At the start, all that’s needed is a novel idea and some manufacturing know how. With success comes growth, though, and with growth the business needs more structure.
“[Manufacturers] start out with Excel spreadsheets and maybe it’s one or two guys,” said Fred Tillman, vice president of product development in the manufacturing division of ECI Software Solutions, Fort Worth, Texas. “All of a sudden they’re hiring additional people and need to standardize assembly instructions, they need to standardize a knowledge base. It’s very difficult to do without an ERP system,” he said referring to enterprise resource planning software.
“And then if you go beyond one shift you can’t be there the entire time,” Tillman continued. “It’s fine as long as things are going well with your day-to-day operations, but the big thing is when there’s exceptions—materials show up late or a customer changes an order. If you’re doing all this via paper, it’s very time-consuming to handle those exceptions.”
After a while, the startup becomes a small or medium-sized company. It might be bidding on jobs or doing production work.
“To compete and cut costs, you’d better have a good system,” said Mike Melzer, vice president of operations at Global Shop Solutions, The Woodlands, Texas. “If you’ve got a good system, you can sleep a lot easier knowing what’s going on rather than saying, ‘If I take this contract with John Deere or with GM, what’s that going to do to me’?”
The “one or two guys” are ready to shop for an ERP system, but they have questions: How relevant is ERP software to small and medium-sized manufacturing operations? ERP software has the reputation of being complex and unwieldy. How is it being made simpler and easier to use for manufacturing operations? How can a broad-based software solution be modified and customized specifically for manufacturing operations?
Some of that customization for manufacturing is already done. “The main points of difference (in Epicor ERP software) are around the fact that we have production processes for manufacturing,” said Christine Hansen, director of product marketing manufacturing for Epicor Software Corp., Austin, Texas, which recently rebranded its manufacturing ERP software Kinetic. “You’ll find that we have cost-based estimating, engineering with CAD integration, production and work order or job management capabilities, quality and an MES (manufacturing execution system). Those are the core things we’re focused on in the manufacturing product.”
But if the user wants even more customization, Hansen’s company and others have developed solutions that refute the “complex and unwieldy” reputation. ECI even has ERP software configured for job shops, called JobBOSS2.
Epicor’s configuration feature, Application Studio, uses a drag-and-drop process to design its Kinetic ERP application in a layer that sits on top of the app’s inner functions and is easy to change, Hansen said. Application Studio lets customers tailor what groups of workers see when they open their computers. Individual workers can refine what shows on their screens even more from there.
For example, if workers need to see data collected from the plant floor, they can sort the most relevant fields. They can drill down to see images of a finished product, add information captured during production and leave information for the next shift. “There’s a lot of opportunity here for users to align their workflow within the data collection system to align with how their business uniquely works,” Hansen said.
Also configurable for different job categories are dashboards, a visibility tool used to filter information in a way to see exceptions that need attention, such as jobs that are late or jobs waiting for material.
“Dashboards help to make sure you’re aware of issues before they become larger problems,” she said.
A possible alternative to dashboards is Epicor Collaborate, a customizable messaging tool. Within the customer relationship management (CRM) function, an employee who is bringing in a new customer can automatically ask the finance department to do a credit check. He can also set up automated notifications to follow up on a quote or notify customers when their orders are shipped.
“Instead of leveraging dashboards for all of these indicators, you can be notified of the events you choose,” said Hansen.“Unique to your business are the insights you want to get from your operations, and that’s where a good reporting package comes in,” said Tillman. He urged to ask if the product has a reporting structure where either the customer can generate reports or hire a professional services team to set them up.
“The reports and the KPIs (key performance indicators) that you want to measure and the insights you want to gain may be specific to your manufacturing operations,” Tillman said. “So, you want to have a good reporting package.”
Undeniably essential is the ability for third-party integration. “A vendor that has multiple pre-built integrations is a way to extend or modify the ERP,” said Tillman.
For example, if you’re a manufacturer who sells to the public, you may need an e-commerce package because it will make you more efficient, Tillman said. Or a shop may want to use business activity monitoring (BAM) software like KnowledgeSync, which is from a company owned by ECI.
“KnowledgeSync allows you to continuously alert or check for conditions that may happen and then take a corresponding action,” Tillman said. “It really extends the ERP outside of its purpose.”
For instance, the BAM may sense an overdue invoice in the ERP and automate workflow to the finance department to put a hold on that customer’s credit.The sales team using the Salesforce CRM application may need to get order information out of the ERP. The team can call application programming interfaces (APIs) from the ERP to extract the data and import it to Salesforce.
“The API layer is a way to securely get data into and out of the system and use it for integrating or extending the system,” Tillman said. “We try to provide all of the third-party integrations, but there’s always some other system that somebody wants to integrate, and the APIs enable them.”
Another easy way to make customization effective may require writing a few lines of code to flag floating holidays like Memorial Day and Labor Day.
“It might be six lines of code, checking against the holiday calendar; you hit it and it says, ‘Labor Day, we’re not going to ship it on that day’,” Melzer said. “You write it in [Global Shop Solutions’ in-house coding language] GAB which is very similar to Visual BASIC,” referring to the shortened name Global Application Builder for the software.
Quality documents are stored in Global’s document control system. “They’re not putting a part on a plane without knowing where the material came from, so when you buy your material from a vendor it’ll have a lot or a heat number associated with it,” Melzer said. “You can scan your material’s number and when you use that on a work order or a job and you ship your part to Boeing, SpaceX, or GM, you can produce a certification packet so they know exactly the whole line on where it came from.”
The document control system is useful in industries well-known for tracking quality—aerospace, automotive and medical. But a newer player dependent on tracking materials and processes is the oil and gas industry, which started focusing on quality more after the Deepwater Horizon oil spill in the Gulf of Mexico in 2010.
“I mean it flipped overnight,” Melzer said.
Remember the “one or two guys” who started a manufacturing company? What if they were content to stay small and questioned the relevance of an ERP for their shop? Couldn’t they get by using a spreadsheet? “A lot of our competition is a spreadsheet,” said ECI’s Tillman.
But being small doesn’t mean your business is simple. “We can have a manufacturer who’s small in terms of revenue, but they’re very complex in their manufacturing processes,” said Epicor’s Hansen.
An ERP may even unwittingly help with human resources issues in unexpected ways. This can involve taking a step as simple as highlighting fields in yellow to show users what information they must fill out on a screen, said Melzer. “If you’re in a business where you’re flipping people or people are filling different roles all the time, it would just help to say, ‘Here are the fields we definitely need to fill out’,” he said.
In another example from Melzer, an ERP can help identify which employees might need training even when overall production numbers look good. That happened at a Global Shop Solutions customer’s shop in the automotive industry in Tennessee that got a 20 percent production boost overnight, Melzer said. The company installed a monitor on the shop floor with a screen that tracks individual workers’ production. While most of the workers had good numbers, one struggled.
“What happened is they go to the break room and others say, ‘What’s going on’?” Melzer said. “If they can teach him something, they will. The front office didn’t have to do anything and, really, overnight they gained 20 percent.”
ERP software may have a reputation as being complex and unwieldy, but it also offers automated processes and access. For example, Epicor has an embedded maintenance management tool that can enable a manufacturer to track equipment from a maintenance perspective. It can tally how many pieces have been produced on a machine and send an alert when it needs maintenance.
There is also automation in the workflow. “There’s a tremendous amount of automation across the business from user to user,” said Hansen. “For instance, one user may be entering a quote or an order. That then flows through to production, which then flows through to procurement to say, ‘Here’s what we need to buy,’ which then flows through to the invoicing processes as well as the accounts payable.”
Global Shop Solutions’ software does something similar.“We hate dual data entry,” Melzer said. “Having a seamless ERP system allows you to put information in one time and everything flows. It just makes your life so much easier.”
An ERP also makes it easier to do business with you, Tillman said. “If I’m a customer, an ERP can help me better determine lead times,” he said. “It can provide online information where a customer can log in and see the status of his order and if things are running on time. It can proactively notify a customer when his job is done.
“The CRM capability really allows you to see what has this person bought in the past, what is their history, so that when they do call back you have all of that information at your fingertips,” he continued. “That’s very difficult to do with a paper-based system.”
Almost before they know it, the “one or two guys” with the idea and the know-how have become a full-fledged shop with a business that’s humming along.
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