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4 pieces of ERP cost management advice

4 pieces of ERP cost management advice

For manufacturing and warehousing businesses considering going through an ERP implementation, the advantages are both plentiful and obvious.

There are cost savings to be had by optimizing operations on the factory floor and in inventory storage. Employees can be more efficient and productive through the use of ERP functions like barcode data collection and warehouse management systems, which reduce time-intensive manual processes and allow more to be accomplished during each worker's shift. Analysis of production and inventory counts can also provide benefits by creating greater insight into exactly what products should be focused on.

However, there are also problems that arise if ERP isn't organized, configured and introduced correctly. These concerns are avoidable but can cause serious problems if they aren't dealt with before the software is installed and operational. Here are four ways to keep ERP costs low and keep functionality high:

1. Select a good consultant and involve a variety of employees
SearchManufacturingERP advises businesses using a consultant to help in the implementation process to keep those consulting costs under control. While consultants can provide a wealth of experience and advice, the most useful organization insight can come for employees in the back office and on the factory floor. Create a group of employees that can communicate about potential areas of improvement and discuss possible needs for ERP. Consultants can instead focus on broader issues affecting the industry or help troubleshoot and fill in the gaps, keeping their costs low.

2. Decide what's needed before implementation begins
One way that ERP costs commonly exceed budgets is additions during or after the installation process. Businesses need to determine their needs ahead of time and present an explicit list of concern to potential vendors. This helps the provider offer the best match for functionality and reduces the possibility of major modifications or additions needed after the fact – changes that can seriously delay an ERP system's return on investment.

3. Use a modular ERP solution for targeted effectiveness
Companies that operate in the manufacturing and warehousing spheres have a wide range of needs depending on the industries and types of products they deal with. By using an ERP program like Microsoft Dynamics NAV, companies can match their needs to specific components that enhance functionality. By focusing spend on specific solutions instead of an all-in-one program that offers some functions of little value, businesses can keep costs low.

4. Don't let up during the final selection period
SpendMatters reports that many businesses can lose steam during the final phases of ERP selection because of the large amount of time they've already committed to the endeavor. However, businesses need to ask potential providers several important questions before choosing a system. Good vendors will be able to answer questions about licensing, continuing support and scheduled updates and modifications, helping businesses craft a better long-term picture of ERP costs and benefits.

Learn how to define your ERP strategy by downloading the white paper entitled "ERP in Manufacturing: Defining the ERP Strategy" from the DMS website today.

Posted in: Industrial Manufacturing, Warehouse Management

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