How To Choose A Right-sized Manufacturing System

Chapter 1 - What do I want to accomplish?

Explore the first great conversation you should have with yourself, your accountant, or your computer consultant in the process of finding a manufacturing control system that will fit your needs and budget.

The First Question

If you are like a lot of people, your first inquiry into the world of manufacturing software will likely be prompted by reading a whitepaper entitled something like “Double Your Profits By Going Lean” or “Get Total Control of Your Manufacturing In Just 60 Days” discussing some esoteric subject of manufacturing control. Attention grabbing headlines such as these are the darlings of editors bent on propping up pageviews. But, as you might expect, they never tell the whole story.

If you have a good relationship with your accountant or systems consultant, he or she may be the first to call you by saying “I read this article…I think we should look into getting some manufacturing software.” The accountant or consultant may have done some quick search of the Internet and have the names of a number of products they want you to investigate further. Product literature and demos are readily available online.

My recommendation at this point is to adopt a “go slow” approach and invite the consultant in for a discussion of your perceived needs and desired benefits. If the consultant is willing to offer free advice, then you should accept it.

When the meeting takes place, your consultant will likely plunk a handful of literature down on your desk and tell you about the one product he or she thinks looks most appealing. Rarely will the consultant come to the meeting with an unbiased point of view – or pose the most important question of all: “So, what do you want to accomplish?”

Many software developers rely on the influence of accountants and consultants in order to generate sales. Even if there is no business relationship between the consultant and the software firm, expect your consultant to exclaim about some whiz-bang feature they saw in an online demo. The “go slow” part of this phase of your inquiry keeps pointing back to “exactly how will that feature affect my business.”

Whether or not the consultant is successful in transferring their unbridled enthusiasm to you, the bottom line for your business is finding ways to increase the effectiveness and profitability of your manufacturing operation. It is time to put the literature aside and ask the hard question over and over again “So, what do I want to accomplish by implementing a manufacturing control system?”

Don’t be satisfied with sweeping generalities such as “control my inventory” or “get a bar coding system.” You must compile a very specific list of objectives – ones that can be accomplished in the context of the resources available to you.

A common objective, and a very achievable one, is to reduce your inventory holding costs. If you are sitting on an inventory of raw materials and WIP worth, say, $10,000 then shaving off 20% of that is only going to net you $2,000. At that rate, you’ll need several years to pay off a manufacturing software system costing $5,000.

On the other hand, if your inventory is worth closer to $1M, then paying $40,000 to reduce your inventory holding costs 20% is something you should have done yesterday!

Finding a “Right-sized” Solution

In the marketplace you will be able to find manufacturing software that costs just a few hundred dollars, manufacturing software that costs thousands of dollars, and manufacturing software that costs hundreds of thousands of dollars.

Is there a solution that fits both your needs and your budget? Most certainly, but finding it may require no small effort digging through hundreds of websites and sitting through product demonstrations.

Then how do you recognize a right-sized system?

Well, in general, you get what you pay for. Low cost software is often authored by small companies with just one or two programmers and support personnel. The makers of big, expensive manufacturing software will fly in their team of sales engineers, systems analysts, and support personnel. Somewhere between these extremes is a company and a software product that is right for your firm.