Key Software Challenges for a Manufacturing Start-up
This article is written by a manufacturer to manufacturers who want to avoid the pitfalls of overinvesting in expensive ERP systems.
Navigating in the manufacturing software landscape is challenging. The speed of technological changes means that the right path yesterday may not work today and could be a disaster by tomorrow.
Challenges and recommendations highlighted in this article are relevant to ambitious factory level start-ups but also to smaller workshops with perhaps less ambition for growth. This article focuses on business models with multi-channel sales approach combining traditional B2B sales with online sales via e-commerce platforms. An increasing number of new-generation manufacturers are looking to engage directly with end-customers instead of relying solely on agents and middlemen.
1. Getting various software applications talking to each other
The era of all-mighty we-can-do-it-all ERP business-suites is over. No software package today could provide all the functionality that a modern manufacturing requires. It is incomprehensible to think that a single software could incorporate CRM functionality of Salesforce, communication ease of Slack, file storage capabilities of Dropbox, e-commerce simplicity of Shopify, customer service functionality of Zendesk, accounting excellence of Xero and so on. The world is moving towards a microservice architecture where there is the best tool available for every function of your company. And thanks to cloud technologies for a fraction of a cost compared to old-school business-suite ERP systems. However, the trick is to get all applications to talk to each other seamlessly.
We recommend going with a cloud based MRP that manages your inventory and high-level production flow. Such MRP should have out-of-the-box integrations with leading accounting software, CRM systems, e-commerce platforms, as well as publicly available API documentation to avoid vendor-lock situations when building custom integrations. Such MRP should serve as a central hub for your IT eco-system and should manage the entire product and material flow. All the sales, accounting, customer support, marketing, business intelligence and other applications should communicate with the central MRP to provide a business suite-like experience while using ideal toolset for each separate function that your team loves.
2. Stop using spreadsheets and start using dedicated software
In manufacturing spreadsheet is your best friend, but also your worst enemy. Every manufacturing company out there has some process running on an Excel or Google Sheets spreadsheet somewhere. Spreadsheets are perfect for ad hoc analysis of a question based on a small dataset. It is also perfectly fine to run some auxiliary process on spreadsheets. But it is a growth killer to use spreadsheets in primary operations flow (sales, purchasing, inventory management and production). Sooner or later you end up with multiple versions of the same document and spend hours tracking a mysterious mistake in one of your many formulas.
People use spreadsheets because they are easy. People hate software that they don’t understand. When choosing between various applications for your company, try getting the ones that have high-quality product videos, well-written product manuals and responsive support team available. Also, choose software that has a free tier or free trial option and get as many people on your team as possible testing it for free before making a purchasing decision.
3. Keeping your team in sync
A modern manufacturing company typically uses multiple sales channels ranging from resellers to direct e-commerce sales. Moreover, manufacturers often combine make-to-order production flows with make-to-stock production. All this complexity means that manufacturing requires one single central point of truth where info from various sales channels is combined with order fulfillment and production status tracking.
We recommend using MRP as that central point of truth. If all team members can access information on sales order fulfillment together with process status of relevant material purchase and production execution orders, then the entire team has full transparency.
The challenges described above have inspired the team in Katana to build an ideal MRP system for a modern manufacturer. We have implemented the solutions offered in this article to our software package, and we want to contribute to achieving manufacturing excellence.
Find out more on our home page.