A strong ERP system can be the most important technology in a manufacturing environment. In today's shaky economy, however, it's crucial for IT managers to do their homework before investing in expensive new software. In this guide to making a manufacturing ERP business case, you'll find an introduction to ERP in manufacturing, learn the difference between ERP and MRP, discover ERP software selection and ROI evaluation tips, read about the benefits of Software as a Service (SaaS) ERP and more.
Browse all of the sections of this building a business case for manufacturing ERP software guide, or jump directly to the section that interests you most:
- Introduction to ERP in manufacturing
- Understanding the difference between MRP and ERP systems
- Manufacturing ERP software selection and implementation in a down economy
- Evaluating the ROI of ERP software
- ERP seen as important tool in manufacturing and globalization efforts
- Is SaaS ERP a viable model for manufacturing?
Today's ERP systems have evolved from the MRP systems of the past. These manufacturing ERP systems integrate all business operations including design, quotation, sales order, material requisition plan, purchasing, production planning, manufacturing process control, inventory control, shipping and logistics. In this introduction to ERP, you'll learn how ERP systems work in manufacturing. ERP systems also serve as a company's centralized global database so that every location uses the same system to track inventory.
Today's ERP systems evolved from yesterday's manufacturing resource planning (MRP) systems. The key to understanding the MRP vs. ERP is tracing the evolution of both types of software systems from material requirements planning. Material requirements planning evolved into manufacturing resource planning -- or MRP II -- because manufacturers realized the need for the system to reach broader aspects within the company.
Selecting and implementing manufacturing ERP software is especially challenging during tough economic times. In this interview with expert Ray Wang, money-saving tips and ERP strategies to get the most out of your investment are highlighted. Wang explains how to review your ERP vendor options and determine if open source ERP or SaaS ERP would work for your business.
Manufacturing ERP systems can bring in many benefits, but if money is tight, it's important to evaluate whether this software would be a sound investment. In this Ask the Expert response, Ray Wang offers tips for estimating the ROI of ERP implementation. You'll find out how to determine the value of an ERP system implementation, estimate payback periods and identify business changes.
Many manufacturers are contending with growing pressure to globalize their operations. Globalization has been a force to reckon with for many manufacturing companies, revealing both complex challenges and lucrative opportunities. Two of the biggest challenges of manufacturing globalization are effectively competing in the increasingly crowded global market and coping with a rapidly accelerating rate of change. Manufacturers are all looking to get an edge on the global competition, and many turning to ERP software systems to make this happen.
Interest in Software as a Service (SaaS) models has been increasing across industries. SaaS is especially attractive for smaller businesses, as it eliminates both costly software implementations and the storage and staff needed to maintain that software. But whether SaaS ERP works well in manufacturing is open to debate. There are pros and cons to using SaaS ERP in manufacturing environments; whether the pros outweigh the cons depends on individual business needs.
This was first published in February 2010