Selecting any software product is a challenge, one that is made more complicated by “background noise” like acronyms and industry buzzwords. Some companies hire consultants to help select an Enterprise Resource Planning (ERP) platform, but foundries and diecasters spend more time teaching the consultants the intricacies of the metalcasting business than reviewing ERP requirements. So how can a metalcaster select ERP software that matches its needs? It’s easier than it seems, but start from this premise: You need a software that eliminates information “islands” and allows your enterprise to make better decisions faster.
Every ERP buyer must justify a system purchase with a sound business rationale. Does your current system lack the functionality required to meet your company’s goals? Will a new system provide you with a justifiable return on investment?
No two foundries are the same, and there are many different metrics for measuring their success. Take the time to define what makes your metalcasting operation a success (on-time delivery? quality? low price?), and how you track and support that success. Identify the current operational requirements at the individual and departmental levels, as well as your major business process workflows (e.g., order process, shipping, certifications, etc.) as they exist right now. This should be the backbone of your ERP selection process, and also your primary target for improvement.
Determine success criteria — Once you define who you are, you can confirm the workflow bottlenecks. Recently I visited a metalcaster running a generic accounting package with roughly 15 spreadsheets. Once we mapped out their processes, the success criteria were easy to determine. The current system was a data-entry nightmare, with multiple people entering the same information over and over again. And of course, there were always human-error variances within the entered information. So, scheduling didn’t speak with inventory, costing was an island all by itself, and quality led the company in the number of spreadsheets.
In addition to identifying workflow bottlenecks, foundries and diecasters need to understand what they want to become. During the ERP product demos, the project success criteria should be at the top of everyone’s mind.
Selecting ERP vendors — The best resource available to metalcasters evaluating ERP suppliers is talking to other metalcasters. Ask what software they use, visit the operation to see the software in practice. Metalcasters may not share pricing or customer info, but typically they are open to collegial site visits.
Metalcasters have two options for ERP software — generic programs and industry-specific platforms.
• Generic ERP programs typically include a range of features and functions; the developers cater to every manufacturing need. When interviewing generic ERP vendors, be sure they understand what you mean by “surcharges,” “recipes,” how to schedule by flask, etc. If you don’t ask, you won’t understand what “out of the box” functionality means and what features will require modification. Keep in mind that modifications mean additional costs.
• Industry-specific ERP platforms. Over 20 years in the industry, I have learned that nothing stays the same. Twenty years ago, “shoot and ship” processes were the norm; now, just about every foundry has a machine shop on premises or a partnership with one. Then, data collection involved expensive devices that now seem clumsy. Today, iPads and portable devices are common. Let’s not forget the revolution of Cloud-based networking and data storage. Flexible software, including easy-to-design screens, dashboards and reports must be the standard, and it must adapt easily to operational changes.
Other areas on which to focus include: company longevity, size, financial strength, breadth of customer base, software flexibility, how often functionality is added to the software, and of course, technology.
Demo and references — Thankfully, we’re past the time of 12-hour demos; focus the demos on your project success criteria, using your data as needed. I recommend separating the demos into two visits, starting with a high-level overview with a detailed question and answer session. The second visit should be a deeper dive into details, and using the same project success criteria to see how to eliminate information silos by integrating different modules. Any questions that follow from this visit demo can be answered via webinars, teleconference, etc.
Ask ERP developers for a list of references you can talk to or visit. Bring along your “Project Success Criteria” plan, and any notes from demos and walk-throughs.
When the dust has settled, review your notes and how the software and vendor profile fits into your guidelines. And, once you have selected an ERP, your organization must commit to the implementation process - from top-level managers to training staff - to managing the change management. This will help to ensure a successful ERP implementation.
Matt Gacek is the Vice President for Business Development for B&L Information Systems. Contact him at [email protected], or visit www.blinfo.com