What manufacturing software ERP / MRP / MES a small company needs for production scheduling and control?
ULTIMATE GUIDE WHICH HELPS YOU TO CHOOSE MANUFACTURING SCHEDULING SOFTWARE.
ERP / MRP / MES what manufacturing scheduling software a small company needs for production scheduling and control?
Production planning in small manufacturing is a totally different process than solutions used in large factories with advanced technologies and sophisticated procedures. It requires a totally different approach and more flexible thinking.
When in doubt which solution is better for your small business: ERP/ MRP /MES software, don’t search any longer, stop to read:
THE ULTIMATE GUIDE WHICH HELPS YOU TO CHOOSE MANUFACTURING SCHEDULING SOFTWARE.
- Differences between the MRP system, ERP for manufacturing, MES system, and independent manufacturing software.
- Why do manufacturing ERP or MRP systems are not the best idea, and why do most MRP or ERP systems fail in a small manufacturing company?
- What do you think you need from manufacturing ERP / software, and what do you really need? What is better to choose: ERP / MRP software for production scheduling?
- Which manufacturing software or ERP system is best for small production planning and scheduling (depending on the industry you represent and your company’s size)?
- What are free or inexpensive alternatives to ERP / MRP, and why free ERP systems are generally costly?
- Why should you avoid using offline ERP manufacturing software, and what are the best trends to consider?
- Manufacturing software implementation – typical mistakes.
- We recommend the three best tools for a small manufacturing company /Manufacturing ERP system alternatives – easy and cheap scheduling software.
1. ERP / MRP / MES and other manufacturing scheduling software for production planning and control.
In the search for a suitable software for your manufacturing company, at some point, you probably came across terms: ERP/ MRP / MES. The definitions tend to be cloudy, and instead of helping you understand those terms clearly, add to the confusion. It makes the whole process even more complicated and discouraging. Here we will try to explain everything in simple words and shed some light on the differences between manufacturing software available on the market.
What is ERP?
An ERP for manufacturers is defined as an enterprise resource planning management system, which is a configurable enterprise-wide software package that integrates isolated functional areas, typically production, planning, purchasing, transportation, and distribution, but also sales, marketing, finance, accounting, and human resources — into a single system with shared databases. Even the definition sounds complicated, which indicates that ERP implementation is not just a simple software project but rather a change in the whole business processes to fit the new ERP system. It’s like managing simultaneous changes in different areas having the same resources available at additional costs, which might put a financial strain on the firm and substantially impact its performance.
ERP software comes equipped with modules for a range of business processes, including general modules and industry-specific ones. Consequently, an ERP system might be a solution for a variety of tasks by integrating these different components.
What is MRP?
MRP stands for material requirements planning. It is a system for calculating the materials and components needed to manufacture a product. It consists of three primary steps: taking inventory of the materials and components available, identifying which additional ones are needed, and then scheduling their production or purchase. The basic purpose is to ensure the highest rate of production in your manufacturing center. There is also a lean time concept, or to be more precise, lean times (the period from when an order is placed and the item delivered). Most companies use it to track and manage all dependencies and calculate the number of items needed by the dates specified in the master production schedule and boost inventory profitability. MRP is one of the most widely used systems for harnessing computer power to automate the manufacturing process, but using it requires you exceptional diligence regarding entering data accurately and punctually. If the data is old or incorrect, material forecasts can become skewed, leading to having too many or too few raw materials available for efficient business practice.
What is MES?
MES – stands for Manufacturing Execution System. It usually includes extensions to MRP / ERP systems and very rarely independent software, which extends to the shop floor and helps employees learn about planned tasks, register operations, monitor progress, productivity, etc.
In conclusion, we can sum up the above table as follows:
ERP systems are considered the most complicated and complex of all manufacturing software solutions. In many cases, they are only the basic platform to which different modules are added, from production registration to integrated and automated inventory modules. There are many things the company has to do, so the system to work smoothly and implementation will be successful. All elements need to be integrated and organized.
MRP is a simplified version, a kind of predecessor of ERP, with the main task of managing required materials – particularly what and when should be purchased considering variability in stock due to fluctuations in supply and demand through measurement of actual consumer demand and production needs. Although these two are very good, they aren’t designed to fulfill small manufacturing companies’ needs, which stride for flexibility and agility. Undisturbed communication at shop floor level and registration of work are crucial.
MES systems are, to tell the truth, extensions of other systems, allowing the present production data and monitoring progress. They can process and store all data or send it to integrated ERP / MRP systems.
There is also a group of production management software created to help small manufacturing companies or tailored to suit specific industries’ needs. We are talking here particularly about online tools (created mainly for small businesses), which offer completely different scaling possibilities and savings and are implemented within one working day.
Different types of manufacturing scheduling software considering the most popular problems manufacturers encounter:
- you wish to have everything in one IT system, with the option to extend it or add extra modules when the need arises
- your production is standardized / series so that you can make good use of automated planning or automated purchase
- to your ERP system, you buy an MES module to extend it to a production hall as you try to automate your warehouse and inventory as much as it is possible
- you are aware of the fact that:
- it will be quite expensive
- it will require a lot of time, at the start
- you are ready to accept the rule: if it isn’t in the system, it doesn’t exist
- adding a new product will require a lot of time and precision, respectively, the same will require each change in the system
- you are mainly interested in planning and calculation, based on considering variability in stock due to fluctuations in supply and demand by measuring actual demand and production needs.
- you have an accounting system, which you are quite fond of, and there isn’t a need for integration of this system or change
- you can extend your activity (unless you haven’t this function already built-in) by sending data to the shop floor and registering them
- introducing a new product still takes a long time, so it works best with series production / repetitive processes.
Simple manufacturing software (ex. Prodio)
- you are mainly interested in organizing your production, regaining control, and learning about real cost and productivity
- the most important is fast communication between the manager and shop floor, clear vision of working schedule and parameters
- it would be best if you had quick effects, functionality, simplicity (reducing functions that you wouldn’t use anyway)
2. Why do manufacturing ERP or MRP systems are not the best idea? Why do most MRP or ERP systems fail in a small manufacturing company?
Theoretically speaking, ERP/MRP systems are for manufacturers a dream come true. That’s why you might be surprised to learn that most implementations end up in disappointment, where a small company spends thousands of dollars on ERP system investment and returns to Excel or other simple solutions such as Prodio.
The most important difference is those small manufacturers assume the system will automatically guess what they need, but it doesn’t work like that and often ends up in disaster.
Advanced ERP systems are incredible technological and mathematical creations. This allows them to automate technological processes in large factories where thousands of elements are produced.
Imagine an ultra-modern car factory, where each model of ex. BMW series 5 can be configured in few thousands of different ways, starting from the type of engine used, drive, gearbox, the color, driving assistant, type of leather covering seats, to the color of thread used in the steering wheel coverage. Each chosen parameter implies using different parts
ordered from the supplier and opens up additional combinations. There are thousands of orders at the production line every day – a man can’t monitor them all. ERP systems make sure the right parts are at the right place, at the right time. Pure magic.
Let’s look at this issue from a different angle – for the system to work so smoothly, thousands of programmers made sure that each detail will be there, hours were spent discussing things with suppliers, so the software could learn new possible combinations, limitations, etc., and first and foremost that the series product could be produced in many various combinations. Usually, this type of system is connected with suppliers’ warehouse inventory system, and it has…
Thanks to this approach, the software has a plethora of data regarding the present situation, knows the number of employees at the production hall, their holiday schedule, production line status, and the queue of tasks for 2-3 months upfront. PROVIDING THESE CONDITIONS YOU CAN PLAN PRODUCTION.
You can take the best, worth a couple of million ERP systems with artificial intelligence, but there is no way it would work in small manufacture.
The owner of a small company thinks that if he paid several dozen/ thousands of dollars for the system, the computer should solve all its problems. Obviously, the implementation was rushed, shortcuts were made where possible because there wasn’t much time, work was hectic, and the IT company did the job based on limited data. And what’s next? There is no surprise that it doesn’t work.
Why did the implementation of the ERP / MRP system failed in a small manufacturing company:
- flexibility and custom production: in small manufacture, there isn’t time for the team to spend 1 hour on entering all data into the system, dividing the product into smaller parts, logistic minimum, surplus material, or material loss. The Client places an order, and its due date is “for yesterday,” which means all these preparatory jobs have to be skipped, and the system lacks operational data from the start.
- imprecise data: in a small manufacture, nobody cares about the % of losses, creating alternative technology, additional stock/ inventory, or schedules of machine downtime, not to mention even more advanced data.
- Mistakes copied from the production panels create chaos in the whole system- as a consequence, employees make mistakes, writing ex. Instead of 10 pieces, 100 or they click the wrong product, and because ERP / MRP systems count automatically and take away things from the stock, it works as a domino effect and spurs even more incorrect decisions.
- very often, there is a need to pass-by the system due to its inflexibility because good MRP/ERP won’t let you send an order to production when there isn’t a suitable raw material entered in the system or technology, even though you know that this material is available and the technology could be completed on the go – well, that’s the trouble with using ERP
My experience taught me that most companies that come to us to implement Prodio and want to make their life easier. They work not only with ERP but also with the Excel. Why? If you can’t trust everything you have in your ERP system, there has to be somewhere else where you store your data safely, so naturally, you put your trust in Excel.
3. What you think You need from manufacturing ERP / software, and what You really need? or which is better to choose: ERP / MRP software for production scheduling?
The below table shows an example of a small machining manufacturer. There are two columns: the first one shows what a manufacturer thinks is needed, the second one, what is really needed.
The need can change depending on what is being produced, but the basic objectives stay the same. The biggest difference comes from the type of production, whether it is a series production or something more customized.
4. Which manufacturing scheduling software or ERP is best for production planning and control (depending on the industry you represent and your company’s size).
5.What are free or inexpensive alternatives to ERP / MRP, and why free ERP systems are generally costly?
This is one of the best marketing products in the IT history – software which can do practically anything, but in standard version offers almost nothing, because the company, which is responsible for implementation, has to make money. Free production management software is usually a cheap marketing gimmick. Only the licenses for basic modules are free, and companies make a fortune on implementation services, and you get a product without any technical support. That’s why you should be aware of traps:
Watch out for “free production management software” or “open source ERP.”
- Free is usually only basic modules licenses (such as ex. OpenOffice), any dedicated modules must be purchased at additional costs;
- Independently installed systems usually don’t have any guarantee and technical support, and they might not be developed any further;
- Imagine that possibly you managed to install some open source ERP, and there is another JPK, which you have no idea about;
- Software implementation and adjusting it to your needs as well as maintenance are paid, and fees are very high – this is the “revenge” of free license policy;
- It turns out in total balance that “free” software is more expensive than the paid ones and involves higher uncertainty.
What is a PRACTICAL difference between operating of ERP system and an accounting program?
It isn’t the access to production or human resources (these modules you can buy in addition to simple accounting software). Still, a basic ERP system usually doesn’t have any production module, and you have to buy it as an extra.
The difference between accounting and inventory software and ERP is calculating material from the warehouse (material demand). For example, if you produce a bed, which consists of a frame and a materace, the earlier mentioned CDN Optima, will show you the total number of frames booked, based on the number of beds ordered. However, it won’t use this information while making a purchase plan connected to the production process until CDN XL, from the same producer, will point it, but you have to spend tens of thousands before.
Please remember that practically none of the ERP-s reach the production hall as a standard.
The idea is that you buy a basic version of ERP and next upgrade or modify it to suit your needs better. Usually, you end up buying additional modules to get your ERP system work:
- The production module for ERP – enables creating of products technology and work planning;
- MES registration module for production employees, where they can click completed works/operations to appear on the production plan;
- CMMS (managing maintenance, machine service, etc.);
- WMS (warehouse managing system, operating on bar codes).
To sum up, the newest ERP-s are sophisticated tools, where you buy a “foundation” and build on it a perfectly tailored system, adding as many “building blocks” as you need. If you wish to have an ERP for production, you have to search for ERP + MES.
6. Why should you avoid using offline ERP manufacturing software, and what are the best trends to consider?
Nowadays, there is no point in investing even the lowest amount of cash in tools that cannot work online. The online approach guarantees flexibility regarding cost needs clear calculation – which proves useful in time of covid19 pandemic.
These are the tools, such as Prodio software, which are constantly developed. By investing a small monthly subscription fee like everybody else, you can use this opportunity to contribute to software development.
Each of these companies presents a great approach to creating simple production planning tools, which are easy and user friendly.
Implementation time decreases almost to nothing.
The smaller the company is, the faster it should move to a “cloud,” as, sooner or later, that’s the way all businesses will go?
- Installing any software in your company, you have to realize that in a few years, you might have to start from scratch;
- Practically speaking, for small companies, without an IT department and advanced network, an online service is much safer than storing data at their premises.
- The term “cloud” for production software shouldn’t scare you because the data is on a particular server in a secure location (as it is in Prodio); it isn’t all over the Internet, as in other cloud services.
Integration with accounts and inventory module isn’t always worth doing.
As an entrepreneur, you strive to have work automated. You fight to eliminate dispensable procedures; you wish to pay once only and have everything in one place – this thinking is like grist to the mill of companies, which want to sell you the idea of “integration.”
Integration is great, but it requires precision, and the system should be tailor-made for the company.
Each waste and what is going to happen with it (to go to the warehouse or the trash), each technological change or different raw material used by an employee MUST BE ACCOUNTED FOR in the system; otherwise, just after 2 months, it will be impossible to count your stock, which was automatically calculated and based on production. No products can be taken without being physically ordered, and all actions must be put in the system (it will be blocked otherwise).
You might now think, it’s great and that finally your small manufacture will be organized – but when there are really many orders. The machines can’t work, because you didn’t enter all necessary data into the system, you may go back to old good paper orders, and leave this new system behind, although you spent on it a several dozen.
Automatic planning – won’t pay itself off!
Gantt’s graph and a dream of one magic button setting a production plan is a topic of many talks between company owners.
Meanwhile, although there appeared many different programs, which promise to plan everything themselves, so far it is still necessary for the software to know before it starts the planning process:
- calendar of availability of production employees, time off work, their work presence,
- matrix of competencies, to know who and in which scope can operate on which machine,
- service and maintenance schedule,
- perfectly prepared technology of the product, including changeovers, with exact lead times, possible replacement by other machines, types of tools used for a particular machine
- properly run warehouse and inventory system and raw material- products allocation.
If you fail to provide any of the above parameters, you can forget about even the best algorithms automating the production for you? The software is a small company that should tip you on your machine’s occupancy and estimated lead time of production. And this is exactly what we wish you?
7. Manufacturing software – typical implementation mistakes.
Failed manufacturing software implementations are a taboo topic in the manufacturing world, often swept under the rug. Why do manufacturers fail?
1) Perfect theory
You have an idea of your perfect manufacturing software and a list of potential problems and difficulties. Regardless of tips, we give you – reality will put all of them to the test the most effectively. So no more theory, start practising!
2) Let’s start after the season ends
How much time and money must be wasted to finally find a few hours for constructive optimization?
3) All in one package
There are small manufactures, which wish to invest in advanced production, inventory and accounting software. Ok, but remember that your flexibility will also be limited and your daily tasks hindered.
4) I don’t have my data because it’s in “the cloud”.
It is a much better solution for small manufacturers to store all software data at the external server with an encrypted connection, simpler, cheaper, and more convenient than internal infrastructure.
5) I can’t afford it…
Is 5% a lot for you? Let’s say you employ 15 people and spend about 30 000 euros each month on their salaries. If you increase productivity by 5%, you are plus 15 636 euros in a year. You are right – you can’t afford to buy Prodio.
8. Three best tools we recommend for a small company. ERP system alternatives – easy and cheap manufacturing scheduling software?
Which manufacturing scheduling software can help you to solve your production problems in the best possible way?
Check out our guide.
These are the tools, such as Prodio software, which are constantly developed. By investing a small monthly subscription fee you pay, you contribute towards software’s development as everybody else does. We are improving its functions all the time, listening to users’ suggestions, and perfecting its efficiency and usability.
Each independent software company presents a great approach to creating simple production planning tools, which are easy and user-friendly.
It would be best if you had a light and simple prototype of the ERP system, and the most important is control of the parts flow and inventory tracking in the system.
It would be best if you had a simple tool for simple cycles.
You need to monitor work and plan production easily.
Many might ask why do you praise your competitors in this comparison?
First of all, both tools, mentioned earlier, are created by great companies that introduce fresh and new IT solutions. Secondly, though they practically look similar to Prodio, these companies target completely different product niches and solve different problems.
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