Debunking A Myth — Bigger Does Not Always Mean Better When Selecting Affordable and Robust Enterprise Applications for the Smaller Enterprise

There are new breeds of cost-effective solutions that can quickly and seamlessly integrate front-to-back systems from production to accounting. While highly scalable and easy to use, these affordable applications may offer greater profitability and a lower cost of ownership for the small, fast growing organization.

Small- to mid-sized manufacturers have a dilemma — in order to grow and remain competitive, they must stay ahead of the competition without falling into financial ruin by investing in expensive and complex applications that disrupt, or sometimes cripple, the flow of their operations. In particular, for custom manufacturers or service-repair organizations, a small mistake can quickly turn into catastrophe.

For manufacturers of customized product design, there is an ever-increasing need to integrate the entire lifecycle of make-to-order or engineer-to-order manufacturing environments more tightly. To remain competitive, these shops are requiring a high degree of robust and sophisticated operational and accounting systems that are flexible and designed around an organization's specific usage requirements.

Up until recently, options were limited. Unfortunately, custom shops were typically either forced to buy larger expensive ERP systems that would never reach their required economies of scale, or force-fit vanilla applications that they could not afford to customize.

In such variable circumstances, it is more important than ever to have complete command of the entire production process, including financial and operations data, from a single system, creating the opportunity for greater profitability, more streamlined workflow — from ticket order to distribution — and real-time analysis of operations and processes. Direct access to job costs, materials, labor and the sales order can help a small business owner determine the profitability of a job from the outset.

The question becomes, what are small- to mid-sized companies to do in complex manufacturing environments? What is needed is an enterprise business application that can scale to the size, budgets, resources and objectives of the business and grow with it, adapt to changing requirements, and provide the level of detail necessary to accomplish varying assignments? To stay competitive, smaller companies must employ business processes and information systems that are every bit as sophisticated as those used by larger corporations, despite not having comparable resources.



Mapping Software Selection to Business Strategy Helps Set Proper Expectations
A company embarking on an enterprise system search needs to ask itself continually, "When we look back on this a year from now, and we're successful at this, what are we seeing?" With a clear vision of what an organization wants to accomplish, management must then examine internal business processes, such as order processing, inventory procurement and labor scheduling, and prioritize changes according to the expected outcome. For example, companies may first want to implement job costing if gauging profitability is a priority. They may then want to add scheduling capabilities as the organization grows. This type of flexibility is a key component in keeping companies nimble.

In addition, one of the most important elements in a successful enterprise application implementation is cross-functional buy-in and management sponsorship. Without commitment from senior staff in all departments, it is difficult to change the behaviors of employees so they reap the benefits of their investment. A willingness to invest time in learning the system can result in a custom-configured system that is as robust as the organization needs it to be to automate its business processes.

Once implementation, training and ROI (return on investment) expectations are properly set, only then should a company apply the solution. In evaluating enterprise packages, an organization needs to make sure the software can adequately fit the business requirements it set out to fulfill. It's important that firms select technology partners with clear methodology and implementation plans, and vital that the company's goals have been clearly communicated to the vendor. With the proper business planning and examination of processes, even the smallest, most agile companies may make lucrative and robust enterprise application selections.



Custom Manufacturer Streamlines Production Flow to Increase Capacity
Harbinger Industries, an architectural woodworking company based in Minneapolis, MN, has followed these guidelines. Armed with a non-integrated enterprise planning system, Harbinger was faced with the challenge of constantly designing and manufacturing custom-ordered furniture and fixtures — such as banking display units or courtroom walls — without access to real-time, integrated production and financial data. The company's business operations were slow, cumbersome and incomplete — inhibiting their ability to grow and compete with larger organizations.

Harbinger's COO, Myron Buccek, recollects, "As a manufacturer, we needed a package that incorporated financial data with real-time information on operations, such as tracking the labor and materials spent on a given project and comparing it to the sales order to expose profitability." Harbinger implemented the MAS 90™ accounting package from Sage Software, integrated with JOB OPS Job Operations and Production System from BDO Seidman, to track resources, purchases and other costs while monitoring the status of each job through the production process.

Harbinger uses the system from order entry to fulfillment. The company can now create a budget, list the material requirements, set up a production schedule, and apply appropriate resources to completing jobs. Having spontaneous access to financial and operations data helps Harbinger manage custom assignments profitably, without disrupting the flow of business. Furthermore, the members of Harbinger's staff have become increasingly conscious of their interdependent, vital roles in the supply chain. Heightened awareness of the company's business processes and their reliance on one another has helped eliminate production bottlenecks, increasing capacity and ultimately, growing the business.



Keeping Small Manufacturers at the Heart of the Economy
Critical to the U.S. economy, small manufacturers produce more than half of all that is made by U.S. manufacturers. Therefore, being smaller doesn't mean that enterprise software needs are any less critical than those of larger firms. They're just different.

To sum up, the ability to operate lucratively in complex manufacturing environments is a challenge that can be addressed by implementing cost-effective enterprise business applications that are powerful, flexible and user-friendly. Specifically, what small- to mid-sized manufacturers are demanding from their ERP solutions is faster access to data, outstanding analysis tools, greater configurability, shorter implementation time, reduced maintenance, lower cost of ownership and quicker return on investment. Selecting cost-effective enterprise software that meets these criteria can help custom manufacturers increase productivity while keeping IT resource needs down, and enable them to adapt to ever-changing business requirements.