Bottom Line: The most successful small business manufacturers rely on ERP to drive faster growth and keep customers for life by improving product and service quality and reducing costs through operational improvements.
When you’re a small business manufacturer, the quality of the last orders delivered says more about you and what you care about than everything you spent on marketing last year. Manufacturers define growth today as:
- 76% of all manufacturers define growth by improving shop floor productivity, and for small businesses, this jumps to 82%.
- 73% have fully depreciated their shop floor machinery, which is why four in ten (41%) are going to replace legacy machines with smart, connected production equipment. An additional 41% are upgrading fully depreciated machines to achieve real-time monitoring and report.
- 35% of all manufacturers are implementing real-time monitoring and Manufacturing Execution Systems (MES) today, jumping to 44% for the fastest growing small business manufacturers.
These and many other insights are from the survey, Shop Floor Productivity Investments That Drive Manufacturing Growth. 150 North American manufacturers were interviewed to complete the study, with 40% of them being classified as small businesses. A summary of the results is shown in the graphic below:
ERP Features That Drive Grow For Small And Medium Manufacturing Companies
Small and Medium Businesses (SMB) compete and win new customers by increasing product quality while at the same time offering short-notice production runs. Small business manufacturers often get their start by being suppliers. Earning a reputation for excellent product quality, on-time deliveries and production flexibility is the most proven growth catalyst there is. Proving yourself an excellent supplier is the path to growth every small business manufacturer is after today.
Growing Faster Than QuickBooks Can Handle
How you go about proving yourself as a supplier to new customers and being able to grow faster than competitors depends on how you choose to organize production operations. SMBs who participated in the survey remarked that QuickBooks started to hold them back from expanding and could take minutes to run a pricing or quote query. They lost sales because competitors could produce queries faster and with more competitive pricing.
Small Business ERP Features That Bridge the Gap between Financial & Production Data
The breaking point is when operations and production needs financial data tracked in QuickBooks alone and can’t get it. Shop floor and production are often running on Microsoft Excel. The gap between financial and production data can bring operations to a screeching halt if there’s a costing, pricing or production error. The following ten ERP for small business features bridge that gap and more, enabling small business manufacturers to accelerate growth:
- An integrated financial reporting system that includes sourcing, production, inventory, and fulfillment costs while being able to create financial statements reflecting production performance in real-time. Not being able to see the financial impacts of their decisions on the supply chain, production and services costs is why the small business manufacturers migrate off of QuickBooks and Excel to an ERP system for their small business.
- The ability to track customer relationships with an integrated CRM system capable of capturing, analyzing and aggregating data from the many interactions channels, sales, service, and support have with prospects and customers daily. This is an area SMBs struggle with as much of this is done from daily interactions over e-mail and phone calls. Centralizing customer information enables an SMB to stay on top of every customer relationship by knowing which marketing campaigns led to their first purchase, products customers currently own, sales history and key contacts are invaluable.
- Inventory Control and Management that can scale from a single to multi-site configuration quickly. Managing inventory levels across a warehouse or entire supply network is an essential part of any small business manufacturing business. At a minimum, the Inventory Control and Management module needs to support reorder point calculations and alerts configurable based on replenishment points and product order levels.
- Enterprise Resource Planning suites purpose-built for your specific industry that doesn’t require much, if any, customization. Knowing which ERP system providers have expertise in your specific industry is invaluable in defining a short list to evaluate. The less the customization, the better as that saves on professional services fees and also enables SMBs to get up and running faster on the system.
- Manufacturing Execution System (MES) that excels at four foundational areas, delivering greater accuracy, agility, product quality, and scalability. For an MES to deliver the performance a small business manufacturer needs it to, four foundational areas need to be present in the software. These include support for creating an accurate Bill of Manufacturing (BOM). Second, Planning and Scheduling, capacity and load analysis on equipment and labor, Finite Scheduling, and Demand Planning is needed. Third, look for Shop Floor Control System support including integration to the production planning system and Real-Time Production Monitoring. Fourth, an excellent MES will also provide entirely paperless production reporting, supports real-time reporting, shop data support, production reporting and Quality Management.
- Integrated Supply Chain Management (SCM) system that provides the ability to manage suppliers, improving inbound product quality while reducing order latency and improving customer satisfaction. Supply chains and the suppliers that comprise them are the lifeblood of any manufacturing business. Managing them effectively takes a unique series of applications and insights to reach and attain excellent product quality and delivery accuracy.
- Real-time monitoring provides the insights needed to improve shop floor productivity, improve product quality, to enable greater growth. Discovering how a lights-out manufacturing shift can be accomplished with existing machinery and understanding why scrap rates are above average on a given production line are two of the many benefits real-time monitoring provides.
- Provides a choice of deployment options that adapt, scale and support your business’ ongoing Evaluate manufacturing software providers on the results their customers are achieving based on each deployment option they offer. Leading providers will offer manufacturing software on-premise, using hosted managed services or via Software-as-a-Service (SaaS).
- Analytics and Business Intelligence (BI) applications that integrate with production, financial and sales data to provide manufacturers a 360-degree, drill-down view of all Finding out which production areas will provide the greatest increase in product quality begins by analyzing incoming inspection, ongoing machinery yields, and audit outcomes.
- Proven expertise in your specific manufacturing industry and customer references willing to share experiences. Third party review sites including Capterra, G2 Crowd, and others have reviews of manufacturing software from users who’ve implemented them.