Four Must Haves in Manufacturing Software

Say you are a manufacturing company that has been running your business using spreadsheets and very basic off-the-shelf bookkeeping software. With the economy in a slow but steady defrost, perhaps you’re experiencing business growth, which in turn casts a glaring light on the shortcomings of your current business management software.

Now, let’s say you’ve also come to the conclusion that it’s time to invest in new business software. After all, you don’t want to be caught unprepared to handle the higher volume of orders when the economy finally does come back online in a big way. What you really want is integration between manufacturing and accounting. In fact, you’ve heard that integrating as much of your business as possible is a good thing as it will automate error-prone manual processes that often cost your company time and money to fix.

There’s a lot to consider when looking for manufacturing software. Indeed, it’s probably the single most important investment you will make in your business short of purchasing a major piece of manufacturing equipment, and possibly even more important in some respects.

So what are some of the Must Haves your new software should come with in order to make the software purchase worthwhile? Here is a list of some of the major functional Must Haves to add to your list before starting your research:

1. Bills of Materials (BOMs): If you’re coming from a spreadsheet environment, you’re probably used to creating BOMs in a spreadsheet. The ease of use of spreadsheets is a wonderful thing, but that convenience comes at a cost. A bona fide manufacturing solution allows you to store as many BOMs as you need, plus makes it easy to copy and manipulate them when creating new ones. Most manufacturing solutions take that functionality a step further by allowing you to import CAD drawings from popular CAD software to automatically create a BOM based off the drawing. That’s a time-savings well worth the cost of a software upgrade! A final word of advice on BOMs, make sure any manufacturing software you purchase allows for multiple levels within the BOM as you may need to add sub-assemblies that themselves require a separate build before getting rolled up into the final product.
2. Manufacturing Requirements Planning: Also called MRP for short, this functionality will save you time and inventory purchasing headaches. A good manufacturing software package will look at all current inventory levels, upcoming sales orders, then factor in seasonality of sales to determine what kind of inventory  purchases the company should plan to make and when. The manufacturing system will even allow you to place those orders through integration with a purchase order module that will ultimately create purchase orders with your preferred vendors. MRP not only keeps you from running out of critical raw materials but it also saves you time and reduces the risk of ordering incorrect items and quantities. MRP is well worth the required investment and should be one of the first things you look closely at when purchasing new manufacturing software.
3. Inventory Control: Okay, it’s sort of a given, but it’s still worth mentioning. One of the big reasons companies buy manufacturing software is to gain control over inventory. Many companies running a simple bookkeeping system and spreadsheets have difficulty tracking inventory — from raw material usage and work-in-process to scrap and finished goods. The reason why is pretty simple: there is often no comprehensive integration between entry-level bookkeeping software and most manufacturing software, let alone integration to a spreadsheet! Integration between inventory control, purchase orders, manufacturing and sales guarantees a much higher level of control over manufacturing. Inventory control greatly reduces the chance of running out of raw materials in advance of a big order; it gives your sales team more accurate visibility to finished goods so they don’t have to constantly walk to a warehouse and check stock levels [believe me, I’ve seen it happen plenty of times!]; it allows you to keep lower inventory levels to reduce carrying costs and operate more leanly. In case it hasn’t sunk in yet, good inventory control is a must-have for any manufacturing software package. Be sure to “kick the tires” on that item thoroughly before you buy!
4. Serial / Lot Tracking: Not a must have for every manufacturing company, but if you produce anything that might have to be recalled at some point, then this feature is an absolute requirement of doing business. Manufacturers of food or food related products such as processed food, food containers or to-go bags must be able to track all orders by lot number to make it easier to manage product recalls by customer and order. Technology manufacturers almost always provide a serial number for each product sold to manage product failures. If a part that went into a finished product goes bad then having serial numbers greatly helps the recall and repair process. After all, it’s all about efficient management of your products before and after they leave the factory, right? Bottom-line, the company that’s best prepared to deal with unforeseen events will be better perceived by customers and reduce the overall damage to its bottom-line.

So there you have it! My take on manufacturing Must Haves for companies looking to update their operational and financial processes for the 21st century. What do you think? Are there some Must Haves that would tip the balance in favor of one manufacturing software application over another for your company? Why not jot your ideas down and share with the others?

About the Author

Dave is a former fiction writer turned CPA and technology consultant. He founded The Sage Closer to help Sage business partners with their PR and marketing communication needs.