Tim Grant, ERP consultant at Business Solution Providers Inc., writes about why his experience helping small to mid-sized manufacturers choose and implement software has made him prefer “a true manufacturing program like MRPeasy”.
Manufacturers need to manage more than inventory
The biggest misconception that QuickBooks Pro Advisors make about product-based software is the convergence of inventory and manufacturing management software. From my experience, they assume that if an inventory program includes a Bill of Materials (BOM), that makes it an adequate software choice for manufacturing clients. And that’s a wrong assumption to make.
Having a Bill of Materials function simply allows for ‘light assembly’ to take place and the according adjustments to Inventory Asset and Cost of Goods Sold to take place. However, there’s much more to the needs of our manufacturing clients: labor tracking, overhead costs, production planning, and scheduling, operation (routing) steps, lot tracking, demand forecasting, and cost accounting.
One of the online products that satisfy these required manufacturing needs is, ‘MRPeasy.’ The software maker, ‘MRPeasy Ltd.,’ started developing the product in 2010. Based out of Estonia, one of the European Union countries, the company’s founders saw a niche open for the under-served small manufacturers.
“MRPeasy’s founders identified a market gap where small manufacturers couldn’t benefit from sophisticated production planning software (like SAP, JDE, Epicor or MS Dynamics) and they decided to create a product that would change this situation,” is how their website puts it. Today, they sell the product around the world.
Affordable, understandable and easy-to-use
What they came up with is an affordable, understandable, and easy-to-use software that ‘fits’ the requirements of most small manufacturers. For example, many producers these days sell online directly B2C and B2B, so they need integrated eCommerce access. MRPeasy natively works with Shopify, BigCommerce, WooCommerce, and Magento so customer orders can be brought in directly, without the need for ‘bridge’ programs or imports. This saves the small manufacturer time in fulfillment processing, as well as just costs of capturing and entering data.
But it’s the ‘Material Requirements Planning’ or MRP that really sets this product apart from the common inventory products that we’re all familiar with. A shoe distributor only needs to know how many pairs of shoes and of what size and brand are coming in, which ones they have in stock, and how many are on current sales orders. But if you’re making shoes, you need to know how much of each material you have that is going into each of the final products and what are the forecasted demand requirements for material of future sales. This is no easy task!
That’s where a true manufacturing program like MRPeasy comes in. With it, the user can forecast demand and the corresponding material requirements, they can schedule operations and manufacturing orders to accommodate expected demand, and they can book orders impacting availability which further impacts part, labor, and equipment demands.
The four primary functions
The main page displays the modules used, with four primary functions:
- CRM – this is the sales hub, and the user can track orders in either a list or a ‘Pipeline’ view. Customer Orders track the sales orders, items, invoices, and shipments. From here, a Manufacturing Order can also be triggered by sales for custom orders or to impact demand.
- Production Planning – this is the core element of the program. This is where manufacturing orders are generated, and, in turn, pull in the Bills of Materials and Routings to create the products. Routings detail the operation steps and equipment, as well as track worker and department labor costs. Production Scheduling tracks the progress of the orders on a timeline.
- Stock – is inventory management. Here, the user can see not only on-hand and available inventory, but also ‘expected’ stock coming in on outstanding purchase and manufacturing orders.
- Procurement – is the Purchasing module. Processes can be added for approving POs before sending, as well as having inspections required before items are put into inventory. A Forecasting feature shows MO and PO requirements for upcoming demand projections.
Notes: The ‘My Production Plan’ module allows workers to enter time and material consumption on MOs for which they are assigned without having full access to other modules. The ‘Accounting’ module is a simplified, stand-alone accounting feature for users that do not have an integrated accounting program (MRPeasy natively integrates with QuickBooks Online and Xero).
One of the things that I love about this program is its ‘always on’ lot tracking and how it can be used. Every material that is bought or made is assigned a lot number automatically, even before the items are actually received, or production is finished. In this way, the users can track ‘planned goods’ and create material labels to apply ahead of the work.
Should a product recall happen, the client can quickly view the supply chain of materials that went into a finished good and to which customers the items were sold. There’s no need to set up individual items for lot tracking in the system – it is included automatically for full backward traceability.
Production is where it all happens
Manufacturing companies purchase this type of software because they need to track three types of costs: material, overhead, and labor. These costs may be dependent upon the production process type the company is using: Project, Work Center, Batch, Line, or Continuous. MRPeasy can handle all of these.
MRPeasy tracks material through multi-level Bills of Material across multiple Production Sites and locations (bins). It tracks fixed and variable costs of equipment and ‘consumable’ items during production. And it tracks labor either at the individual or department level to capture costs per unit produced.
The Production Schedule tracks the work either by the Manufacturing Order or the Operations’ workstations. It visually shows which orders are in production and either on time or delayed, and which ones have finished.
The view is also available in a Gantt Chart breaking out the workstation operations and length of time expected before completion.
The Production Planning module houses all of the elements required for the builds: BOMs, Routings, and Workstations needed for production. However, it is in the Settings module where the user can refine the functionality to match up to the processes used in the business. For example, a company selling to retailers may need a ‘Matrix BOM’ to track various similar attributes of goods (color and size, for example). This can easily be turned on and reflected in BOM setups.
Or a company may have multiple production lines and need to run ‘parallel’ lines to speed up production. They may need to track ‘piece’ payments for workers, or material sent out to subcontractors for value-added services. They may need forward or backward scheduling of manufacturing orders. All of these options can be turned on in MRPeasy.
MRPeasy is already set up to work with:
- Cloud Storage services (Drive, OneDrive, Dropbox)
- eCommerce (Shopify, WooCommerce, BigCommerce & Magento)
- CRM (HubSpot, Pipedrive)
- Shipping (ShipStation, Ware2Go)
- Accounting (QuickBooks Online, Xero)
MRPeasy opened up the possibility of material requirements planning to small to medium-sized online businesses. There’s a strong need for these small producers to track inventory, fulfillment, and, more importantly, costs related to production. MRPeasy fills these needs with a feature-rich product at an affordable price. Pricing runs from as low as $49 per user per month for the Starter edition, $69 for Professional, $99 for Enterprise, and $149 for Unlimited.
Article written by Tim Grant, Software Consultant at Business Solution Providers Inc. First published in Insightful Accountant.
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