How to Select an ERP System in Asia
Top performing manufacturing companies know they must choose carefully when selecting a system to run their business. But what should they be looking out for? We will discuss what to look out for when choosing an ERP System in this article.
You have most likely been running your manufacturing business for some time now. It may even be a family run business that has been operating for generations.
This may make facing change a huge challenge, especially when there is a need to influence an older generation of veterans who are used to their way of doing things back in the day.
The reality, however, is that the only constant in life is change, and that goes the same for businesses as well. Today’s manufacturing environment faces all sorts of new pressures and competition that can be economically or customer driven.
On the economic front, one thing is for certain – the cost of doing business is not going down. In fact, inflationary pressures may even cause you to feel impact on your operations sooner than you may expect.
Take for instance the recent pandemic and various types of lockdowns and restrictions imposed by governments around the world. Can your business afford to be ill-prepared for another international level crisis that affects not just the local economy, but the global economy at large?
Even if you choose to remain idle, your competitors most definitely will not. New technologies are emerging to help manufacturers operate at levels of efficiency never before thought possible.
The possibility of managing your business from remote locations as well as operate a manufacturing facility with minimum number of staff is now possible with Industrial Internet of Things, Big Data Analytics, Robotics and Blockchain technologies.
Industry 4.0 will allow Factories of the Future to run lean, low cost operations with unprecedented visibility into daily manufacturing operations, inventory management, improved management of suppliers (SRM) and customers (CRM).
Seeing the many challenges to keep pace with not only your competitors, but the business landscape itself, one thing is for certain, you will need a solid and fully integrated system as the backbone of your business operations.
The next challenge you face will be the task of choosing the best system that fits your business. But how do I do this you may ask.
Choosing an Enterprise Resource Planning (ERP) system to serve as the core of your manufacturing business is not easy and the decision should not be taken lightly.
The market is awash with software companies trying to peddle their ERP wares to weary SMEs. Many of these ERP systems are “Jack of all Trades” trying to address every possible industry vertical, making them too generic for specific verticals such as manufacturing.
To make an industry specific ERP system requires true deep domain knowledge that takes years to come by. Truth be told, many SMEs do not have the resources to truly take the time to research the various ERP system options well enough before deciding to invest.
Decisions are often made based on the reputation and brand of the software. This often leads to wrong decisions being made, and the consequences can be painful and if this was you, it could negatively impact your bottom line.
We would like to provide you with 5 key points to keep in mind when you are in the process of selecting an ERP system for your business.
Does the ERP vendor have specific experience in your industry vertical?
As we mentioned above, many ERP systems are trying to address multiple industry verticals. This usually results in a generic system that may not address the needs and requirements of a manufacturing business.
An ERP system that’s built specifically for manufacturing businesses will have features such as OEE tracking, Machine Integration, Order Suggestions and many more industry specific functions.
Can their system support or integrate with other Industry 4.0 technologies you plan to invest in?
Communication is the heart of business activities and if your technologies can’t talk to each other then it defeats the purpose of having a system.
ERP systems are the heart of a factory. As such, it needs to be able to consolidate data from major functionalities (e.g. Manufacturing, Finance, Purchasing, Sales, Warehousing) in the factory.
Does the vendor have long term plans to continue developing the system to keep pace with fast evolving technology?
Larger, more reputable companies will probably not have a problem to keep developing and improving on their software. But we also need to look at the frequency of updates and new features being put out as well as the direction of development for the product.
How can their system help you maintain or improve product quality and delivery times whilst maintaining a profit?
You will need to analyse your business processes, pain points, strengths and weaknesses. Through this analysis you should be able to identify the ideal state you wish to achieve after having a proper ERP system in place.
Once you have that sorted out, you can use these processes and requirements to ask for a demonstration of the system’s capabilities and see how it relates to the context of your business needs. This will help you gauge the suitability of the system for your business.
Does the system work out of the box or does it require tons of customization to achieve what you want?
Many times manufacturers are promised a magic bullet that will solve all their problems. They are often unpleasantly surprised later when they find out that they need another additional 4 modules to complete the system.
Sad but true, many ERP systems require a ton of customization before the manufacturer can have a complete system to run their factory with. This often translates to a lot of additional cost that is needed in order to “complete” the system.
The above 5 points are more practical questions you should ask any ERP salesman. Instead of focusing on technicalities, you should focus on finding out how the system you are looking to purchase can help you in your overall business operations and increase profits.
We hope we were able to shed some light on how to go about selecting an ERP system for your business. As with making any significant decision, remember to always do your research carefully and spend time getting a better understanding on how the system will match your operational requirements.
It would work to your advantage to request for a live demo so that you may also ask questions specific to your unique business environment and get answers from the consultant on the spot.
Once you have gathered the necessary information, run a few technical review meetings. If the need arises, reach out to the vendor to get more answers on possible questions that may arise from the meetings.
If you are looking for a full featured, fully integrated system for your manufacturing business, get in touch with us and we can schedule a demo of MONITOR G5 for you. We bring over 40 years of manufacturing experience to our customers, we don’t just sell ERP systems, we help customers adopt manufacturing best practices and grow their businesses together.