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 a small manufacture is a totally different process compared to 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:
ULTIMATE GUIDE WHICH HELPS YOU TO CHOOSE MANUFACTURING SCHEDULING SOFTWARE.
- Differences between MRP system, ERP for manufacturing, MES system and independent manufacturing software.(click to read more)
- Why manufacturing ERP or MRP systems might not be the best idea and why majority of MRP or ERP systems fail in a small manufacturing company? (click to read more).
- What do you think you need from manufacturing ERP / software and what do you really need? or Which is better to choose: ERP / MRP software for production scheduling? (click to read more).
- Which manufacturing software or ERP system is best for small production planning and scheduling (depending on the industry you represent and the size of your company)? (click to read more).
- What are free or inexpensive alternatives to ERP / MRP and why free ERP systems are generally very expensive? (click to read more).
- Why should you avoid using offline ERP manufacturing software and what are best trends to consider? (click to read more).
- Three best tools we recommend for a small manufacturing company /Manufacturing ERP system alternatives – easy and cheap scheduling software? (click to read more).
Imagine a magician performing in front of the cheering crowd of spectators. He pulls stunt after stunt and the audience admires his dexterity and mastery. In the center of the stage he expertly deals cards, and although you don’t believe in magic, nonetheless feel charmed by his performance. When you think it’s the end of the show, he still manages to surprise you with having an ace upon his sleeve and gathers a round of applause. You might ask what’s this got to do with production planning and online software? Managing a manufacture is a serious business after all, not just tricks and fun. Well let me explain the analogy and show you that having an upper hand proves very practical, in both cases: magician’s performance and surpassing your manufacturing rivals. Thanks to an easy to use online management software you can take the center of the stage and deal all the cards. How is that possible? Read on.
1. ERP / MRP / MES and other manufacturing software for production scheduling and control.
In search for 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, just 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 result in putting financial strain on the firm and thus substantially impact its performance.
ERP software comes equipped with modules for a range of business processes, including general modules and industry-specific ones. As a consequence 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 concept of lean time 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 of dependencies and to calculate the number of items needed by the dates specified in the master production schedule as well as to boost inventory profitability. MRP is one of the most widely used systems for harnessing computer power to automate manufacturing process, but using it requires from you exceptional diligence regarding entering data accurately and punctually. If the data is old or incorrect, material forecasts can become skewed, which could lead to having too many or too few raw materials available for efficient business practice.
What is MES?
MES – stands for Manufacturing Execution System and it usually includes extensions to MRP / ERP systems, and very rarely independent software, which extends to shop floor and helps employees learn about planned tasks, register operations, monitor progress and productivity, etc.
In conclusion we can sum up the above table as follows:
ERP systems are considered the most complicated and complex from all manufacturing software solutions and in many cases they are only the basic platform to which are added different modules, from production registration to integrated and automated inventory module. 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 management of 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 too are very good, they aren’t designed to fulfill the needs of small manufacturing companies, which stride for flexibility and agility, and where undisturbed communication at shop floor level and registration of work are crucial.
MES systems are to tell the truth, extensions of other systems, which allow to present production data and monitor 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 with intention to help small manufacturing companies or tailored to suit the needs of specific industries. 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 small manufacturing software considering the most popular problems manufacturers encounter:
- you wish to have everything in one IT system, with the option to extend itor add extra modules when the need arises
- your production is standardized / series so you can make a good use of automated planning or automated purchase
- to your ERP system you buy a 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 through measurement of actual demand and production needs.
- you have an accounting system, which you are quite fond of and there isn’t a need of integration of this system or change
- you can extend your activity (unless you haven’t this function already built in) by sending data to 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
- you need quick effects, functionality, simplicity (reducing functions which you wouldn’t use anyway)
2. Why manufacturing ERP or MRP systems might not be the best idea and Why most of 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 that small manufacturers assume the system will guess automatically what they need, but it doesn’t work like that and very 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, gear box, 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 of different parts
ordered from the supplier and opens up additional combinations. There are thousands of orders at the production line every day – it is impossible for a man to 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 detal 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 plethora of data regarding 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 couple of million ERP system with artificial intelligence, but there is no way it will work in a small manufacture.
The owner of small manufacturing company thinks, that if he paid several dozen/ thousands of dollars for the system, the computer should be able to solve all the problems by itself. Obviously the implementation was rushed, shortcuts were made where possible, because there wasn’t much time, work was hectic – IT company did the job based on limited data provided. And what’s next? There is no surprise that it doesn’t work.
Why did the implementation of ERP / MRP system failed in a small manufacturing company:
- flexibility and custom production: in a small manufacture there isn’t time for the team to spend 1 hour on entering all data to the system, dividing 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 machines 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 takes 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 majority of companies which come to us to implement Prodio and make their life easier, were working not only with ERP but as well with Excel.
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?
Below table shows an example of a small machining manufacturer. There are two columns: first one shows what a manufacturer thinks is needed, the second one, what is really needed.
It’s true that need can change depending on what is being produced, but the basic objectives stay the same. The biggest difference is whether, it is a series production or we produce something more customized.
4. Which manufacturing software or ERP system is best for small production planning and scheduling (depending on the industry you represent and the size of your company).
5.What are free or inexpensive alternatives to ERP / MRP and why free ERP systems are generally very expensive ?
This is one of the best marketing products in the IT history – a 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 licences for basic modules are free, and companies make 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 are usually only basic modules licences (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 licence policy;
- It turnes out in total balance, that “free” software is more expensive than the paid one, and involves higher uncertainty.
Some of examples of the most popular ERP systems for smaller companies include SAP Business One and Insert Navireo.
What is a PRACTICAL difference between operating of ERP system, and accounting program?
It isn’t the access to production or human resources (this modules you can buy as addition to simple accounting software), but 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 the way of calculating material from the warehouse (which is called 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 a total number of frames booked, based on number of beds ordered. However it won’t use this information while making a purchase plan connected to 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 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:
- Production module for ERP – it enables creating 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 best trends to consider ?
Nowadays there is no point in investing even the lowest amount of cash in tools which aren’t able to work online. Online approach guarantees flexibility regarding cost, needs, clear calculation – which proves useful in time of covid19 pandemic.
These are the tools, our production management software, which are constantly developed, and by investing a small monthly subscription fee as everybody else, you can use this opportunity as others also contribute towards software development.
Each of these companies present a great approach how to create 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 time, you might have to start from scratch;
- Practically speaking, for small companies, without 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 particular server in secure location (as it is in Prodio), it isn’t all over the Internet, as in other cloud services.
Integration with accounts and warehouse isn’t always worth doing
As an entrepreneur you strive to have work automated, and 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 to 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 and 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 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 perform operation on which machine,
- service and maintenance schedule,
- perfectly prepared technology of 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 of algorithms automating the production for you ? The software in a small company should tip you on your machines occupancy and estimated lead time of production. And this is exactly what we wish you ?
7.Three best tools we recommend for a small manufacturing company /Manufacturing ERP system alternatives – easy and cheap scheduling software?
Which software can help you to solve your production problems in the best possible way– our guide.
These are the tools, ex. our production management software, which are constantly developed, and by investing a small monthly subscription fee you pay, as everybody else does, you can use this opportunity and contribute towards software development. We are improving its functions constantly, listening to users suggestions and perfecting its efficiency and usability.
Each of independent software companies presents a great approach how to create simple production planning tools, which are easy and user friendly.
You need a light and simple prototype of ERP system and the most important is control of the parts flow and inventory tracking in the system.
You need 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 really great companies which introduce fresh and new IT solutions. Secondly, each of these companies, though they practically look similar to Prodio, target completely different product niche and solve different problems.
Do you have any questions?
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