The Best Manufacturing ERP Software for Your Small Business

Finding the right ERP software for your small manufacturing business is crucial to your efficiency and growth for a number of reasons. The right ERP system can help transform supply chains by providing visibility, automation, and control like never before, and can help rapidly scale your brand and optimize current systems without a huge spend. Almost every aspect of small manufacturing business can benefit from enterprise resource planning (ERP) software, which streamlines many facets of your company within a single program, including:

• Inventory and materials management
• Manufacturing and warehouse management
• Centralized data collection and analytics
• Accounting, finances, taxes, and reporting
• Production management and scheduling
• Sales, marketing, and operations

ERP systems can work wonders, but many small businesses tend to dread the idea of scouting and implementing new technology. With so many diverse and complex manufacturing-specific systems, which one ERP is best for your small business? In this guide, we’ll help you understand a few core considerations of choosing a new ERP software, with advice tailored specifically to small businesses across multiple manufacturing industries. Additionally, you can reference our Manufacturing ERP Systems Buyers Guide.

Before we get into the details, let’s cover a little bit about the benefits of good manufacturing software. Of course, the primary reason for switching to one of the top ERP systems is financial management. Indeed, the right system will provide you with measurable cost-saving capabilities while simultaneously helping to optimize your business processes, making them more efficient and economical than ever. But there’s much more to the story. Here are some compelling reasons to upgrade to ERP software: 

ERP Provides Real-Time Data 

Analytics are vital to any industry that wishes to adapt to the ever-changing needs of the consumer and the industry. One of the best parts about a good ERP is that it tracks data across many departments that you probably currently treat as separate entities, providing you with in-depth analytics so that you can tweak as needed to get the best possible results. This also helps you see how different functions affect one another.

ERP Enhances Customer Service

One of the things that many small businesses notice right away when starting out with an ERP is accuracy. With detailed visibility of inventory, materials, progress, scheduling, and shipping, there’s a much lower risk of error and disgruntled customers. Did you know that 90% of online consumers, according to a recent study by Business Wire, actively monitor their shipment status daily? The right ERP software can provide you with accurate, automated order tracking for a happier consumer experience, not to mention accurate inventory updates.

ERP Reduces Costs

All of these benefits work together towards one main goal — cost savings. A well-chosen ERP can save you money by reducing error, keeping customers happy, preventing inventory surplus or deficit, tracking expenses and write-offs, and reducing operational costs by automating and monitoring all of your company’s finances. Of course, a system that saves you and your employees time will also save you big bucks by allowing you to allocate labor elsewhere.

ERP Helps Grow Your Business

At the end of the day, growing companies need more of everything, including labor, warehouse space, time, and marketing. Most manufacturing software solutions work hard to optimize what you’ve already got and make space for more. For example, the right ERP could help you take advantage of your warehouse space so that you can store more goods without having to extend your facility’s footprint or invest in more storage. In short, they’re all designed for scaling businesses.

ERP Streamlines and Simplifies

Offering a real-time view of all your main processes under a single system, an ERP platform streamlines and simplifies many of your company’s operations. For many businesses, this means downsizing from various software solutions to a single one that puts all your primary functions under one umbrella. It also creates a central, company-wide hub that requires only a single software training for all departments. 

Ask yourself: How Am I Currently Managing My Business?

Did you know that over 70% of small manufacturers plan to make technological investments in 2022 to improve business processes and efficiencies? Many seeking to implement a new ERP system are doing so to replace their own homegrown systems. If you’re looking for a more advanced, tailorable solution that goes beyond QuickBooks, Excel, and other programs that you’ve grown out of, now is the time to implement ERP software. The good news is that most of these ERP products are set up to help you transition from more basic and limited solutions to full-featured ERPs, so your current system will help you decide which software is best. 

For example, when switching from QuickBooks to ERP, you’ll want to select software that’s compatible with QuickBooks, so you don’t have to spend a ton of time rebuilding databases from scratch. Note that various systems make switching from Excel to ERP a breeze. If you want to maintain any current databases or historical data, make sure that you choose an option designed to make the transition as simple as possible, specifically for Excel users.

Ask yourself: What is My Manufacturing Mode?

To narrow down your selection even further, it helps to select your software by the manufacturing process. There are ERP solutions that are engineered specifically for precise manufacturing modes, such as discrete, process, and mixed-mode manufacturing, as well as a light assembly (kitting), professional services, engineering to order (ETO), make to order (MTO), repetitive (make to stock), job shop (shop floor) and industrial or wholesale distribution. 

While choosing software that is not mode-specific may work just fine, depending on your specific business and industry, it does help if you have unique tools that support your manufacturing mode. For example, if your company practices process manufacturing, your ERP should have additional management functions that help you plan, sort, and produce formula-based goods, with additional solutions to simplify process-specific requirements, such as lot-traceability and meeting federal compliance standards. Another example would be companies in the Metal Fabrication industry searching for Steel ERP related features.

Ask yourself: What Are the Specific Considerations of My Industry?

In addition to manufacturing mode, ERP systems are also categorized by the industry in which they serve. Again, this can help simplify certain company-specific considerations — for many businesses, the primary considerations here are industry regulations, security needs, and safety laws — to help ensure that every industry challenge is taken into account with your software selection. For example, if your business specializes in producing parts for the aerospace industry, you’ll have to consider many things that may not affect businesses in other industries, such as compliance with ISO AS9100 standards.

While just about every industry should consider selecting software that has been developed specifically for their realm, it’s more important for some than others. Those in aerospace and defense, agriculture, automotive, chemicals, food and beverage, consumer packaged goods, product manufacturing, energy, health and medical devices, petroleum and coal, industrial machinery, transportation, pharmaceuticals, and biotech should take special consideration in choosing industry-centric ERPs to ensure compliance and safety across all processes.

Finally, you need to determine a budget for your ERP. This sounds simple enough, but costs can be somewhat deceptive in any major software integration. What may seem like cheap ERP software now, may cost you in the long run. What you really should be considering is the ROI of your ERP. The up-front cost of manufacturing software implementation varies widely, from $4,000 to over $1 million, but this isn’t the cost you should be concerned with. Instead, you should think about the up-front spend minus your potential returns to determine the ROI of the transition. See our ERP pricing guide to learn about all the cost factors of implementing an ERP system. It’s also helpful to understand the different ERP tiers, generally, small businesses will be looking for tier 3, or tier 2 ERP software.

One of the big things small businesses need to consider cost-wise is licensing. There are two primary types of license fees when it comes to ERPs — on-premise ERP (typically paid with a large, one-time licensing fee) or cloud-based/SaaS ERPs (typically paid for on a per-user, per-month basis). Because they’re paid per user, cloud-based ERPs are often a smarter, more cost-effective solution for companies that have fewer employees or who only need to give out licenses to a small group of workers. Both options should accommodate for scale, should your business need room to grow.

As you can see, selecting the right ERP is a complex but critical business decision. There is no one-size-fits-all approach to finding the perfect manufacturing software. However, we have compiled some of our most popular and flexible ERP systems for small businesses worth considering. 

It’s important to note that all these solutions can be licensed either on-premise or on the cloud. We are showcasing them as cloud-based (SaaS) systems as it typically suits smaller businesses better.

We hope that after giving all of these considerations some thought, you’ll be nearer to making a decision on which ERP to choose. With that said, we know that this guide isn’t all-encompassing, so we offer an assortment of tools that make the selection process a breeze. We invite you to use our Best-Fit Comparison Tool to be paired with the top software based on a certain set of criteria. 

Here at Top10ERP, we’re happy to help you with your selection process and offer customized recommendations directly from our trusted advisors. It can be very helpful to speak with an experienced advisor to learn better which specific systems fit your individual business goals and processes. What’s more, we truly enjoy speaking with the many manufacturers who trust our advice, as we are always learning more about what is impacting industries during a constantly changing world of manufacturing. Please let us know what further we can provide you throughout your search.

The journey to integrating an ERP system into your business operations goes beyond merely choosing the right software. A critical and often underestimated phase is the implementation process. The duration of ERP implementations can vary widely depending on the complexity of the software, the size of your business, and the specific customization required. Typically, implementations for small businesses might range from a few weeks to several months. In some intricate scenarios, it could even span over a year. This timeframe is an essential consideration as it affects business continuity and resource allocation. 

But the time invested in implementation can yield dividends only if coupled with comprehensive training. Here’s where vendor-provided training becomes invaluable. Transitioning to a new ERP system is not merely a technical shift; it’s a transformative process that impacts every facet of how employees conduct daily tasks. Proper training ensures that employees don’t just understand the software but will leverage it to optimize their operations, leading to heightened productivity and minimized errors.