Tips & Tools

How to determine if your engineer-to-order company needs an ERP system

Total ETO

Running a custom-design manufacturing business requires executives and managers to effectively and properly allocate the company’s resources in an efficient and timely manner. Failure to do so may result in lost revenue and client cancellations.

 

One of the most effective ways to combat this misallocation of capital, time and materials is to implement a configurable enterprise resource planning solution. While an ERP system provides the necessary tools to create greater transparency and increased accountability, only a little more than a quarter of respondents to a recent industry study stated they used ERP systems. Speaking with Manufacturing.net, Sikich’s Jim Wagner expressed concern over the fact that so few manufacturers were taking advantage of this crucial digital software.

 

“The persistence of manual processes in the industry is troubling. Technology can help companies grow more efficient, lower costs and better serve customers. It has the potential to transform the industry and drive success, but companies need to make full use of it to realize gains” explained Wagner.

 

As global competition continues to increase, engineer-to-order manufacturers should not discount the many benefits an ERP solution provides for these companies. The following examples provide a starting point for manufacturers to determine whether they need an ERP system for their organizations.

Scaling opportunities

An engineer-to-order manufacturer that has no plans to rapidly scale up production might be content with its current resourcing situation. On the other hand, a company poised to quickly expand operations needs to have the tools in place to handle the drastic change the company may experience during this scaling process.

 

New workflows will need to be introduced for employees; the company’s supply chain may need to be expanded, with additional vendors brought into service and a greater volume of goods being built; but more importantly, the organization’s resource allocation will need to be overhauled – in some cases significantly – to cover an increase in revenue, overhead and orders that accompanies a major expansion. As noted by TGO Consulting, an ERP system brings an organizational value to a company that is extremely worthwhile.

 

“Even without immediate plans to scale, manufacturers can still benefit from an ERP system.”

However, even without an immediate plan to scale operations, it doesn’t mean the company won’t benefit from an ERP system. Often the biggest obstacle to business expansion is the lack of available resources necessary for scaling, whether that includes purchasing more material to build a greater number of products, hiring additional employees or dedicating money to a marketing campaign, among numerous other routes. But having a robust ERP system in place can potentially allow the engineer-to-order company to ensure current projects are on schedule and within scope. With this ability to drill down and get the granular data about the status of projects, there’s a greater chance of finding ways to cut costs and turn a profit, thus allowing the company to grow and succeed.

 

Too many spreadsheets currently in use

A company that needs to use several different spreadsheets to manage various aspects of operations may find itself having to use different stop-gap measures and other workarounds to conduct business. Is one spreadsheet used to track items ordered and another used to track receiving? Having to open one spreadsheet to read data, then convert the data to a different format to put it into a different spreadsheet and email it to a coworker, who then uploads it to his or her manager not only wastes time, but it opens the possibility for information corruption, mishandling or loss.

 

Custom-design manufacturers faced with any of these problems can benefit from implementing Total ETO, the only enterprise resource planning solution specifically designed for the engineer-to-order sector.

 

Learn more about Total ETO by requesting a demo today.

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