ERP For The Little Guys

A tale of two shops

Two manufacturing companies, one small and one mid-sized, discover a better way to manage their operations

BY Tim Wilson ON November 12, 2010 10:27am

Enterprise resource planning (ERP) surged in the early 1990s, as big software vendors took advantage of emerging client server environments to integrate business processes. Manufacturing was an important part of this story, with shop floor software increasingly integrated with financials and the supply chain. Back then there were many “home grown” applications for manufacturing resource planning (MRP) that were written in-house, as well as a wide range of independent software vendors (ISVs).

But ERP was never one-size fits all, and many manufacturers had nightmare stories of implementations gone awry, runaway costs, poor performance, and, perhaps most common, a need for ongoing maintenance and support that tied manufacturers into expensive support contracts. In these instances, manufacturers found themselves trapped: they were dependent on software that was tied to heavy costs and poor performance.

Now, in 2010, things are much brighter. ERP vendors have consolidated, with big players like Microsoft, SAP, Oracle, and IBM getting serious about the mid-market. As well, some smaller ISVs are still flourishing. This article is a “tale of two shops,” one small, one mid-size, that have both embraced the same ERP/MRP solution from a Canadian ISV named IntegrateIT.

The vendor and the software
Headquartered in Kitchener, ON, IntegrateIT is an independent ERP software vendor that focuses exclusively on the sales, distribution, implementation and support of its product, ERP123.  The company is made up of business managers with software design and implementation capabilities, as well as manufacturing and distribution expertise. As a software suite, ERP123 is delivered within a service offering that includes project management, implementation, site-training, and integration with legacy applications.

Included in the purchase, and at the core of ERP123, are integrated tools for inventory management, sales, production management, and finance/accounting. IntegrateIT argues that these capabilities can work alongside the legacy applications that make a company unique. It makes sense, as often custom code is written to address the competitive requirements of a specific manufacturer.

Power to the little guy
One example of an IntegrateIT customer that can provide some insight into the challenges associated with ERP—particularly for a smaller shop—is Weber’s Fabricating in St Jacobs, ON. Begun in 1974 by Clare Weber, Weber’s Fabricating is a custom metal fabricator, providing products and services for commercial, industrial and farm applications.

“Our use of computing technology goes back to 1984 when we purchased a CNC punch press and a Tandy 4 computer from Radio Shack,” says Weber. “Over time things got faster and the memory got bigger, but it was always a challenge for us to figure out the cost of materials.”

Over time Weber had a local computer teacher write software in BASIC to track part numbers and prices, which worked well. The company then engaged consulting firm Coopers and Lybrand to write some software in dBase, but the price was prohibitive, so Weber had someone train him to write software in Clipper (another computer language).

“Then we bit the bullet and bought Windows software,” says Weber, “which allowed us to advance to ERP123. It is intended to do everything, from manufacturing control, purchasing, and accounting, the whole ball of wax—and that’s what it does.”

But there have been challenges, too, mostly related to two constraining factors: the size of the company, and number of custom jobs required.

“We are a custom metal fabricating shop,” says Weber. “We do five or ten fuel tanks a week, repair work, welding, roofing, hatches for water tanks—all-in-all we are eighteen people.”

As a result, Weber says that his company will never be able to use all of ERP 123’s capabilities, particularly for scheduling and production work.

http://www.canadianmanufacturing.com/metalworking/quality/a-tale-of-two-shops-15084