How to Choose An MRP System For my Manufacturing Business
In modern manufacturing, process efficiency is the key to profitability. Today’s markets demand greater quantities and varieties of products (each delivered on time and on-trend) than ever before, without any compromise in quality.
You can also listen to this article:
The common desire to achieve these goals in an increasingly difficult commercial climate has led to a proliferation of MRP solutions. There are now affordable Manufacturing Resource Planning systems (MRPs) available to meet the needs and budgets of different sized, volume manufacturers.
The question is, how to choose the right MRP system?
Often, small and medium-sized manufacturing businesses start to think about their software processes when they cannot do otherwise. To avoid wasting even more time comparing apples to oranges. the key is to clearly understand and prioritize your business needs, and then use them as a yardstick to choose and evaluate the solution that best meets your needs.
You need to understand very clearly what tasks they must solve. In this article, we will describe some primary parameters and capabilities of an MRP system, and how you can use them to evaluate different platforms.
What kind of problems can you solve?
Manufacturing software is not a monolithic approach designed to address a single problem. Since there are a variety of problems that manufacturing software can be used to solve, all MRP tools do not include an identical set of capabilities, nor do they prioritize the capabilities they include in the same way.
There are no effective software systems that ideally combine everything at once. Some large systems are trying to position themselves as universal systems, but in reality, they attempt to combine too many things, which then reduces the quality and flexibility of working with each individual task.
Think of your priorities
It’s best to choose your software based on the factors that are most important to your team. So, what is your main problem?
- Keeping track of your stock? Getting your inventory to optimal levels? Which materials need to be purchased? In these cases, you need software that’s going to provide you with a live inventory control that guides you, so that you make your purchases when the time is best – when you will not have excess stock, and also, at a time when you will not run out of stock. Which means – no more delayed deliveries.
- Is planning your production a priority? When should each operation start? When will the production finish? Perhaps you require something to help to avoid your machinery or people being double-booked? If that’s the case, you will need to find an MRP which will help you schedule your operational and human resources.
- Keeping track of your costs is your priority? How much the product will cost? In that case, you need an MRP system that can help you to make better pricing decisions that are based on real product margins.
However, this does not mean that the two sides of planning cannot be brought together in one all-around system. There are different sorts of planning which good MRP systems conduct at the same time: for example – material planning and operations planning.
Price & deployment type
Choose between a cloud solution (SaaS) or an on-premises solution.
Any software today is divided into two types according to the type of license:
- Saas (Software as a service) is “cloud” technologies in which the software product is located on the developer’s servers. Most often, your data is also stored there. In this case, payment is made monthly in small amounts. At the same time, you receive constant maintenance and updates from the developer, help, server space, etc.
- On-premises refers to the purchase of a “boxed” solution (i.e. once you purchase a software product, you gain full access to it), but installing the program on computers, and buying and maintaining servers for storing data becomes your responsibility. Additionally, possible improvements are made either by you or – for a fee.
In order to calculate which of the software products will be more profitable, it is necessary to take into account not only the cost of the program but also the possible associated costs, among which, when choosing the on-premises solution, it is necessary to include the purchase or rental of servers, as well as the maintenance of equipment and the program (backup, checking the integrity of databases, etc.).
For these reasons, for many, the usual monthly payment of Saas solutions is often more attractive. However, the cases are different, and the decision does not always depend only on the price. Sometimes confidentiality, the ability to work without connecting to the internet, the cost of and the access to capital, the growth curve, the access to technical skillsets, security and reliability, or some other considerations are more important.
Usually, for small manufacturers, flexibility, speed of access, reduced training and a nimble and agile “pay as you go” service, such as a cloud-based ERP, may mean that more capital is available for the operation of the business.
Think about system integration features
Integrations are complex but sometimes important. It is often the case that different types of data within companies live within a silo, together with being inaccessible to colleagues in a different department or location. Today, thanks to the proliferation of the cloud and secure connections, a lot of information can be made available.
The most powerful tools can combine data from disparate sources, regardless of origin or format — on-premises or cloud-based, structured or unstructured. The bottom line is that you can establish collaboration and automatic data exchange between different systems that you already use and plan to use in the company.
Think how long it takes to implement
Whichever principles you are guided by when selecting a specific program, remember the most important thing: the time to implement the software should be strictly limited!
You probably want to get started as soon as possible. It’s not a secret that traditional solutions take months to implement. No matter what system you choose, you must always plan all the stages of implementation and bring the process to the end. It is only in this case that your costs of automation will pay off and turn a profit.
INFOGRAPHIC: Top 5 Mistakes When Implementing ERP Software.
Evaluate the competency of service provider & online tutorials
Does the software have a friendly face?
You should not underestimate the value of an easy-to-use and easy-to-install informative software. Your MRP should have a smooth and navigable surface, it should be easy to use and be understood by all users, the management, and the employees.
Today, all the different operational functions within a company should have a common platform that is updated in real-time – by the salesperson, the purchaser, the stock clerk, the production planner, the shop-floor worker, the engineer, etc.
Does it work on mobile devices?
Any modern software product should work effectively, not only on stationary desktops but also on various mobile devices. The modern rhythm of conducting business requires it. Of course, in certain cases, this requirement is not mandatory, but it is better to have a mobile version ready.
Is reporting easy?
ERP and MRP analytics tools have vastly improved process efficiencies and decision-making abilities. Self-service analytics should have a user-friendly interface that can support different user types. Even non-technical users must find it easy to use and be able to create and understand dashboards and reports.
Many companies make a mistake by delaying the process of selecting an MRP almost to infinity. Of course, you want to choose the best one.
Firstly, try to move from the problem to its solution, as no matter which product you choose from the list, it will be a valuable assistant to your business. Also, it is better to put a solution into practice, even if it is not perfect. Unfortunately, this is not always possible if we are discussing on-premises systems, but most cloud solutions offer a free demo.
When testing the software, try to make a simplified emulation of your product’s production process which covers the use of features that are crucial to your business. After having tried to fulfill this task with the remaining software vendors, you should have your partner.