A good manufacturing software system will help you identify ALL of your costs associated with manufacturing a specific product and weed out those loosers?. Can you afford not to buy?[r]
Trang 1How to Choose an
ERP System for Process Manufacturing
ProcessPro
software
R
Trang 2About this Booklet
We’ve structured this booklet to deliver useful information to:
T Companies that are managing their manufacturing
manually and want to automate
T Companies that have entry-level software and
want to upgrade
T Companies that are using old systems and seek
new technology
This booklet distills what we’ve learned from our many successful customers into an overview that helps get you started.
Why would a manufacturing software company write
a booklet that does not promote its own software? Because we’ve discovered that the more people know about manufacturing software, the more likely they are to choose ProcessPro software An informed customer usually ends up being our customer, so we’ve got a vested interest in sharing this information with you.
Questions or Comments?
Please contact ProcessPro:
Phone: 800/457-3548 Fax: 320/252-1144 Email: info@ProcessProMFG.com Web: www.ProcessProMFG.com
We hope to hear from you!
Copyright (c) 2001 Blaschko Computers
Inc.dba EMR Innovations Copyright (c) 2001
ACCPAC International, Inc Portions
copyright (c) 2001 Lahey Software.
Trang 3The simple test below will tell you
just how ready your company is to
adopt a new manufacturing
system
1 Does your company currently
use Bills of Material (BOMs)
VYes Go to question 2.
VNo Stop.
Most manufacturing companies
rely on BOMs to drive their
material requirements If you
answered “no” to this question
you probably are not in the market
for manufacturing software;
instead, a job shop package may
be what you need Check with
your local consultant for more info
on available job shop solutions
2 Does your company currently
have some kind of manufacturing
software in place?
VYes Go to question 3.
VNo Stop Your company is
an ideal candidate for a new
manufacturing system You face a
serious competitive threat from
other companies that are reaping
the benefits of manufacturing
software systems Read the rest of
this guide and get started on an
implementation plan today
3 Have governmental
regulations increased beyond
your current system’s
functionality?
VYes Stop Your company is
an ideal candidate for a new
manufacturing system You need
to invest in a software whose
vendor is dedicated to keeping up
with industry and government
regualtions
VNo Go to question 4.
4 Does your manufacturing software integrate seamlessly with your accounting software?
VYes Go to question 5.
VNo Go to question 7.
5 Is your manufacturing software more than three years old?
VYes Go to question 6.
VNo Stop If your integrated
system was chosen carefully within the last three years, it should be serving your purposes just fine Before proceeding with a new purchase decision, discuss your situation with the consultant who helped you implement your current system
6 Is there a satisfactory upgrade path available from your current software supplier?
VYes Stop Contact your
software vendor to find out more about upgrading your system right away
VNo Stop Your company is
an ideal candidate for a new manufacturing system You need
to find a new supplier with a more serious commitment to ongoing product development Now is a good time to take a look at the products available in today’s market
7 Is your accounting software more than three years old?
VYes Stop Your company is
an ideal candidate for a new manufacturing software system
Without full integration of your manufacturing and financial systems, you won’t get the full benefits of computerization
Finger pointing and frustration will rule the day Be sure to consider only those packages that can demonstrate full integration
VNo Go to question 8.
Should your company buy manufacturing software?
1
8 Is your manufacturing software a home-grown package invented or developed by your internal programming/MIS staff?
VYes Stop You are an ideal
candidate for a new manufacturing software system Your system was probably developed years ago, before there were many excellent software packages for the process manufacturing industry Be prepared for a little extra effort, because your internal group may oppose a packaged solution not developed internally
VNo Stop Your company is
an ideal candidate for a new manufacturing software system Your old accounting system and non-integrated manufacturing package are begging to be retired The benefit of harnessing new technology can pay big dividends The earlier you get started on an upgrade and conversion plan, the sooner you will see results
Trang 4Can you afford to buy?
2
The benefits of implementing a
manufacturing system are
well-known and well documented But
it is still difficult to persuade the
management of your company to
part with hard-earned profits for
the new system you’re proposing
Consider preparing a return on
investment (ROI) analysis to help
your company decide how much
to pay for the new system Start
by categorizing your costs
Software costs:
These include software purchase
or lease, maintenance fees, add-on
products or packages required to
adapt the systems to your needs
Costs range from $35K - $100K
for purchase, and approximately
18% of the purchase price as an
annual maintenance contract
Hardware costs:
These include computers, components, networks, and printers Costs can be difficult to project until you make your software selection You probably already have most of the hardware you will need, but you may need
to upgrade servers or storage to accommodate the new system
Consulting costs:
You’ll want to use a qualified consultant to help you select and plan your system implementation
See section 7 for tips on choosing
a qualified consultant Fees vary regionally and depend
substantially on your desire to
“do-it-yourself” or delegate excess work to an expert
Overtime costs:
During implementation, you and your staff will have more work than usual You may have to hire
a temp to handle some administrative tasks or ask for some overtime from your employees
Training costs:
You will need training to get people up and running on the new system Good training is a logical investment in the success of the project Training costs are lower than ever thanks to Internet
“virtual” classrooms that reduce travel time and fit education into busy schedules
If you are adding up costs right
now, they may seem huge But to
complete your ROI calculation,
you’ll need to add up the savings
your system delivers Results vary
dramatically from one company to
another, depending on objectives
and work styles But a good
system definitely delivers
significant cost savings
Reduced inventory shrinkage
With the right package and
improved accountability, a good
system helps you keep track of
inventory and prevent losses As a
result, more of your purchased
inventory ends up in finished
goods
Reduced costs of goods through improved purchasing
With improved forecasting, you’ll
be able to plan your buying to avoid peak pricing, rush charges, and small orders Depending on the products typically purchased, a company can save up to 10% or more, rush charges can be cut by
up to 90% and shipping costs can
be lowered by 10%-50% or more
Lower costs may also result in improved payment history for your company’s credit report
Reduce labor costs
With better scheduling and more accessible data, you’ll need fewer people to get the same work done
Often a new system can completely eliminate some administrative costs, while bringing overtime labor into check
by improving schedules
How would your company do?
Calculate your own return on investment by adding up your savings and dividing it by your estimated costs You may be amazed to learn that many companies find that a new manufacturing system pays for itself in a matter of months
Accurate Costing for each finished good.
Are you selling products that do not give you an acceptable margin
or cause you to lose money? A good manufacturing software system will help you identify ALL
of your costs associated with manufacturing a specific product and weed out those loosers
Can you afford not to buy?
3
Trang 5One way of determining if you
can afford a new system is to
determine if you can afford not
to The following questions
should be used to reflect on the
current efficiency of your
operation and the increased
efficiency and productivity an
automated manufacturing
system could bring
What would it be worth if
• Your production team was
notified several times daily
when customer orders needed
to be made? Or when stock
orders were needed?
• Orders suggested by the
system, with a click, could be
automatically turned into batch
tickets after being reviewed?
• Shipping labels and
product labels were
automatically produced when
batch tickets were approved?
• Your purchasing staff was
notified several times daily of
materials needed for custom
orders?
• Your Quality Control staff
was automatically notified
when a batch or raw material
needed to be tested?
• Your batch tickets could be
pulled up on display and easily
modified or raw materials
could easily be posted,
updating inventory, tracking lot
numbers, and creating an audit
trail?
• Your Quality Control tests
were recorded to automatically
release a lot from quarantine
and later produce a Certificate
of Analysis (COA)?
• Your shipping department automatically received a printed COA, MSDS, or Bill of Lading when needed at the point of shipping?
• Your financial staff could refresh the standard costs or estimated costs of all manufactured items in your inventory?
• Your Plant Manager could track the detailed costs of all the past work orders to identify any material or labor problems?
• Your inventory levels were reduced because of more accurate inventory management data?
• Your customer could enter their own orders and check the order status or product
availability over the Internet?
• Your sales reps had a Contact Management system that had instant access to your customers’ sales history?
• Your sales representives could automatically fax and e-mail documents to customers
or members of your team?
Can you afford not to buy? (con’t) Telltale signs you
could increase your efficiency
Redundant entries or manual systems will certainly affect your efficiency and productivity Use the questions below to reflect on the loss of productivity you may
be experiencing:
• Duplicate inventory files
• Many steps to complete batch tickets
• No data accessibility for custom reports and inquires
• Records lock when accessed
by more than one user
• Restrictions in closing periods
• Many unintegrated spreadsheets
• Decimal places limited in BOM
• Nearly impossible to void or redo a transaction
Do you have 100% faith in your system?
• Do you experience loss in production controls, such as errors in batch tickets that cause errors in production?
• Do you experience loss in quality controls, such as errors
or emissions in testing procedure, causing errors in product
quality?
• Can your system process recalls?
• Do you experience regulatory violations?
• Does your system provide tools to recognize and analyze cost overruns?
• How secure is your data?
• How confident are you in your data integrity?
Trang 6Every company is different.
4
If you have worked at more than
one manufacturing company, you
know that each one is different
Different processes, different
tracking systems, different
problems all of these differences
add up to the fact that you’ll need
a system tailored to your specific
needs
Discrete Manufacturers
Discrete manufacturers make the
same product over and over again,
at times with variations such as
color, size, or options The
discrete manufacturer depends
heavily on forecasts to purchase
raw materials at the right time and
cost
Process Manufacturers
These companies produce batches
of formulas and have highly
controlled processes Estimating
required materials and finished
goods is complex They may
produce the same product over
and over again, or they may mix
custom batches on a project basis
Job Shop Manufacturers
These manufacturers rarely make
the same item product over again
The job shop manufacturers will
assign material costs and labor
costs in an unpredictable and
nonrepetitive manner
Distributors
Distributors (or assembly
manufacturers) create products by
assembling or grouping
components purchased from other
manufacturers This may be as
simple as repackaging parts
(kitting) or very basic assembly
Because so little assembly is
required, distributors have little
requirements for extensive
assembly planning or work flow
management
Manufacturing needs by company type
Discrete Process Distributor Job Shop
Batch Scaleability x
Manufacturing instructions x
Volume/weight unit
of measure conversions x
Packaging Instructions x
GMP & 21 CFR
In-process QC testing x
Lot Tracking of Mixtures x
Detailed QC auditing
Bill of Lading for hazardous materials x
* This depends on the nature of your business While some job shop manufacturers will need these features, others will not.
Trang 7Driving the decision.
5
The decision making process
should involve people from all
levels of the organization at
different times Movement for the
change must come from the top;
then middle management is
charted with final implementation
with the support of a top-level
project champion
Consultant Task
Top Management Task
Mid-Management Task
Assessment Education Objectives
Cost/Benefit Analysis
Commit to Implement
Assign Project Champion
Software Review
Consultant Review Interviews
Reference Checks
Product Feature Review
Product Demos
Department Functional Lead
Department Functional Lead
Selection of top 2-3 packages
Selection of top 1-2 consultants
Final Approval Consultant &
Software
Implementation
Departmental Teams
Project Champion Project
Consultant
Trang 8Questions to ask your software supplier.
6
As you narrow the field of
software contenders, you’ll begin
examining the companies more
closely to see how well they meet
your needs Consider asking these
questions to eliminate vendors that
will not fit with your long-term
strategy for manufacturing
excellence
Are the standard accounting
modules available for this
package?
Look for General Ledger,
Accounts Payable, Accounts
Receivable, Purchase Orders,
Sales Orders, and a very strong
Inventory Control module as a
minimum set
Does the manufacturing
application address your specific
needs?
Process manufacturers should look
for strong BOMs, Quality Control,
and Lot Tracking
Do the accounting and
manufacturing modules integrate
completely?
Seeing a product demo may be
your only way of assessing the
level of integration Check to see
that the BOM has solid integration
with Inventory Control and Sales
Orders You should be able to
maintain inventory items while
defining BOMs, and configure
orders based on BOMs during
order entry
In addition to working well
together, do the software
applications work in real-time?
It is important that you and the
consultant or VAR with whom you
are working are speaking the same
language Make sure that when
you discuss such items as
complete integration, ERP, and real time, your definitions are similar If
a program promises up-to-date information and you require real-time updates, it is best to dig a little deeper Up-to-date can mean anything through the close of a quarter, a month end, a work week, a business day, an hour’s time, sixty seconds, or instant by instant If a system promises real-time delivery, make sure that vital business information (such as inventory counts for example) is
in fact updated as new data is entered instead of on a batch basis
How does the system handle data collection?
You will need to consider how well your system monitors your critical work areas Can you manage production if you are running at 100% capacity for your staff? Has inventory actually been received, and if so, are the counts reliable enough to forecast material requirements? Data collection ties into true manufacturing as well as accounting How well you collect vital data determines your ability
to forecast production information Data collection is an important part of the total solution for a company that requires MRP (Manufacturing Requirements Planning)
What key features set this product apart from others?
Before you tell your software supplier much about your business, find out what they think their product strengths are You will get a good feel for whether or not they design products for companies such as yours
Does the supplier offer frequent updates and an upgrade path?
Good software suppliers update their software frequently and provide bug fixes to clients Software is one of the few industries where you can upgrade your product to the newest, hottest version for a fraction of the price
Imagine owning last year’s car model, visiting the dealership and seeing a feature you like on this year’s model There is no way to upgrade - buy the new model or live without it! A good software publisher will provide frequent upgrades at reasonable prices
Is software maintenance available?
Before you make a purchase, find out if your software publisher has
a maintenance program in place that gives you access to frequent updates For a reasonable price, you should get an annual maintenance contract that provides
a continuous stream of product updates and improvements This demonstrates that the developer has an ongoing commitment to the product and to your satisfaction
Does the system have the capacity to grow?
If you are not sure how well a system will accommodate your company’s needs as you grow, here are some key questions to ask:
• What are the maximum number
of customers, vendors, bills of material, or inventory items that are allowed?
• How many line items can be on
a single invoice, sales order, bill of
Trang 9material, work order, or purchase
order?
• What is the maximum number
of users that can be working with
a particular application at the
same time?
• Can the software be customized
to meet the changing needs of a
growing company?
What kind of reports does the
system provide?
Your system must be able to
extract relevant information easily
A system using database files
provides virtually unlimited
reporting capability Ask for
sample reports; the product should
allow non-programmers to design
custom reports
Is the system easy to use?
Many buyers spend far too little
time evaluating this component of
the software Yet, ease of use will
have a dramatic impact on the
quality of your implementation
Poorly designed software leads to
frustrated users who bypass the
system or resort to manual
“shortcuts.” If you want a system
that delivers maximum
productivity, focus on how easily
your employees can use it
You want a system that lets you
enter information quickly and
efficiently Look for features such
as full screen editing, embedded
help systems, and clear prompts
Now that Microsoft Windows has
become the most popular
operating system, it is important to
ensure that production data entry
(particularly in sales orders and
purchase orders) does not require
excessive mouse use If the
operator’s hand must constantly
move between the keyboard and mouse, it can easily take too much time for data entry
You should also examine what it’s like to use the system on a day-to-day basis Is the sequence of steps
to create a sales order simple and straight-forward? Can you look up vendor information while you are
in the middle of posting a line item on an invoice or purchase order? Can you search the check file while you are viewing an open invoice? Can you add inventory items while you are in the middle
of a sales order?
The acid test for accounting ease
of use is to make a mistake
Because people do make mistakes particularly when entering accounting transactions, it is important to be able to correct them quickly and easily Believe it
or not, some of the most widely promoted accounting systems do not allow you to correct an error
in a purchase order without cancelling the entire P.O and reentering it from scratch!
How does the system handle data collection?
This capability dictates how well the program prevents mistakes from getting into your system The program should test for errors such as duplicate vendors and customers, incorrect item numbers, and unreasonable amounts and dates Your system should notify the operator of unusually high quantities or unit
prices for certain types of items and offer valid choices along with the notification message
What kind of documentation is supplied?
The quantity and quality of documentation is an excellent guide to the quality of the software Documentation includes CD-ROMs, tutorials, training guides, videos, technical reference manuals, as well as the basic program documentation Clear, accurate, and useful
documentation takes time to produce Software companies that have a long-term commitment to their users tend to develop and provide outstanding
documentation
What kind of security does the system offer?
The degree to which sensitive functions and reports can be safeguarded through password protection capability will affect how the program rates in security Ideally, you should be able to specify which operations can be performed by specific users at specific times With a good system, you should be able to set
it up so that your assembly technician does not see costs on the BOMs, but your production staff would see them
Trang 10Questions to ask your IT solution provider.
7
IT solution providers have special
expertise they have been through
the process many times before and
can help you save time and effort
They can help you choose your
software, install any needed
networks or hardware, and help
make sure the system is up and
running by your target date
The ideal provider for you is
someone who has installed
manufacturing systems at
businesses similar to yours You
will benefit substantially from
their expertise A manufacturing
company can recommend
providers in your area who have
expertise with companies like
yours You can also find a good IT
provider at your professional club
or organization Ask colleagues to
share their experiences
Has the provider installed
manufacturing software at
companies similar to yours?
Ask about company size, number
of employees, and nature of the
business
Will the provider provide
references?
Ask for contact names so that you
can call these customers and learn
about their implementation
Can the provider demonstrate the
software live?
While a software demonstration
can be helpful while you are in the
process of evaluating your
options, what you really need to
see goes deeper than what 30
minutes of bells and whistles will
show you A live demo allows you
to experience live data being
entered and to explore the features
of the program, closing periods,
posting to accounts, etc You may also find that you learn more by visiting one of the reference accounts Ask for references
Does the IT solution provider offer a complete service package?
As part of your implementation, you will need training, technical support, and many other services
Look for a provider who will work with you from start to finish You
do not want someone whose only focus is on selling software
What are the costs involved with adding more users or adding more modules for existing users?
When you are running price comparisons, dig a little deeper than initial cost In addition to considering maintenance and upgrade support and costs, think about what you’ll pay to add users Some packages charge you less than other packages for all modules, but gouge you in the cost
of number of users, while other companies are relatively inexpensive when it comes to adding users, but charge quite a bit for additional modules
Who is responsible for technical support?
At some point you will need technical support for your new system How much will the technical support cost? Find out what the policies are for
maintenance, upgrades, and support Get clear definitions up front Ask your provider what you can expect for support in turn-around times Some vendors allow you to control your turn-around time by purchasing a support upgrade package
Does the provider listen
effectively?
This question separates the true sales consultants from the peddlers A vendor cannot make recommendations for you without learning about your business and your objectives
Does the provider communicate clearly?
Avoid vendors who try to impress you with jargon and who
immediately start talking about equipment and program features Your focus during the interview should be on what applications the vendor can provide and how it can help you benefit from them not
on details
Do you think you can work with the provider?
You will be working with the provider over a period of weeks You may even end up with a long-term relationship if the provider helps change and extend your system as your company grows Choose a provider that is a good fit with your company’s
philosophy and culture Trust your instincts; you need someone with whom you feel comfortable