ERP

ROI with ERP

ROI with ERP

This is a common question that arises with many Small Medium Businesses. How do you know what the ROI will be? Are the ROI calculators provided by some ERP vendors accurate? Small manufacturers processes vary from business to business depending on the type of manufacturing being performed. So a generic calculator will not capture the uniqueness of your business or processes. In a large manufacturer such as an automobile manufacturer (like GM) it is more appropriate. Larger business have the resources to allocate to determine ROI, there are thousands people who interact with the ERP system. In a smaller business it could be 100 or fewer people interacting. The smaller business's are focused on a small manufacturing sector, it could be supplying tooling or supplying parts to the bigger automotive manufacturer. Most small business do not have the resources to perform detailed ROI calculations. If you are new to ERP systems, to calculate the ROI will be very different from a business that has an established ERP systems. Here are some functions that will be of benefit to your business by introducing an ERP system: Reduced level of inventory through improved planning, purchasing and control. Improved production efficiency which minimizes shortages and interruptions. Reduced materials cost through improved procurement and payment protocols. Reduced labor cost through better allocation of staff and reduced overtime. Increased sales revenue, driven by better managed customer relationships. Reduced regulatory compliance costs. Provide business wide reports, job costing, WIP to name a few. These functions automate many of the manual processes which reside in the business. Many small manufacturing business do not perform an ROI as they don’t know where to begin. Lets look at purchasing as an example. If items are being purchase for production tooling and it takes several months to build the tool, it doesn’t make sense to purchase all the material at the start of the project. It is better to purchase material as required, such that spending is regulated and inventory is kept to a minimum. This process can be done manually or it can be automated by an ERP system. If several large complex tool builds are going on at the same time it will take a lot more resources to perform this task manually than automating it in an ERP System. It is possible to calculate the ROI but it will take some effort and the person performing that calculation needs to be familiar with the manual purchasing process to determine how much effort it will take. The ERP vendor will be able to demonstrate the automated method and the time savings could be calculated. This would be a time-consuming exercise and will vary by the type of manufacturing performed. It is possible that by the end of the exercise it will be determined than 1 person can perform the purchasing using an ERP system and 2 people are required to perform the task manually. This would be a savings of resources which can directly relate to money saved and be applied to an ROI by implementing an ERP system. This could be done for each business function to show savings. This exercise will take several weeks to perform, hence the reason many small businesses don’t invest in the effort. A detailed demonstration will show them the time savings. For a small business it is very important to have all the key people involved in the ERP purchasing process as they will be able to see the benefits. A good practice is to state why you want an ERP system. What is the business problem you are trying to solve. Then by implementing an ERP system you are solving a business problem or limitation. Thus improving the overall functionality of the business. It is easier to show ROI in this case. Perhaps looking at it from a different perspective, every month you delay putting in or evaluating an ERP system is leaving real money on the table. Without a system to automate business process, automate report generation, drive revenue, and reduce operating cost, is wasteful. Personally I could not imagine not having an ERP system to manage business operations. Dave Collings Founder at Do IT Lean www.doitlean.ca
NTMA

NTMA (National Tooling and Machining Association) Welcomes ProfitKey International As A National Member

ProfitKey International Joins NTMA (National Tooling and Machining Association) As A Sponsoring National Member

Salem, NH, April 28, 2013 - ProfitKey International, a leader in ERP software for small to mid-sized manufacturers for over 30 years, has joined the NTMA family as a national member. Continue reading

ProfitKey’s ERP For Project-based Manufacturing Is Now TEC Certified (A guest blog)

Written by Aleksey Osintsev (see bio), Courtesy of Technology Evaluations Center (TEC) TEC is pleased to announce that Rapid Response Manufacturing (RRM) software from ProfitKey International, a developer of enterprise resource planning (ERP) software for manufacturing, has been TEC certified for online evaluation in TEC’s ERP Evaluation Center. An in-depth demonstration of its capabilities was conducted in order to evaluate how RRM holds up to industry benchmarks. We saw the system in real time and assessed its performance on requested tasks and its workflow capabilities. We tried out the system’s navigation along with selected features and functions. Continue reading

ERP Management Implementation Tips Every Manufacturer Should Know (Part 5 of 5)

You’re almost there!  You’ve run the gauntlet of researching various ERP vendors, carefully selected your implementation team and personnel (part 1), conducted a workflow review (part 2) of your current system, while planning for the new system (part 3), and transferred all of your key data to populate the new and improved system (part 4).  The ERP vendor has left your facility and you now bear a heavy responsibility to ensure this implementation continues to be a success for your manufacturing company.  Fear not, if you are working with a trusted vendor, they will never truly leave your side.  Here are some key tips to remember post-implementation. Continue reading

ERP Management Implementation Tips Every Manufacturer Should Know (Part 4 of 5)

When we started our blog series on 'ERP Management Implementation Tips Every Manufacturer Should Know', we originally had four installations in mind.  Nearing the end of the series, we realized we didn't want to leave you hanging post-implementation and make sure we had covered enough for you to be comfortable even after the conclusion of this blog series, just as you should feel in post-implementation.
ERP Management Implementation Should Not Be Like Ripping Our Your Hair

Preparing Your Data Should Not Be Like Ripping Out Your Own Hair

Thus far, we have covered your implementation team (part 1), a complete workflow review (part 2), and installation and training (part 3).  This fourth installment will take a deep look into your current database and what to expect to prepare to ensure your data has legs and can be effective right out of the gate. Continue reading

ERP Empowering Manufacturers to Deliver Quality Products On-Time

RReal-Time ERP Function Areaseal-time is a commonly used yet loosely defined buzz word in the manufacturing industry.  As a manufacturer, what does real-time mean to me and how is information flowing through my shop floor to the front office?   What does this mean in terms of ERP (enterprise resource planning) solutions and what does it take to be considered a real-time solution? More importantly, why would I need this?  For this article, we shall define an ERP system with real-time capabilities to mean that the ERP system has the ability to update information throughout the system and across your company as the new information is entered instantaneously.  Following the definition, an explanation into the benefits of real-time capability and the specific areas of a system where real-time is impactful will be provided.  Continue reading

To SaaS or Not to Saas. Not to SaaS, For Now

Cloud ERP

Think Before You Leap Into The Cloud

Industry Week recently published an article by Pete Zeppell, VP of Zilliant, ‘To Saas or Not to SaaS’ . The article spoke about the top five key reasons why people should make the shift to a SaaS, or cloud, model for their business performance software.  While I don’t believe the article was intended to address all manufacturing verticals, it did take a general approach where people in small to mid-sized manufacturing companies could get the wrong impression.  The purpose of this blog article is not to discredit Mr. Zeppell’s, but rather to address those philosophies as if they were speaking about ERP (enterprise resource planning) software directly.  Continue reading

ERP Management Implementation Tips Every Manufacturer Should Know (Part 3 of 4)

ERP Implementation TrainingIn the first segment of our 'Your ERP Implementation' series, we discussed initial steps, procedures, and introduced a philosophy for a core implementation team.  In the second, we examined the crucial aspect of a work-flow review, which then lead into installation and training.  In this new segment, we will take our newly found knowledge to refine a honed implementation plan, based on specific structures, needs, and requirements, to ensure best results throughout the ERP project. Continue reading

Tips To Help Balance Manufacturing Supply and Demand With ERP

Manufacturing Supply and demanWith the Presidential election just a few mere weeks away, there are a lot of rumors about what is to come in the manufacturing industry.  Will there be significant change, funds added, or funds cut, especially in the aerospace and defense industries? Many manufacturers have spoken out, including customers and prospects of ours, who are genuinely worried and have cut back on certain expenditures in order to minimize risk for 2013.  With that said, the one trend which remains true is, regardless of what happens in the marketplace, more and more manufacturers are realizing that in order to continue growing and competing at a high level, they need a manufacturing system in place to help with their visibility on their shop floor through the front office and to increase quality, on-time delivery, and cash flow, amongst many other areas. Continue reading

Boy Scout Uses Manufacturing Software To “Be Prepared” For Eagle Scouts – The Finale

Eagle Scout Uses Manufacturing ERP SoftwareWhen we last left the story of my son, Owen, who was working toward his Eagle Scout rank in Boy Scouts , almost a year ago, Owen had just finished the biggest piece of the Eagle Scout rank, the Service Project.  His project was to build a walkway for our local church, to provide a safe and stable walking surface for employees and visitors to the church offices.  With the help of ProfitKey’s ERP (enterprise resource planning software) manufacturing software, Owen completed his project and earned the prestigious rank of Eagle Scout.   Continue reading