As a decision maker at a manufacturing company, you might already know that an ERP system can help streamline and improve your business operations. Maybe you’ve already deployed an ERP solution, and you’re looking for ways to stretch its powers further.
In a crowded market of specialized suites and glossy add-ons, how can you tell which ERP capabilities are most important? Our guide explains the basics, so you can choose the most important features for your business.
What’s an ERP solution?
Enterprise resource planning (ERP) is a type of business management software that’s built to manage, integrate, and automate business processes. With ERP, an entire company gains access to the same central database, so information can be shared securely in real time. That fast, efficient flow of data powers more streamlined workflows, flags inefficiencies, and spotlights opportunities for growth. It also cuts down on manual work, human error, and operational costs. For companies looking to leverage data to improve their performance and stay competitive in a crowded market, ERP systems have become an increasingly popular choice.
ERP systems can be sorted into several types, depending on their size and complexity. We’ll break them down here.
- Tier I ERP software is high-powered enough to handle globalization and localization functions, from currency to language. It’s typically used by multinational enterprises. Federal agencies often use a type of Tier I ERP that’s specialized for government operations.
- Tier II ERP is robust enough to support large enterprises without global reach. These systems can be used by independent companies, branches of larger enterprises, or by state and local governments.
- Tier III ERP usually caters to mid-sized companies in a specific niche or industry — like food manufacturing businesses, or businesses based in France. While its capabilities are limited, it’s generally equipped to handle multiple languages and currencies that share a single alphabet.
- Tier IV ERP systems are built for small businesses. They typically focus exclusively on finance and accounting, which form the backbone of more complex systems.
An ERP solution combines ERP software with a service partner who helps you get set up. In a widening world of ERP solutions, it’s important for companies to assess their options and choose one that’s right for them.
What are ERP modules?
An ERP system is made up of a number of different modules, one for each of a company’s core business areas. Each module, tailored for a different business area, works to manage, automate, and optimize workflows in that area. For example, a human resources module can streamline payroll and hiring, while supply chain modules support the smooth and secure flow of goods into customers’ hands.
Companies shopping for an ERP system can typically pick and choose the modules they need to support their business. Some ERP vendors offer a fixed set of modules; more often, they’ll present a core suite with optional add-ons.
Selecting the right package can be challenging. While feature-rich systems can be tempting, it’s important to avoid feature overload, which can add unnecessary noise and expense and slow the implementation process. On the other hand, it’s important that your chosen system has all the functionalities you need, or you may find yourself with the same struggles that led you to seek out ERP in the first place. In the next section, we’ll list the most important ERP features and modules for manufacturing businesses, and explain how they can help bring your mission to life.
Which ERP modules are best for manufacturing?
ERP was originally designed for manufacturing companies. While ERP systems have expanded in scope — often supported by machine learning and artificial intelligence — they can streamline and optimize manufacturing processes as powerfully as ever. Here, we’ve listed some of the most essential modules every manufacturing business should have in their ERP system.
Finance and Accounting
A finance and accounting module is the foundation of most ERP systems. These modules track, store, and analyze a company’s financial data — everything from accounts payable and receivable to the general ledger and forecasting. These modules are designed to help a company’s finance department close the books, speeding the process to reconcile and close out monthly financial statements. Depending on your system, your finance module might even handle complexities like tax management and revenue recognition.
Finance modules in more robust systems can handle multiple currencies and tax regulation for global enterprises. These modules can also serve external partners: they can safeguard financial records to deliver to shareholders, or produce financial statements for governing regulators.
Finally, these modules can serve an even larger purpose: financial planning. By pulling financial data from all teams and departments into a central hub for analysis, leaders can make more sound, informed decisions about how to use their company’s funds.
Customer Relationship Management (CRM)
Customer relationship management (CRM) modules spin all customer information — like contact details, billing information, and order history — into the system’s shared database. They track all customer interactions, assess customer satisfaction, and provide deeper insight into customers’ needs to boost future sales. By helping companies deliver on their promises, these modules serve to build trust between a business and its customers.
Manufacturing modules create efficiency in every step of the manufacturing flow, from sourcing raw materials to shipment tracking. With a good manufacturing module, you can closely monitor production and assembly, so any delays or inefficiencies can be spotted early and easily. These modules also offer shop-floor control, so you can directly track, schedule, and report on work in any of your company’s plants.
Reporting modules are essential for companies that want to take meaningful action on all the data collected by their system. Reporting modules transform piles of numbers into clear graphs and charts, with customizable dashboards that allow team members to focus on the information they need. Users can set access controls to make sure reports are viewed only by those who need them, enhancing security throughout the business.
Order processing modules automate the repetitive, tedious task of order processing. That saves time, reduces human error, and leaves employees’ hands free to pursue more meaningful work, which can lengthen their stay at the company. In an order processing module, a new order might instantly assess availability of the product, initiate a credit check on the customer, and adjust the distribution schedule. After the customer receives their order, the module sends an invoice — and feeds information back to the shared database for immediate use by other teams. The improved real-time ordering data generated by a module like this powers more nimble responses to customer needs.
What’s a cloud ERP solution?
The most common way for businesses to deploy ERP systems, especially in recent years, is through the cloud. With cloud ERP, ERP software is delivered over the internet, and team members can access it through a web browser.
A vendor, like Godlan, maintains the system and handles periodic updates, which takes the bulk of operational burden off a company’s hands. It’s less expensive, because it doesn’t require special hardware or specialized staff.
The alternative, on-premise ERP, is deployed in a physical office location. Because these systems usually take more time and money to set up and maintain, many companies are now upgrading their system to a cloud-based model.
Cloud ERP solutions deliver the best of ERP’s capabilities: adding automation, improving data analysis and reporting, boosting process visibility, and creating a smoother supply chain. For companies seeking to maximize the power of their ERP system, cloud-based deployment is usually the best choice.
What to look for in an ERP system
You might be considering adopting an ERP system for the first time, or upgrading the ERP system you already have. In either case, choosing the right system in a sea of competitors can be overwhelming. Here, we’ll list a few of the most important considerations, so you can prioritize based on your company’s needs.
- Features and functionality. The business case for any ERP system will include a projection of how your new system will benefit your business and improve your bottom line. You’ll need to make sure the capabilities of your ERP system align closely with your mission and goals. This guide, which breaks down the ERP modules most valuable to manufacturing companies, should help get you started.
- Reliability. ERP software should work predictably and smoothly. Choose an ERP system with a track record of success among businesses of a similar size to yours.
- Price. The cost of a solution depends not only on the vendor and type of system, but on the deployment method and your selected modules.
- Scalability. Can your chosen ERP solution keep up with your company’s expansion? Many systems allow you to adjust your tier or type of system to keep up with your growth.
- The right service partner. Complex ERP systems require a service partner to help you set it up. Generally, service partners are consulting services with robust knowledge of the industry. It’s important to choose a service partner you trust, so that your team transitions easily to new procedures, responsibilities, and roles.
What makes Godlan an expert ERP partner?
Godlan Consulting — and our ERP solution, Infor Syteline — offers fully customizable modules, so your system feels specifically suited to your company. With decades of experience partnering with manufacturing solutions as they launch successful ERP solutions, we’re prepared to help your system grow with your business.
We’d love to discuss how you can get the most from your ERP system. Contact Godlan Consulting to learn more.