Tag Archives: ERP Vendors

ERP Vendors and fixed pricing

All ERP systems are not created equally and neither are manufacturers. Some ERP vendors claim to include all costs up front to implement the ERP system into the manufacturers business as a fixed price model without knowing the specifics. Many do this in order to close the deal, make the sale. From my experience I have learned that Manufacturers are all different. Different people, different machines, different processes and different parts manufactured etc. Manufacturers need to be aware that most of the work and benefit is in the work and effort integrating the ERP system, defining processes and standards. Creating specific user guides and documenting processes is an added benefit coming from ERP implementations. Make sure to allow for ERP tuning in the original

ERP

ERP considerations

quote so you don’t get surprised when the ERP vendor says the request made is out of scope and a change request is required to make an amendment at additional cost to the original agreement.

 

Here is an example, a company designing and making blow molding tooling for plastic heating ducts for the automotive industry and producing parts vs a company designing and making tooling for electrical connectors, typical progressive stamping dies. Take note that the blow mold tooling is much smaller and more simple and the electrical connector stamping tooling manufacturing is more complex. Both require the ability to purchase standard components for tooling. However the design, processes to build and make parts is vastly different between the two. The electrical stamping tooling will have more complex processes, something we call outside services for example where parts need to leave the building for coatings or heat treating. There will also be a lot more pieces to purchase and manufacture for the stamping tooling.

How can an ERP vendor offer a fixed price for implementing a manufacturers ERP system. The work involved to implement a system for a blow molding company is vastly different from a stamping company. The knowledge to properly implement an ERP system resides within the skilled people in your organization and a skilled engineer from the ERP vendor. The time and effort to go through a detailed process analysis within a complex tooling manufacturer compared to a simple tooling vender differ vastly. During the implementation the processes within the organization will have to be altered to work within the ERP system. An ERP project leader will be appointed from within the manufacturer to co-ordinate efforts with the ERP Vendor. The ERP Vendor will deploy an Engineer to work onsite at your location. The ERP Vendor will educate your team on how the system works and provide recommendations on best practices once the Engineer understands your process. This goes above and beyond training. It could take several weeks to months for this process to happen. There is no magic silver bullet, what makes one manufacturer better than another is the time and effort put into making process better and more efficient, implementing systems better to produce the desired result. A manufacturer will get out of a system what they put into it. If not enough time is put into to take full advantage of the ERP system, why are you doing it? The purpose is to improve the efficiency of the business. Do it right and plan for it.

A 5 or 6 day course will show each user how to enter data into specific fields, what the fields mean and how to make a purchased item as opposed to a non purchased item. How to use the AR/AP module, the Purchasing module, the receiving module etc. What it will not get into is your business rules and standards. For example say it is important to generate a sales order within your organization that aligns with the Purchase Order received from the customer. These will be specific line items that can be invoiced against. This is a task you will most likely want to be able to do from within the ERP system. Depending on the complexity of your business this could take several days alone to iron out. Depending on the type and complexity of your business will decide how much time is required to properly implement an ERP system.

ERP systems have a lot of free form text fields, how a company decides to use these varies depending on the type of Business. For example it may be desirable to create a standard name for each type of item created. Some items can be used again and again on several BOM’s. Socket head cap screws are common purchased items that fall into this category. Some in various sizes and lengths. Create standard descriptive names. I used a very simple example here, this can be extended to parts that are manufactured or subcontracted. The employees within your company have the answers to these questions.

I have been involved in ERP implementations in the past from the side of the manufacturer and I can tell you if there is a fixed cost for implementing a system then there must be a catch. A good thorough implementation in a large complex organization will easily take 1 year or longer. A more simple smaller business, yes, can be done for less.

Implementing an ERP system for a software VAR selling Cisco for example, is something completely different than a custom build Manufacturer. So if the ERP vendor is trying to push a generic ERP system your way, be sure it is right for your type of business. Another good option is to talk to other Manufacturers using the ERP system you are about to buy. How does it work for them?

Another factor to consider is “go live” day. This is the day the system is turned on and is used to flow through each step of the business process. On “go live” day the vendor should have someone onsite for the entire week. Especially if it is a large complex tooling manufacturer. Each person throughout the process will need some time to ensure data is entered correctly and appears on the appropriate downstream users screen. For example, Engineers enter Items that are for product structures, someone these items get purchased, others get manufactured. The Purchaser needs to be able to clearly understand what is being purchase, Production control needs to understand what is being manufactured and assembled. Schedules and routings are made by production, items are routed to work centers for manufacturing. Hours on work enters are collected for costing. Material purchased needs to be received and placed into inventory. Accounting need to receive invoices. The people within your organization need to be walked through the process such that there is no impact to the operation of the business.

Be prepared and understand your business and what it really takes to implement an ERP system. The knowledge exists within the business to do it right, plan for it, what problems is the ERP system going to fix? Scheduling? Job Costing? Business continuity?

Author: Dave Collings, May 12 2016
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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 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

ProfitKey Continues Momentum at EASTEC 2013

Salem, NH – October 4, 2012 –

ProfitKey International LLC, a leader in providing ERP, MRP, and MES solutions to small and mid-sized manufacturing businesses for over 30 years, announced today that they will continue their marketing stride by exhibiting at the Society of Manufacturing Engineer’s (SME) EASTEC 2013.  From May 14-16 the Eastern States Exposition in West Springfield, MA will be the home of EASTEC 2013, a show held every two years designed to bring various manufacturing companies, experts, and students along the east coast together to network, discuss trends, and share knowledge, all for the betterment of the industry.  Continue reading

Software Manufacturers Use Social Networking To Increase Visibility

Software Manufacturers Use Social Networking To Increase Visibility

Working together is much better than not at all.

Marketing has rapidly changed over the past few years and every expert in and close to that field of employment will quickly agree. Today, specific for the manufacturing software sector, it is a particularly challenging task to take a brand (company) name from little to no name recognition and turn it into an industry standard.  While nothing is guaranteed, the new marketing tactics afford many new opportunities. Continue reading

Do I Need Software To Run My Business ?

Discrete Manufacturing ERP Software

Don't be overwhelmed by the idea of an ERP

Many business owners know right away when their current business module is failing them or is not enough to keep their business progressing.   Still, many will ask, as did most of our clients, whether or not they need a software management tool, or sometimes known in the manufacturing industry as an ERP (Enterprise Resource Planning) to help run their business or, in some cases, run their business for them.  This question is especially pressing if you are a small to midsized discrete manufacturing company. Continue reading

Are You Stuck With Your Current ERP Software Vendor?

Changing ERP Vendor

Are you stuck in the mud with your ERP?

Do you have constant headaches from the lack of communication between departments?  Are you experiencing stomach pains from constantly having to customize your current solution?  How about light-headedness from running around trying to figure out where bottlenecks are?  If so, then you might be in need of a new ERP remedy.

Our favorite line is “once our issues become major, then we will look into new solutions”.  Waiting can be, and usually is, more costly than completely moving to a new system.   Maybe you haven’t even considered looking into a new ERP system because it’s too much work, costs less to stick with what you have, and the fear that the implementation would be too disruptive to your business.  These are just a few of the misguided reasons we have heard over our 30+ year tenure.  Some of the issues may, in fact, be justified, but if you take a good, hard, and honest look, you just might end up saving a heck of a lot of time, money and frustration in the long run.

Time: No ERP change is done “overnight” and if anyone tells you they are playing on your fear of business disruption.  Working with the right ERP vendor you can have a good, solid implementation in around 90 days and, as long as you are committed to this process, it should not and will not shut your business down.

Cost: At First glance, a change over might seem like an insurmountable task, financially.  Re-investing in a new ERP solution might see too daunting for your budget.  In this case, I highly recommend thinking for the long-term.  Cost may be a factor for you, but the benefits of switching to a system that provides improved efficiencies will be well worth it in the end.  Imagine reducing production costs, increasing throughput and meeting on-time deliveries that your current system has been unable to provide.

However you look at the possibility of change, you need to weigh in multiple factors and think long-term, rather than in the now, because, if you wait too long some of the issues could become so big that it could even go as far as collapsing your business.  So, again, ask yourself are you really stuck with your current ERP vendor, or does it just seem that way?

Posted by Jason Rourke, Marketing Manager, ProfitKey International

The Daunting ERP Search: How Do You Find the Right Fit For YOU?

ERP Solution, software

In our previous blog, ERP Consultants, we started to address the overwhelming issue of an ERP system search.  Whether you have the extra cash flow to hire a consultant or, you are bold enough to start the in-depth search on your own, you will be faced with many inquiries that you will need to address from the very start of the process.  Continue reading