international supplier of CAM, CAD, ERP & job management systems.
Sescoi develops, markets and provides technical support and training for WorkNC automatic CAD/CAM software for 2 to 5-axis machining, WorkNC-CAD, WorkXPlore 3D, as well as WorkPLAN Enterprise and MyWorkPLAN, its ERP and job management solutions for custom manufacturers. "
Source : Sescoi
Project-based Companies Need Specialized ERP Solutions
Enterprise resource planning (ERP) is also known as:
MRP System,
Manufacturing Resource Planning,
Material Requirement Planning,
Material Requirements Planning,
Material Requirements Planning Implementation,
MRP ERP,
Modular BOM,
MRP II,
Just-in-time,
Material Planning,
Manufacturing Resource Planning Software,
Distribution Resource Planning,
Scheduling,
ERP Process Implementations,
ERP Evaluation,
ERP Software,
Integrated ERP Software.
What is ERP?
ERP is fairly universally recognized as meaning
‘Enterprise Resource Planning'. Ultimately, the
goal of an ERP system is to integrate the diverse
data and processes of a business into a unified
system or process. Depending on the business,
there can be many different processes to integrate,
for example: estimating, resource management,
accounting, inventory management, cash flow,
cost analysis, invoicing, order entry and job
tracking. These are just some of the more popular
processes that can be handled by an ERP system.
ERP systems are a natural evolution of Material
Requirement Planning (MRP) systems, and
Manufacturing Resource Planning (MRP2) systems.
Both of these systems had a major focus on
supplies and materials required for the manufacturing
process. They typically did not focus on business
operations.
Why is project-based activity different?
Companies who work on a project basis face the
challenge of managing complex projects where
each new job is often similar, but with a number of
subtle differences, to previous ones. Very few ERP
products within the ETO Engineering-to-order
category can provide a specialized solution for this
type of company.
Project-based companies need to have a customizable
set of technical variables, often called "characteristic
criteria", that define the complexity and
characteristics of a project. These criteria can
either be used as inputs sent to a spreadsheet to
automatically calculate the cost of any new project,
or can be used to filter and find similar projects
completed in the past, which can then be
copied and edited.
Project-based companies also need an integrated
document management system, so that all files
and attachments can be saved and shared within
specific subfolders for each project.
The data structure needs to support the fact that
projects can have many modifications throughout
their life cycle. Therefore, a quotation may have
more than one version, and a sales order could
also have more than one version or index, and the
software should make it possible to track costs
generated by each modification.
These companies also need tools to handle communication
among project members, who can belong to
one or several groups linked to each project.
ERP systems and large corporations
with project-based activity
Many large corporations have already found they
cannot operate efficiently without an ERP type
system. Sometimes they develop one internally,
utilizing a large amount of resources to make and
manage this system. Alternatively, they purchase a
third party system and implement it into their infrastructures.
In many cases they may have deployed
an ERP solution that has not been specifically
developed for project-based activity and which
therefore lacks many of the features needed to
handle this type of operation efficiently.
Implementing an ERP system within a large corporation
involves significant time and resources,
especially when the system is internally developed
or requires an important degree of customization.
This is why, when evaluating new systems,
a company should also consider training costs,
implementation costs, customization costs as
well as maintenance costs. When a company
decides to develop its own solution internally, it
commonly makes the mistake of considering just
the developments costs, overlooking the high
maintenance costs that the internal solution will
run up in future years.
ERP systems make sense even for small
companies with project-based activity
Many small and medium sized business owners
make the mistake of thinking that ERP systems are
only practical for very large businesses. They may
think that they will be able to implement a business
management solution when they grow to a certain
size. However, this thinking will actually cost them
more in the long run. As the amount of historical
data grows, the more difficult ERP implementation
may be. Additionally, once a business has many
processes in place, if the ERP system does not
work the same way, one of two things will be required.
Either the ERP system will require significant
customization, or the company will have to change
many of their processes to match the software.
Additionally, there are opportunity costs when a
small business does not implement some type of
solution. Owners may spend a significant part of
their time trying to figure out the status of certain
jobs in progress, instead of simply looking at a
computer screen. This lost time could be spent on
acquiring new business, or optimizing the processes
to reduce overtime costs.
Certainly, an ERP system that is scalable, meaning
that it can grow as the business grows, makes
practical sense for a small business. Small companies
can purchase just what they need to manage
their tasks, and upgrade to additional users and
modules as their needs warrant. Starting early
means the company avoids future large-scale ERP
implementation headaches.
Complex ERP vs. Out of the Box
Different ERP systems offer varying amounts of
customization possibilities. Others have several
modules that work in an "out of the box" environment.
Every company must look at their needs and
determine how much customization is required.
Highly customized systems have some disadvantages
for the small business owner; they require
full time systems administration personnel to
manage the system, adding to staff costs.
Systems that require a high amount of customization
will also bring significantly higher upfront
implementation and training costs. This adds complexity
instead of simplifying the job management
process. ERP systems with high complexity also
carry high maintenance costs for upgrades and
operating system changes.
Estimating and Quoting
For most small to medium sized project based
manufacturers, business begins with quoting or
estimating a particular job. This is often an area
where significant opportunity costs exist. Often,
the most experienced people are the ones who
make the quotes. For example, in a mold shop, a
experienced moldmaker may be responsible or
have input for making all of the quotations.
Traditionally, several quotes are made before one
becomes an order, with the experienced moldmaker
involved in all of them.
Every minute that an experienced manager or
employee spends making a quote, is one less
minute spent on actual production. That is an
opportunity cost the business does not have to
accept: if the quoting process could be streamlined
and simplified, then managers and employees
could spend more time directly on activities that
support the bottom line.
One way to streamline the process is to use a software
module for quoting and estimating. Another,
and important, way to streamline the quoting process
is to have historical data readily available
during the quoting process. Often one quote will
be similar to a previous quote or job. Utilizing historical
data as a template, particularly data from
previous profitable jobs, can not only streamline
the quoting process but also ensure the quotation
is set at the right level. This captured data can be
exploited even further and placed with calculations
into spreadsheets to accurately calculate costs
and hours for a particular job.
Analyzing Data
Manufacturing departments and job shops start
the estimating process by first analyzing the part
that has to be manufactured. In some cases this
may involve loading the geometric CAD data.
Being able to load standard file formats such as
IGES and STEP is important, yet it may also be
necessary to load popular native CAD system files,
such as Unigraphics or Catia.
Many people often confuse a CAD Viewer with a CAD
Analyzer. The two are not the same. It is important
that the person doing the quoting be able to gather
data about the model to make the quotation as accurate
as possible and to do that an integrated CAD
data ‘analyzer' is vital. For instance, using the volume
of the part, and applying a specific density, the weight
of the final part can be determined. From knowing the
volume of the part, and the stock block size, the
amount of material to be removed can be identified.
Identifying varying thickness can help determine how
to fixture parts. Knowing the smallest radii on the part
will help to determine tool sizes for manufacturing,
and so on…
Streamline and Track Paperwork
Once a quotation is accepted, a company will
usually receive a purchase order. The ERP system
should have an automated way of converting the
quote into an order. Keeping track of all paperwork
associated with a job right from the start can save
countless hours later trying to find missing documentation.
Raw materials and other necessary
components can be ordered from the quote turned
job order.
Having a document manager within the ERP system
will give users the ability to quickly find all files
associated with a particular job and quote ' be
they files of the original CAD data, purchase
orders, invoices, shipping labels or emails and
sign-offs associated with the job. Additionally,
tiresome paperwork processes can be streamlined
and automated. All job-related invoices, shipping
labels, confirmations and other necessary documents
can be automatically generated, printed or e-mailed.
Integrated Job Tracking and Scheduling
Often the small business owner is also the manager,
scheduler and salesperson. This person may
spend a significant part of his or her morning's
work checking the status of each job. Add in interruptions,
and it may not be until mid morning or
lunch when decisions are made and actions taken,
by which time these are based on hours' old data.
If certain tasks need to be adjusted, it is obviously
best to do it when the work shift starts, not in the middle.
Having a real time display of job and task status,
at any time of day, allows the manager to make
adjustments to keep processes moving smoothly.
Naturally, the status can be checked any time during
the day but also, if a night shift is in effect, it can be
checked from a computer at home.
Spending a few minutes using simple scheduler
software can get any job off on track from the
start. By setting a preferred finish date, and scheduling
backwards with simple drag and drop functions,
managers will be able to create information
that can easily be shared with the employees. This
can keep down-time, while people wait for their
next job, to a minimum.
Using job tracking functions to compare real status
to what was forecast in the initial quote or job,
managers can know at a glance what is on track
and what is not in terms of costs; both for time
spent and for purchased materials. The manager
can see at a glance whether the company is
making money on a job, or starting to lose money.
Working with Subcontractors
Often a company will have to send certain work
out to a sub contractor or third party. Tracking and
managing portions of the job that are subcontracted
are just as important as tracking internal jobs.
Will the subcontracted elements be delivered on
time? What has the particular subcontractor's
track record been so far? Will the company's own
jobs be ready at the same time as the subcontracted
jobs?
Working with Legacy Data
Many companies utilize simple office products
such as Microsoft Word® and Microsoft Excel®
when starting out. Often, a lot of useful data is
contained within those spreadsheets. This data
may include costs for processes, profit margins,
rates for machine operations, etc. It does not make
sense to force a small business to re-enter all of
that data into a new job management software
package. Proficient and easy to use job management
software will allow users to utilize the data
from existing spreadsheets. This data can be used
to get a user productive with their new management
software faster.
Similarly, companies may already have print templates
in Microsoft Word®, prior to installing an
ERP. If the ERP is capable using those pre-existing
templates to print, this will save a lot of time
during the configuration phase.
Communicating with other Systems
Sharing the status of a job in progress with the customer
is often part of the service process. It may be
necessary to output job status into a file format usable
by the customer, without giving away proprietary
and special customer data. The file format to share
information may be a simple Microsoft Office® product
like Microsoft Excel® or something a little more
detailed like Microsoft Project®. In either case, the
small business should be able to share job status with
their customer, without giving away company confidential
information.
Include Accounting
or use Third Party Software?
Although there are many advantages to implementing
a job management or ERP system early on,
the reality is that there are many companies that
have not. However, these companies have usually
purchased and are already using an off-the-shelf
accounting system.
Many complex ERP systems have accounting as a
built in function and module. Other systems may
work in conjunction with third party or off-the-shelf
accounting packages. Many of these third party
accounting packages include an API, an application
programming interface, to allow ERP and job
management systems bi-directional communication
with their system.
There are many benefits to retaining existing third
party accounting software including significant
time savings as users do not have to re-enter data
and learn new software, and the company can pick
or stick with the accounting system that works
best for them.
Room to grow
for mid sized manufacturers
Is the ERP system chosen for the small to mid
sized business suitable for the larger enterprise? Is
the underlying database structure powerful
enough to handle a large number of customers and
suppliers? These are important considerations
when selecting an ERP system.
When starting out, a company may simply use
quoting, job tracking and analyzing functions. As
the company grows, they may want to add items
like bar code readers or touch screens for automatically
entering and tracking time data. Perhaps
eventually, they would like to add modules for
inventory management, quality management or
cash flow forecasting.
Having a clear and easy growth path makes sense
when evaluating the suitability of an ERP system.
Ideally, modular software will allow new functionality
to be added when needed, as opposed to the
company spending up-front for functionality that
will not be fully utilized in the short term.
Choosing an ERP
or Job Management System
When choosing a program on which to base their
business management processes, the following
are just some of the criteria a company should
consider:
Security: How secure is the database, and how
can a company limit access to certain data to different
employees? The software should include
controls for limiting functions and data by user.
Maintenance: What is required for maintaining and
backing up the database? The simpler maintenance
is, the more time people can spend on core
company work.
Ease of Use: Any employee should be able to be trained
on the basic functions in a short amount of time.
Company behind the software: Does the software
developer understand the market? How long have
they been in business?
Modules: Are the necessary functions available,
either in the core product or in modules?
However, the most important aspect to consider is
whether the system can grow as the company
grows. It would be very expensive and time consuming
to replace one system with another just
because the original was unable to grow at the
same pace as the company.
The answer for many companies may be the new
project-based management solutions from Sescoi.
The MyWorkPLAN job management system utilizes
a powerful database for basic tasks of estimating,
job tracking, information management and scheduling.
As a small or medium-sized company's
needs grow, it can purchase additional modules.
Larger companies can purchase additional modules,
or upgrade to WorkPLAN Enterprise. This solution
allows companies to retain the same familiar
user interface and common database at all stages
of a company's growth.
Conclusion
ERP systems are not just for large businesses. Using
ERP or job management systems can bring benefits
to small and mid sized companies. Real costs and
opportunity costs increase the longer a company
postpones implementing a job management solution.
Choosing a small system that can grow as the business
grows can make practical sense. This involves
looking at systems with easy to use interfaces and a
modular structure. In all cases, companies with project-
based activity must use an ERP solution specifically
designed for this purpose.