What are the Main Types of Manufacturing Software?
The software used in manufacturing industry applications can vary widely, based on the specific needs of your company. If your manufacturing operations are highly complex, or if your company has multiple product lines or production facilities, then it’s more likely you’ll need robust software that can handle those complexities. Smaller organizations with comparatively simple manufacturing processes may be better off with a smaller-scale ERP system that is easier to implement and use.
If your business serves specific sectors such as aerospace & defense, food & beverage, or high-tech manufacturing, then you may benefit from a manufacturing ERP system that’s designed to address industry-specific requirements.
Regardless of your company’s size or complexity, choosing the right manufacturing application software is a critically important decision. Manufacturing ERP software is a substantial investment, but if you select the right ERP and implementation partner, that investment can pay huge dividends, providing you with powerful tools to make your business more profitable.
What is manufacturing software?
ERP stands for “enterprise resource planning.” An ERP system is a single, comprehensive software package that enables an organization to manage financial accounting, sales, purchasing, supply chain logistics, human resources, and more, all in one place.
Not all ERP systems are necessarily designed well for manufacturing, though. Manufacturing ERP software addresses key business processes and business management requirements such as material requirements planning, labor, and production scheduling, raw materials supply chain management, and manufacturing operations. In other words, manufacturing ERP includes the capabilities that might otherwise be addressed by a manufacturing execution system (MES).
Everything within a manufacturing ERP system is interconnected, so you have all the information you need in one place. That gives you better control over the efficiency and profitability of your business.
When you place an order for raw materials, for example, you’re automatically recording information about the cost, quantity, and origin of those items. When you receive that shipment, your inventory quantities are automatically updated, and when you produce finished goods using those materials, your manufacturing ERP software can roll up the costs, combine them with labor costs and machine time, and calculate an accurate cost for the finished product.
That kind of information gives you better control over the efficiency and profitability of your manufacturing business.
What can manufacturing software help with?
Simply put, manufacturing ERP software helps businesses to plan more effectively, operate more efficiently, adapt quickly to change, improve customer satisfaction, and increase revenue. In today’s competitive global economy, manufacturing software has become a must-have for success.
Here are some of the things that manufacturing software can help with:
Understand what’s driving profitability: We often hear production managers complain that they don’t know which jobs and customers are profitable, versus which ones are not. A good manufacturing ERP system tracks all of your costs, from raw materials through every stage of manufacturing operations, to quality control. Armed with that information, managers are better equipped to make the right decisions to improve the bottom line.
Improve on-time delivery: There are a lot of dependencies in the manufacturing process. numerous factors contribute to the complexity, including long lead times for raw materials, production scheduling, labor constraints, and machine capacity. Manufacturing software manages all of these interdependencies and provides you with accurate information about schedules and timelines. That means better on-time delivery and more satisfied customers.
Eliminate manual processes: By automating business processes with manufacturing ERP, you can reduce costs and increase accuracy. If your manufacturing operations currently require paper-based processes or manual data entry, this will offer substantial savings, allowing your team to focus on higher-value activities.
Increase efficiency: Manufacturing ERP can help you reduce scrap, prevent spoilage of perishable inventory, and minimize defects. Perhaps even more importantly, manufacturing software can keep your shop floor operating at maximum capacity and efficiency.
Simplify compliance reporting: Legal and regulatory compliance requirements usually exist for good reasons, but they can nevertheless be onerous. Manufacturing software simplifies and streamlines compliance processes, providing you with faster and more accurate reporting. Audit processes go more smoothly as well, consuming far less time.
Gain new insights: In addition to understanding profit drivers, the best manufacturing software can also provide you powerful insights about your customers, product sales, and overhead. Powerful business intelligence gives you real-time information to help you to make data-driven decisions.
What are the main types of manufacturing software?
There are several ways to categorize manufacturing software. You might hear terms like ERP, MRP, MRP2, or manufacturing execution system (MES). In fact, there’s a great deal of overlap among these. They all help you run your business more efficiently.
As you consider which manufacturing software is right for your business, we recommend that you think in terms of the following categories:
General-purpose ERP: There are many ERP products on the market that claim to be suitable for manufacturing companies. Very often, however, these fall short of expectations because they’re designed for a broad range of industries, including retail, professional services, or wholesale distribution. In other words, they do a lot of things reasonably well, but they don’t necessarily support manufacturing companies effectively. We sometimes refer to these as “plain vanilla” ERP solutions. If your manufacturing operations are very simple, then general-purpose ERP software might be a reasonable fit. In the majority of cases, though, this category of software falls short of what manufacturing companies really need.
Process Manufacturing: Process manufacturing industries such as chemicals, pharmaceuticals, or oil & gas tend to have different needs than discrete manufacturing companies. Managing formulas and recipes, producing batches of product, and intensive quality and safety regulations result in a range of special requirements for process manufacturing companies. This type of software is specially designed to meet those needs.
Make-to-Order Manufacturing: Companies that produce products to meet certain customers’ specifications tend to have different priorities than companies that focus on producing goods for stock. Make-to-order manufacturing software addresses those specific needs with features like product configuration, for example.
Engineer-to-Order Manufacturing: For businesses that provide engineering & design services, ETO software provides detailed control over product revisions, change order management, CAD integration, and other features that these kinds of manufacturing companies require.
Make-to-Stock Manufacturing: If your company makes product for inventory that will be sold at a later date, then you’ll want to focus your attention on ERP software that supports common make-to-stock manufacturing operations.
Industry-Specific Manufacturing: Some industries have highly specific requirements that call for specialized vertical expertise. Aerospace & defense manufacturers, for example, may need to track “tail number effectivity”, which directly associates every part produced with the specific aircraft on which it is installed. A&D companies must also comply with stringent federal regulations with respect to cybersecurity, for example. Food & beverage or pharmaceutical companies, likewise, have unique requirements about lot tracking, FDA regulations, and product recalls. Industry-specific manufacturing software offers these capabilities out of the box.
How to choose the right manufacturing ERP system for your company
Although there is often some considerable overlap among the categories listed above, they serve well as a general guideline to narrow down your list of potential candidates. Ultimately, selecting the best manufacturing ERP system for your company is not as difficult as it might appear at first. Here are some tips for choosing the best solution for your company:
Focus on your most important business processes: Narrow your focus to the manufacturing ERP that performs those functions well. If FDA compliance is critical, for example, you’ll need to know that the software does a thorough job of handling lot and batch tracking, mock recalls, and audits.
Ask for references in your industry: Many ERP software vendors will claim they can accommodate your needs, but the true test is whether their system has been proven at companies with similar manufacturing operations. Talk to your peers and ask them what they’re using.
Find the right implementation partner: A good implementation partner can make all the difference in a successful ERP rollout. Look for a partner that will take the time to get to know your business, and who has experience manufacturing. Ask for references, and choose a company with a clear reputation for excellence.
Need help selecting an ERP system?
Synergy’s team of manufacturing ERP experts is here to help you select the system that will best meet your needs. We have deep experience in manufacturing ERP systems, including manufacturing industry expertise in aerospace & defense, industrial equipment & machinery, high tech & electronics, automotive, energy, medical device manufacturing, food & beverage, chemicals, and more.
To begin that conversation, reach out to our team of experts today. after we hear more about your goals and objectives, we can help you identify the right manufacturing ERP solution to fit your needs.