Insights from Orion Group

3 Signs You Need an ERP System

People have been manufacturing things for a long time. Henry Ford was successful making his Model T’s without the need for computer systems. As a matter of fact, your brother-in-law may boast that his widget company is doing great with spreadsheets and handwritten ledgers even today.

There are entry-level software systems that can take your company even further, creating professional-looking invoices and purchase orders and giving you just the information your CPA needs at the end of the month/year. The outside world sees these documents and thinks you are doing great – and maybe you are. But, the day is going to come when that entry-level software and spreadsheets will start to hold your company back.

So, how will you know it’s time to ditch the piecemeal tools and take the plunge to implement a fully integrated software package? The following are 3 signs that will let you know for sure it is time to move to a more robust software solution such as an Enterprise Resource Planning system, or ERP. Some of these signs may seem obvious, but they creep up slowly and you may not realize that you are living them from day to day!

Inventory Levels are Unreliable
Ouch, right? There is no doubt that great employees will handle this problem on their own. They will create complicated spreadsheets that tell them what they have in stock, what is to be used, and calculate what needs to be purchased. They will go out on the shop floor every day and survey your stock levels to make sure you are on track. They will purchase excess inventory of your most critical parts to make sure you never run out. Then, they go on vacation!

Data Errors
When your company is using entry level software and spreadsheets, it is a good bet that they are also rekeying information in multiple places. One person is creating a quote for your customer. Then, when it is approved, another person is entering the order into your software system. Hopefully those will match, but what is next? Someone needs to then add this order to the production schedule. Do you have a bill of material in a different spreadsheet or system? Are there different revision levels? Did the correct quantity follow through? What about the due dates? We haven’t even thought about the purchasing side of the house! Great employees will learn where the errors tend to occur and they will double and triple check their work (and everyone else’s). You might be lucky enough to have a “computer guy” that can manipulate some data to help with the problem. Then, your computer guy quits or retires!

Customer Satisfaction
Customer satisfaction is the life blood of any business. Successful businesses put customer satisfaction at the top of their priority list. But happy customers aren’t the result of a smile and a handshake. They’re the result of meeting your commitments 100% of the time while charging a competitive price. Satisfied customers are also the result of being able to answer their questions quickly and efficiently. “I’ll check and call you back” is a very frustrating answer for a customer that needs an answer now. Businesses that operate inefficiently can’t meet customer needs all the time and make a profit.

When inventory levels don’t match demand and data errors occur frequently, customer satisfaction is sure to suffer. Lose enough customers, lose your business. An integrated ERP package is no panacea for success. What it can do for you however, is provide an integrated data set via a single database that will provide reliable inventory management data for solid forecasting. It also provides automatic data integrity checks for validation and accuracy. Better forecasting and reliable data can take you a long way to keeping your customers coming back for more!

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