Different Types of Production Planning Software For Small Business
There are several different types of production planning software for small businesses that manufacturing companies could use to make their operations more efficient and competitive.
Some of these solutions are built in-house, while others are ordered from specialized software providers. They might have different cost and functionality, depending on what features manufacturer needs and ready to pay for.
Finding the right production planning software for a small business is not an easy task. There are literally hundreds of well-known solutions available on the market right now and all have different visibility and functionality options. So, before discussing different types of planning software, first, let us quickly recap the main principles behind the production planning process itself.
What is production planning?
Production planning – a systematic approach, which helps to calculate and estimate stages of the manufacturing process as well as lead times and product costs. Some of these factors might include an increase in the product range, the introduction of new manufacturing equipment, changing inventory stock, and others.
For a manufacturer, it is very important to be able to make calculations and estimates of these factors as precisely, as possible. As a result, he wants to be able to answer all of the following questions:
- What are we planning to produce?
- What do we need for that?
- What do we have?
- What else is needed?
By answering the above questions the manufacturer is able to prioritize what to produce and in which quantities, making the overall use of resources more efficient. Still, today many small manufacturing businesses employ intuition and obsolete methods when making production planning decisions, losing precious time and unrealized business potential their business has.
Production Planning Software for Small Businesses
The development of technology has made the production-planning process very easy to perform. While there are still manufacturing companies, utilizing pen and paper, when doing their MRP estimates, most manufacturing companies use one or the other type of software solution.
Below are the three main types of software solutions used by small businesses in production planning.
Excel, Open Office, or Google Documents. Spreadsheet software is the ultimate planning software tool being used by about 30% of small businesses. The main reason for that is its availability, low or even absent cost and ease of use. A good example is Microsoft Excel, which comes with a standard Microsoft Office package already preinstalled on every Windows PC, thus baring no additional expenses for the business.
In addition, Excel is a very easy tool to work with, it has a big user database worldwide, so any question that might occur will be answered. Also, the utilization of Macros programming in Excel makes it possible to code some additional functionality, as a result of making the production planning process easier.
However, no matter how good of a tool Excel is, it has its limitations. One of these limitations is speed – the more different tables and individual files are being interlinked with each other, the slower the performance of an Excel work file.
In addition, while Excel offers an option to automate things with Macros, this would only work for spreadsheets with a small number of different variables. In cases, where you have thousands of different variables, the load time of installed scripts could be hours, which makes them not very practical to use on a day-to-day basis.
Custom-made planning software
This includes solutions done in-house. Companies that decide to go this route, most often than not have experience working with Excel or similar spreadsheet-based software. By creating a solution in-house manufacturer is thinking of increasing the productivity and reliability of its planning department. Another reason small businesses chose in favor of developing their own tool is that they could potentially save on recurring costs and have full control over which features will be developed.
While the idea of using some sort of software instead of a complex spreadsheet is a good one, creating a totally new planning software from scratch could be very challenging. First of all that would need to have someone on staff who would be knowledgeable enough to drive such a development, a programmer or IT project manager. Secondly, with custom solutions, there is always a big risk that a person responsible for the support and development of the program could change position, leaving the company without support. In the case of outsourcing development, the same risk remains – a company developer could be out of business leaving its customers on their own.
Finally, the idea that there will not be any additional costs after the software is developed is just wrong: each new update, each small tweak will cost the manufacturer extra. Eventually, these extra costs could easily surpass monthly payments had the company selected a ready-made solution.
Specialized production planning software
A professionally developed production planning software for small businesses offers the best of two worlds – it provides all the production planning features that a small business needs and unlike spreadsheet software it is fast and reliable.
Today most of MRP software providers use cloud solutions for hosting, which increases performance reliability and speed. It does not matter whether one or a hundred people are working with software simultaneously, it is always performing fast. Another advantage is that with professionally created and updated planning software small businesses can be sure that there always will be professional support provided. Therefore, they do not have to invest additional funds into their own IT department.
Speaking about the cost of such a production planning solution, they are very affordable. Nowadays small businesses do not have to break their banks by investing hundreds of thousands of dollars in complex and elaborate ERP solutions, like SAP or Epicor, to get the same production planning functionality.
With the majority of specialized production planning software