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How Small is Too Small for a Manufacturing ERP?

I hear it all the time. “We are too small for a an ERP”. But after a little due diligence I find most companies are exactly right for an ERP.

The problem stems from the mind set that the numbers of users or employees should drive the need. The reality is, if you are a small business you HAVE TO be faster and more nimble that your competitor. As a small business you less room for error. Which is exactly why you are not too small for an ERP, A Manufacturing ERP is a business tool to start you need to look at your business operations first and foremost to inform the best path.

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Most ERPs like Epicor are all encompassing with features for field service tracking, customer relationship management, website based collaboration, e-commerce and warranty tracking, and data interfaces with your largest customers. It is also important to note that ERPs use a single relational database management system complete with analysis tools and a dashboard. This is critical to get the right view into your business.

Modern ERPs come with better user interfaces, role-based access control for security reasons and are easily integrated with most business tools such as e-mail and Microsoft Word & Excel.

What does ERP bring to a small business?

Enterprise Resource Planning is an invaluable tool to small business. It give you the ability to look and run like a bigger business and the appearance of a bigger presence.

  • Invoices and reports appear professional and are likely to comply with the client’s preference.
  • Financial documents will comply with both the International Financial Reporting Standards (IFRS) and the
  • Generally Accepted Accounting Principles (GAAP). To this end, it helps prevent mishaps that could arise from incorrectly formatted documents
  • It helps with management of your inventory, expense reports and time sheets.
  • It can streamline a business allowing the business owner to concentrate on income generating aspects of the business.
  • A business owner can respond faster to changes in the market while making smart decisions.

What are the signs that you are not too small to need an ERP?

As soon as getting hard facts become a problem, the you need an ERP. When sales forecast are based on guess work rather than solid facts; when the business is struggling to keep up with an increasing volume of order information; when it becomes a problem finding out the amount of inventory in the warehouse, or if you are heavily dependent on excel spreadsheets it might be the right time to implement an ERP.

The top 3 signs that your business needs ERP are:

  1. The business has separate software for virtually every process – if the sales department is using one system to enter client orders as the accounting department uses another system for payables and receivables, something is not right. ERP software can integrate these systems so that they work from a single database.
  2. It takes longer than appropriate to access information – how long would it take to find information on the company’s sales margin or orders per day? Companies that rely on database that are reconciled and updated manually may take quite some time to access such information. ERPs enable business owners to have a holistic view of operations at any time.
  3. Accounting suddenly became a big problem – if employees in the accounting department spend many hours every week manually entering data from paper-based invoices into sales and accounting systems, you need ERP. Enterprise Resource Planning places all financials in one database for ease of data access and use.

ERPs for the manufacturing sector vary a lot. When shopping around for one, take time and choose a solution that meets your needs, fits your industry and is comfortable for your employees.

 

Also Read:

Time to Replace Your ERP