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Enterprise Resource Planning Systems centralize information and streamline processes of an entire organization. They work together with enterprise cloud integration services to streamline information in a cloud-based environment, where it is easy to save, access and retrieve from a single platform.
Despite these benefits, some shop owners are still hesitant about implementing ERP systems in their shops. They depend on diverse programs with decentralized information about processing, estimating, quoting, tracking and more.
Accurate information is crucial to making good business decisions, however, it’s inefficient to work with data stored in separate silos. If there’s nothing connecting these programs, you’re most likely making decisions that improve performance on a single department, but they might get in the way of other processes.
WHAT IS MANUFACTURING ERP SOFTWARE?
Manufacturing Enterprise Resource Planning Software is responsible for digitally integrating the different departments on the shop floor. It’s an effective way to centralize information for better planning, organizing and running of the shop.
Small to mid-size manufacturing companies use several programs to run their shop floor. The most common are:
MANUFACTURING EXECUTION SYSTEM (MES)
An MES tracks the product through its entire life cycle. From acquiring materials to delivering the final product to customers. Production lines need a manufacturing execution system to track products through the whole manufacturing process. Strict regulations require this system to have recall capabilities to trace potential product flaws and inefficiencies to their roots.
QUALITY MANAGEMENT SYSTEM (QMS)
Government regulators aren’t the only ones that require high product quality, the customers do as well. Understanding compliance and recording parameters decrease the risk of producing parts that are out of tolerance. QMS software handles documenting processes to follow specifications. It standardizes activities involving suppliers and machining operations required to make the parts.
When your business grows, flawed parts and processes can as well. QMS controls the quality of the output through specific instructions to meet production and customer standards. With this system, shops can operate without the hassle of dealing with as many non-conforming products.
COMPUTERIZED MAINTENANCE MANAGEMENT SYSTEM (CMMS)
A CMMS is a database of maintenance and calibration operations within a business. The system lets employees know exactly when to focus on maintenance and sends proactive alerts when maintenance of machinery or calibration of instruments is coming up to be due. It also manages work order schedules for maintenance activity so it can be scheduled in with customer jobs for the least impact. A CMMS can ensure machinery is well maintained, so as to reduce errors from delayed or unexpected maintenance activity.
TOOLING MANAGEMENT SYSTEM (TMS)
A TMS manages tooling availability so you can take work orders knowing you have the resources to produce them. The tools have to be in optimal conditions to perform at the required standards, and many of the machining operations require a rotating tool assembly, ideally measured with an offline tool presetter. In addition to tracking RTA’s the system generates reports to feed into procurement so that the correct tools, brands, and quantities will always be available when jobs are set up. This can help dramatically reduce setup time on CNC machines.
LEARNING MANAGEMENT SYSTEM (LMS)
Training is difficult when the market grows fast, new parts are produced, and inexperienced employees join the team. Tribal knowledge and best practices disappear with the retiring workforce. This system documents, tracks, reports and delivers information regarding the educational content available for employees. The need for reducing the employees’ learning curve to adapt faster into the operations makes this system effective at improving the shop’s performance through its workforce.
BUSINESS INTELLIGENCE (BI)
Business Intelligence generates data, analyzes and reports to provide insights to improve business performance based on benchmarks. It also helps in making operational and strategic decisions. Manufacturers benefit from its analytics, big data, machine learning, and artificial intelligence to gather vast amounts of information. It helps increase flexibility and visibility to reach business milestones by providing the data needed to make complex decisions.
It’s difficult to gather information and make decisions quickly when the data is spread among several programs. Manufacturers need to centralize information in order to track performance in every department and make decisions that are good for the business. Decentralized data management might seem appropriate because each department has its own challenges and areas of opportunity, but it makes a shop owner’s job harder when making company-wide decisions.
Paul Van Metre, Adion-Systems co-founder and vice president of sales, said, “ProShop represents ERP 4.0 or perhaps a Digital Manufacturing Ecosystem. It is a completely paperless, 100% electronic method of managing a facility’s business including shop floor monitoring, part quality inspection, work instructions and tool management, and doing it with a big data, manufacturing-analytics approach.” According to Van Metre, most conventional ERP systems are accounting-based with minimal functionality for managing and controlling the shop floor environment.
On the other hand, systems focused on manufacturing monitoring do not provide the full scope of information needed to guide optimal business strategies. Especially when decentralized systems generate isolated information that doesn’t cover the whole process. A change in a single department impacts others, thus affecting the quality, cost and time of production.
Isolated information isn’t enough for manufacturers in industries like aerospace and medical that require strict regulatory compliance like ISO and AS. Enterprise software systems help them operate at organizational levels. Reports, graphics, and parameters contain information about the whole process and not only about the performance of a single department.
HOW DOES ERP SOFTWARE WORK IN MANUFACTURING?
ERP software helps from the beginning of the manufacturing progress. You can generate estimates, record every part of the process and relationship you establish with previous and new customers. You can manage inventory, users, messaging and reporting to make sure the orders are exactly what your customers demand.
Aerospace manufacturing implements ERP software solutions because the industry is highly regulated and its rapid growth results in constant changes in the market. Having a rigid infrastructure pressures them to implement an ERP program to gain flexibility and allow for fast-paced growth. It makes cost control easier, simplifies compliance with AS9100 standards and enables strategic decision-making.
According to Computer Economics, World Wide Technology Trends Survey, 90% of medical manufacturing companies have ERP systems and it represents the highest investment in their business. In fact, medical and aerospace companies using ERP systems benefit from improved order fulfillment by planning with different scenarios to make sure they have the resources to serve the upcoming demand. It automates contract manufacturing to reduce manual tasks for employees and frees up time in other areas that require human intervention.
Manufacturers integrate ERP solutions to benefit in many departments at once. It’s not only about the customers, but also the employees.
ERP solves problems in manufacturing environments allowing them to:
SAVE TIME, MONEY AND ENERGY
It’s not about shrinking your workforce, but increasing productive work by reducing human error. Digital records of every process in the shop allow careful monitoring to avoid mistakes and fix them when they appear. Responding quickly to problems around the shop will allow employees to focus on their work without as many distractions so work orders get completed on time. ERP centralizes the information to pinpoint where the problem is, how to solve it and who can fix it. This way you won’t be spending unnecessary time on fixing inefficiencies during production caused by circumstantial events.
BECOME EFFICIENT TO SERVE CUSTOMERS
Automation lets you produce more parts in less time. Cutting cycle time lets you take more work orders at a time. ERP software reduces wasted time by making transitions smooth around the shop. Reducing human error in the manufacturing process makes employee’s production hours more efficient.
Ready-made templates in ERP systems produce a seamless workflow to turn estimates into quotes and purchase orders into work orders without taking much time from your employees.
GET UP-TO-THE MINUTE JOB STATUS
Knowing job status and delivering on time is difficult. True manufacturing ERP systems show you real-time data on jobs, machines, and staff so you can plan according to deadlines. It’s challenging to deliver on time when you don’t have real-time reports on the progress of your work orders. ERP software lets you follow every step of the process to plan accordingly. The data covers running machines and the ones that are about to start new jobs.
NEVER RUN OUT OF STOCK
It’s crucial to monitor inventory levels so you have enough supply to fulfill the company’s backlog. Orders will keep coming in whether you’re ready or not. You need to have the resources to do the job without falling into under or oversupply. ERP systems let you automate the purchasing process when your stock reaches the re-order level, so you never have to worry about turning away jobs due to lack of material.
Many details need to be considered when estimating and quoting new jobs. From the amount of labor needed to set up, inspect and manufacture each step of the router, to material and BOM costs, and overhead costs related to running the company. Some ERP systems don’t have enough categories to accurately represent the costs and places those costs will be incurred, so they are inherently less accurate. ProShop can very precisely estimate any cost category, including rolled-up costs across multiple level BOMs.
When re-estimating a job that has previously been run, an estimator should be able to retrieve all the previous job costs, labor reports and vendor PO summaries with a single click to help provide information on what adjustments need to be made.
ACCURATE JOB COSTING
Some work orders incur greater costs due to mistakes, not having the right tools or enough inventory to produce the parts. Because most jobs are fixed price, this cost affects your margins and can result in lower or even negative margins on your jobs.
ERP makes job costing more accurate and much faster with its centralized system. Reports and tracking functions will update costs according to the current workload. It tracks every dollar spent on work orders so you know exactly what costs have you incurred on them and their progress against production targets. Once a job has been shipped, a finalized job profitability report with detailed numbers for COGS as well as overhead costs is readily available and is sent to the appropriate employees for proactive review.
Manufacturing requires different departments to work together. If one department has a bottleneck, it affects the performance of the others. Each department has its own specialized software to generate reports and track progress, but having access to information from all departments with modern ERP solutions streamlines the entire shop to work more efficiently.
ProShop typically replaces 3 to 5 software systems. It’s daunting to change your shop’s digital infrastructure. However, shop floors are becoming Digital Manufacturing Environments relying on fewer systems to plan, track, control and execute procedures. ProShop’s Digital Manufacturing Ecosystem (DME) makes it easy to find, access, analyze, compare and make decisions from a single system. This represents a considerable improvement in manufacturing management because most shops are looking for a modern ERP software that acts as an all-in-one solution instead of using multiple programs with their own formats and styles that don’t properly communicate with each other.
Cloud ERP creates a paperless environment. This means your team can finally stop chasing spreadsheets. It creates real-time reports so every employee knows what’s next, which reduces wasted time. It’s important to have a real-time production ecosystem where employees access the most recent instructions to carry out their jobs. It reduces the risk of working with old work instructions that may have the wrong specifications because the work instructions will constantly be updated in a digital environment.
If a problem arises with your computer, you can log in from another device because the information is saved on the cloud. Digitizing involves migrating from information silos to networks, achieving a unified manufacturing environment.
HAVE INVENTORY ALWAYS ON POINT
ERP systems ensure inventory is always available to carry out jobs. This helps verify you don’t incur unexpected inventory costs that drain your cash flow. As you receive work orders, the business should keep a steady pace to serve all customers on time and comply with their standards. Working with inadequate inventory levels can delay work orders. It makes it harder to please your most important customers because you have to reprioritize the delayed orders.
NURTURE RELATIONSHIPS WITH CUSTOMERS
ERP goes beyond Customer Relationship Management (CRM). We all know how frustrating it is to have a slow turnaround for our customers, especially when our tools aren’t available, machines are in repair or we’re simply struggling to deliver to important customers due to mistakes we could’ve spotted and fixed quickly.
CRM modules track every job you’ve done for previous customers and the new business relationships you’re establishing. Details from every job are recorded in order to quote, plan, execute and deliver according to each customer’s needs. ERP systems let you record special requests from customers. Then, when the next work order enters into your system, you’ll know how the work orders need to be customized for each customer.
CONSTANT BUSINESS CHECKUPS
ERP platforms allow you to increase your shop’s awareness. The centralized information lets you spot and fix problems quickly. It will notify your team when maintenance is needed to reduce downtime and keep production at peak levels, or if a job is going over its time and cost budgets. Its visibility into the whole process improves your tracking capabilities to make sure the shop is working as expected.
IMPLEMENTING ERP INTO YOUR SHOP IS A GAME-CHANGING DECISION
Some shop owners are often afraid to take the leap to a modern ERP system because they want to maintain the status quo in the company. They’re afraid their employees won’t be able to adapt. Proper ERP execution makes the transition smooth for businesses.
“I’ve worked in several different production ERP platforms over my career in aerospace manufacturing and I can attest to ProShop’s capabilities and completeness as a production/purchasing integrated platform. Yes, there are other software programs available that perform some manufacturing administrative functions as well. However, as an overall vertically and horizontally integrated platform, nothing I’ve seen compares to ProShop in how broad and integrated it is to the whole company.” – Bruce, Senior Buyer.
Integrating ERP solutions into your shop is not as difficult as it sounds. ProShop takes you step by step through all the modules of its ERP system to ensure a successful integration. From estimates, quotes and work orders to tracking the performance of your business.
The ERP software provides training to get your shop up and running with this new integration. Its visual digital work instructions help your employees learn through videos, images and detailed instructions so they can learn while they work. Our commitment to helping clients implement ProShop ERP into their shops is evident to our clients, who tell us things like this:
“I’ve never had software support like that. Where they’re basically, logging in, putting in the time, truly caring about what you’re trying to do. And make it as easy as possible, to change one of the most difficult things you can do in a machine shop, switching ERP software.”
Hear a customer firsthand in this video.
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