It has been estimated that approximately 175,000 US base Manufacturing companies do not utilize a ERP system. This could be because of cost, it could be the size of the company, there could be many reasons not to use an ERP system for your companies operational control and data collection.
When do you know it might be time to get an ERP system in place? When does it make sense?
It isn't at al number of people, or size of the company, or even revenue based, like you might think. It isn't even reserved for companies who have been in business a while. There are some red flags that might help provide indications that you could benefit from using a ERP system.
1. Duplication of data entry.
If you are having to enter the same data in multiple locations or various systems such as spreadsheets, outlook, or accounting software. You might be a good candidate for an ERP.
2. Errors
Do you have more instances of missing information. Double ordering inventory items, not ordering inventory items. Not knowing where something went to, after it arrived. Potentially numbers transposed on data entry. If you are experiencing this, then you would absolutely benefit from an ERP system.
3. Multiple Systems
If you are using spreadsheets, post-it-notes, an address book, whiteboard, or even a key employee's memory to "just know" where things are at, and what is being produced today. Then you really should think about an ERP. Multiple system processes, or key people reliance hinder growth, and immediately create the opportunity for the first two red flags to occur.
What holds companies back from getting an ERP in place.
There are three main things that hold companies back.
1. Cost
Even though many platforms are affordable to get and operate as low as $35 to $40 per user which keeps it affordable in terms of operations, and very scalable as a company grows. The real cost of a proper implementation can hold people back. For manufacturing either the manufacturer or consulting company will be charge between $25,000.00 and $50,0000 or more depending upon how much needs to be altered or customized to meet the needs of the company.
2. Fear of the Unknown
Will it make that much difference? What if the employees don't like it? Is it worth the risk? Overcoming these kinds of issues is always a risk with any new thing, any new system. Can you show your team how this will be better. Can you show the team what the cost of not having an ERP has been.
3. Usability
Can my employees learn it easily? Can they use it easily? Will it actually increase productivity? There are never guarantees with systems like this. It comes down to your companies corporate culture, the level of involvement and commitment each employee has to the success of the company. You don't have to have a specific corporate culture for an ERP to be successful, but reluctant and resistant employees or corporate culture are more difficult to implement ERPs in.
Benefits of the ERP