Here are the top four mistakes companies can make when searching MRP/ERP software.
– By Karl Lauri
Enterprise resource planning (ERP) software, sometimes called MRP when designed for and used in a manufacturing setting, can be complex and comes in a variety of sizes and flavors. Choosing the best solution is one that senior management wrestles with, especially within small and mid-sized companies, which are less likely to have the resources to tweak the software to their unique specifications. The payoff is too great for a growing number of companies to pass up. ERP (or MRP) offers the opportunity for information to be shared across departments company-wide, and to better manage the manufacturing and supply chain, allowing for more efficient and smarter operations.
Complicating matters is that referrals (and great reviews) can be misleading at times. The best software for one company may be wrong for another. MRPeasy, as one of the leading providers of MRP software to small and mid-sized manufacturing companies, has participated in the selection process with hundreds of companies, and has seen it done correctly, and incorrectly.
Below, MRPeasy has listed the four biggest mistakes small to mid-sized manufacturing companies make when selecting MRP/ERP software:
1. Don’t shop until you drop – Many companies make the mistake of sitting through too many demonstrations without actually testing the software. It’s like buying running shoes: Without trying them on, it’s impossible to know if they are comfortable, and if they meet your needs. With this approach, typically the most expensive solution looks best. Or it’s the solution that meets the pressing need of the day. Today’s urgent need may be tomorrow’s afterthought.
2. Software not a magic bullet – Some executives get fixated on purchasing software (“My company needs software”) vs. making a strategic purchase (“My company has problems A, B and C, and must fix these.”) They view software as the way to solve any – at least most – issues without prioritizing the areas they need the solution to address.
3. Don’t start the search without commitment – Searching for something as important as an ERP/MRP system requires an investment of time and energy; don’t start the process if you don’t have a team committed to seeing search and purchase through. Companies might have realistic timelines, clearly mapped out and prioritized requirements, a budget and a project team, but if project managers do not have dedicated time – minimally 10 to 20 hours per week – for this project for two to three months, it’s not realistic to succeed.
4. Right job, wrong person: Manufacturing managers are way too busy to lead the MRP/ERP research, right? Well, when a company gives the job to the office manager, accountant, assistant or intern, the same manager will be wasting time down the road. In their daily jobs, these other folks have little contact with manufacturing issues. Therefore, they lack first-hand experience and may have a distorted understanding of the pain points.
Here is how you can fix your operations from making those four mistakes:
1. Try before you buy – Try on the MRP/ERP system and go for a short run to know if it is for your company. Many ERP/MRP software packages offer easy-to-access, live demo systems, which can be tested with simple tasks to figure out how and if the solution actually works best for your company. Talk to folks throughout the organization to better understand issues and challenges and where sharing information across departments might be most beneficial.
2. Audit, assess and analyze– Before the start of the ERP/MRP search process, take a long, critical look at the company to map out the issues in the supply chain and manufacturing areas, and make a wish list of what the potential solution would address. Analyze possible solutions and prioritize software system requirements through this lens.
3. Budget is not enough – To successfully purchase an ERP/MRP system, companies need more than just a healthy budget. They need time and staff dedicated to the project. Set aside a certain amount of time for everyone involved to make things happen. De-prioritize other projects – this is project number one – or it’ll bleed out slowly and fail.
4. You use it, you choose it – Those who will be using – and benefitting from – the ERP/MRP software should have a hands-on role in searching and testing. We recommend a project leader who is knowledgeable in the firm’s manufacturing and organizational processes. Preferably, this person has previous experience with MRP systems and is personally invested in improvements.
Karl Lauri is the managing team member at MRPeasy (www.mrpeasy.com). He can be reached at email@example.com.