Homegrown Software? ERP or MES? How do I know which is the right solution for us?
The process manufacturing industry is a unique one in the sense that it provides so much for the manufacturing industry in its entirety, but seldom gets recognized for these critical jobs. When service providers such as powder coaters and metal finishers as well as parts manufacturers seek a software solution to button up their operations with better workflows and data, it’s easy to get lost in the options.
Some plants outsource developers to design a custom-made solution, specific to their needs… but they end up with improvements that can’t be made or an outdated, underutilized solution that gathers dust. Alternatively, some manufacturers seek the latest and greatest in enterprise resource planning (ERP) or manufacturing execution systems (MES) but grow tired of the lack of customization and customer service. When identifying the least expensive options, job shops secure the basic functions while still exploring paper trails and redundant data entry.
Job shop owners and operators want to run their shops more efficiently. They want full control of their expenses and throughput but without technology and data, they are running their shop with the lights off. Let’s evaluate the difference between choosing an ERP, MES or homegrown solution for your process manufacturing facility.
What sets the process manufacturing industry apart?
As mentioned above, these industries are part service providers and part manufacturing. Since they typically have a wide variety of customers, parts, and processes, their daily work volume is very high. Many orders per day make tracking orders impossible without an MES or ERP which is why so many job shops are frustrated with paper processes and excel spreadsheets.
In these dynamic environments, labor tends to be the largest cost driver, and cost can vary wildly from part to part, with no way to track it. Additionally, high operator turnover means constantly training new team members how to rack, paint, load, mask, etc. To summarize, these process manufacturers have unique operations which require dynamic, reliable, easy, and fast solutions to maximize throughput.
Why out-of-box-ERPs don’t work:
Enterprise Resource Planning technology has come a long way and deserves a lot of credit for the issues it solves. However, there are many shortcomings when launching an ERP or MES in process manufacturing environments. For example:
- Not specifically set up for finishing projects and tasks
- Possible to use for the front office, impossible to use on the plant floor (where it matters most)
- Very little production data
- Little to no job cost data
- Not set up to replicate racking, and other nuanced production techniques
- ERP and MES options are high friction, not suited for fast-paced finishing
- System STILL relies on paper, driving data entry and eliminating valuable insight
Another element that should be recognized is that ERP Customer Support is notorious for being technology driven/focused without knowledge of the specific industry. Customer support is generally outsourced or managed via a call center without direct communication options for issue resolution. This means issues can last days, weeks, or indefinitely due to a lack of support resources.
Why homemade/in-house software doesn’t work:
Those who ride the “customization is key” bus need to get off before the cost of updates, customization, and cyber security risks break the bank. Homegrown software has its benefits as well, but there are also many shortcomings to in-house software, such as:
- Maintaining reliable software is a liability
- Single point of failure if an individual quits
- Hiring a new developer takes months (if the new developer can understand the code at all)
- Maintaining your own servers is a liability
- Cybersecurity is a massive liability
- Your business is much less attractive to prospective customers with in-house software (less trust)
- User experience is typically terrible dragging on current employees and putting off new ones
- The cost of custom software is very high
- Typically does not offer robust, secure, remote access
- When it comes time to sell your business, a new buyer may not look favorably upon your creation
The Importance of Job Costing in Manufacturing Software
In a chaotic environment with lots of labor and many jobs, everything possible should be monitored. Variable Labor Cost is the most important to track by identifying what your labor worked on and how much revenue it procured.
Take job costing in powder coating for example. Variable labor cost includes:
- Masking
- Plugging
- Packaging
- Racking
- Quantity of operators working an automatic line
- Inspection
- Shipping
- Customer Communication
Understanding the time it takes in each phase of the manufacturing process will allow you to understand the cost for each job performed to better understand your profit margins. If this information isn’t directly calculated for each customer, you are unknowingly causing a leak in your profits from customer to customer. This is data that isn’t generally available in an ERP or MES and is a complex afterthought when building an in-house solution.
How Steelhead is Uniquely Equipped to Service This Industry
Steelhead is specifically designed for the processing industry because it is designed from the ground up to provide granular, actionable insights without being difficult to use. Features like Work Boards provide an interface that is so simple that operators can be trained in just a few minutes, often while they smile with excitement knowing just how easy their job is about to get.
Automated features like Quoting, Reporting, and Capacity Planning drive the right information to the right people in real-time. This frees up time in your day to run your shop and provides actionable information when needed, not weeks later. Features like Racking enable various parts to be worked together without 10 clicks to process the parts. Job Costing is built specifically to replicate cost drivers found in finishing shops, and is done automatically, so people are not entering in time against jobs all day long. Dynamic Work Instructions provide new hires with pinpoint instruction, improving quality and saving time.
Steelhead is a customizable platform built to match your job shop’s operations, not the other way around. Don’t believe us? Reach out today for a no-obligation plant management consultation.
ERP or MES or In-House Software?
