What is important for human resource management software for manufacturing SMBs?

There are many human resource management software packages, as well as HR modules, for general purpose ERP systems. Leaders focus on big enterprises.

Smaller software products try to follow them. This leads to over-engineered solutions that require too much effort to be efficiently used. This article describes what are the special needs of manufacturers – especially small and mid-sized companies.

Human resource management is a very broad topic, which includes both strategical and operational activities, planning, reporting, time tracking, wages, holidays, sick leaves and the handling of improvement suggestions. Some programs try to accomplish all these needs. But, as the Pareto principle states, 20% of efforts give 80% of results. And gaining the last 20% of results requires the remaining 80% effort.

Special needs of manufacturing

There are three most important use cases in a manufacturing company:

1. Scheduling jobs and assigning tasks
2. Informing workers what to do
3. Measuring results, including time tracking

All other cases, like handling holidays, improving skills, analyzing suggestions, etc., happen only three-four times per year -and some never happen at all. Not every worker will suggest an improvement. These cases can be easily handled manually, even outside the production planning software. Holidays and sick leaves can be handled in accounting or payroll software.

Adding all possible functions to the manufacturing resource planning software makes it more complicated, both for the management and for the workers, and severely increases implementation and training costs. It may happen that, for a factory with a thousand workers, some automated centralized planning is needed. But in a company with a hundred employees, this is clearly over-engineering.

What a HR module should do

As mentioned above, there are three main tasks that the HR module of manufacturing software should accomplish. These tasks occur many times per day, and optimizing each yields considerable results. Other situations, which can happen once per month, or even more rarely (for example, training courses), can be handled outside the MRP system for manufacturing SMBs.

Scheduling tasks

Workers have different skills, and based on their skills, workers can be grouped into departments. For each operation, or workstation, it is possible to define which departments can fulfill the job. Based on this information, when a new manufacturing order is created, the software knows when, and how many workers with particular skills, are needed.

Often, manufacturing orders are created for the future. At the creation time, it may not be known which workers will be available on the fulfillment day. Assigning jobs to departments solves this issue. If a job is assigned to a department, it can be re-assigned to a particular worker in the future.

There are two ways to re-assign jobs to a worker. The first one is through pre-planning: a production manager sees all jobs that are not yet assigned to workers. When he knows who will perform the task, he re-assigns the job. The second option is through reporting: workers see jobs that are assigned to them, plus jobs that are assigned to their departments, but have not been started by others. When a worker starts a job that is assigned to his department, this task is automatically re-assigned to him, and others do not see that task anymore.

Informing workers and reporting results

In many businesses, workers do not need to be instructed what to do. For example, a waiter knows his responsibilities and tasks. But in manufacturing, workers need to know what to produce. In the pre-computer era, various papers, such as job sheets and job cards, were used.

Nowadays, workers can use computers, internet-kiosks, or handheld devices to receive tasks, mark starting and finishing times and report results. This reduces paperwork, increases transparency and improves management awareness.

The collected information can be widely used; for example, to calculate salaries (whether time-payment or piece-payment are used), or to measure efficiency.

To sum up, there are three main functions that are truly important and must be definitely integrated into MRP software. Other functions are possible, useful and required for bigger companies. Furthermore, they may cause more troubles than gains. Focusing on these three functions will yield the best results.

More about ERP systems for small manufacturers:

Top 5 Manufacturing Production Software for a Small Business