There is a lot to consider
Decision makers have to look at a wide range of possible features, understand how much each one might benefit the organization and then see what is feasible under the current budget. It is essential to be diligent during each of these steps, given the rates of failure and uncertainty about ERP project success – Panorama pegged them at 7 percent and 36 percent, respectively, in its 2016 report.
What features should custom design manufacturers focus on as they evaluate ERP | MRP solutions? Here are a few of the important ones:
1) Engineering – Dynamic and Nested BOMs
The heart of every ETO (engineer to order) organization is engineering. Engineering needs in an engineer to order organization is vastly different than any other type of organization, including the similar but different MTO (make to order) industry. It’s important that the ERP | MRP support a nested and dynamic BOM (bill of materials). This cannot be understated. The dynamically changing nature of custom design manufacturing makes this requirement compulsory. Without this functionality, implementation cannot be successful.
2) CAD Integration
Where would your BOM be without CAD integrations? Most of your BOM is designed by your engineers in your various 3D and electrical CAD systems, such as SolidWorks, Catia, Creo, Inventor, AutoCAD Electrical, EPlan and SolidEdge. Integration with your various CAD systems is key to picking the correct ERP | MRP system to avoid data duplication.
3) Procurement\Purchasing link from Engineering
Project designs at ETO organizations change, and they change very frequently. They change due to challenges in manufacturing, material sourcing issues and change requirements from clients. Manging the procurement of these parts and materials in an ever changing world is incredibly time consuming and prone to errors without a system designed to handle this.
Long lead items need to be communicated early to purchasing. The system must also have a way of allowing partial releases of your BOM to purchasing, so that you don’t end up with an avalanche of parts to buy once engineering has finally signed off. Time is a buyer’s best friend to ensure they have the best pricing and delivery possible for required materials.
4) Real time job costing
Custom design job shops need to know as soon as possible what they can expect for material costs. This means “preliminary costing” – as the designs are being completed before you have even ordered your materials. This means “committed costing” – as soon as you materials are ordered and labor is incurred. And this means Actual costing. Most systems are good at Actual costing, but very few can provide committed costing, and even fewer can provide preliminary costing. It is crucial to know at the design stage what your project’s material costs are looking like. At this stage, it’s possible to redesign and even renegotiate with your customers. Knowing the cost at the Actual stage is too late.
If your materials arrive late, your project will ship late. If your materials don’t arrive at all, you can’t ship at all. It’s imperative to keep on top of open orders, ensuring vendors are committed to delivering the materials you need, when you need them.
6) Everything else
The top 5 are the most significant features to look for in an ERP | MRP system for engineer-to-order manufacturing organizations. But this is far from a complete list. The system needs to have all major functions covered to help your business grow to the next level. Functions like Sales and Prospecting, Spares and Parts Orders, Change Orders, Non Conformance Reporting, Shipment and Packing Slip tracking, Fabrications\Work Order tracking, Accounts Payable, Accounts Receivable, Time tracking, Receiving, Quality Inspections, Various Reporting and the list goes on.
Historical data should be immediately available whenever needed to allow you to save time and costs by reusing previous designs and preventing previous mistakes in the event of similar future jobs.
Managers should be able to pull data for forecasting upcoming material costs, examine and produce reports that help evaluate all the key aspects of the business.
The system should fit your business needs today, and going forward as you grow. The system should flow with your business, and not make you adapt to fit the software. Highly specialized systems do just that, and in turn, they reduce implementation and training costs because they are intuitive to your business and easy to work with.
Total ETO is the only ERP | MRP platform built by and exclusively for ETO manufacturers. Affordable, easy to implement and highly automated, it helps engineer to order manufacturers scale their businesses while reducing inefficiencies that otherwise drive up costs and delay project delivery. An automated software agent even helps avoid the setup issues that beset many other ERP systems.
Total ETO has everything listed above, and a whole lot more! Learn more about Total ETO by requesting a demo today!