April 16, 2021
Manufacturing ERP software: selection criteria and top vendors
Digital Enterprise Researcher
Now well-recognized and sought-after across domains, enterprise resource planning systems, or ERPs, originated in the manufacturing industry as early as the 1960s and still show high adoption rates there.
With the proven capacity to enhance workflow visibility, streamline asset and resource management, and deliver real-time reports that support data-driven decision-making, this long-lived software still proves relevant in the manufacturing landscape of today. Eager to remain competitive, many modern manufacturers decide in favor of ERP implementation.
Besides first-time adopters, there are enterprises intent on replacing their legacy homegrown and often botched software with a modern robust ERP platform.
Owing to the solution's central role in manufacturing enterprises, stakeholders should make a reasonable and well-grounded ERP vendor choice. Specialized in ERP consulting, we will help future adopters navigate the burgeoning market by outlining valid but often overlooked selection criteria and surveying the most prominent manufacturing ERP solutions.
Functionality is the most obvious selection criteria for ERP, and rightfully so. But when it comes to industry-specific ERP platforms, feature sets often look identical. Thus, for the choice to be more reasonable and nuanced, stakeholders need to consider other important aspects of ERPs, outlined below.
Your future manufacturing ERP’s deployment model is the first and foremost consideration. There are fundamental differences between cloud and on-premises ERPs—in their environments, pricing models, maintenance needs, and levels of security.
Installed and managed in an enterprise’s own IT infrastructure, on-premises ERP provides owners with full control over its operation and the freedom to customize, configure, and protect it as they see fit—all under their own steam, though, so an in-house IT team is a must in this scenario. Beyond that, you need to be prepared for large upfront licensing and implementation costs.
Driven by the need for unlimited storage space, flexibility, and mobility that emerged from the Industry 4.0 transformation, many manufacturers today opt for cloud-based ERPs instead. They are scalable and customizable on-demand, accessible anytime, anywhere, come equipped with necessary security controls, and cost a moderate monthly fee. On the other hand, a public cloud infrastructure is hackable by nature and vulnerable to downtimes, so manufacturing companies having sensitive data and trade secrets usually opt for costlier but more secure private clouds.
Hybrid ERPs combining on-premises and cloud features are the option for forward-thinking manufacturers to resolve this conundrum. Choosing to keep the most sensitive data and operations on-premises and hosting less critical business processes in the cloud, you can tailor the infrastructure to individual needs and financial capacity while having the best of both worlds.
Scalability is another criteria manufacturers need to consider from multiple angles. First, it’s about the extent to which an IT infrastructure can scale up, how much it will cost, and what new maintenance efforts it will demand. Another feature to keep in mind is the ease of integration and customization—do new features require development or are they plug-and-play?
If you plan to expand to foreign markets, then it’s also critical to choose an ERP that supports global growth, such as by complying with international financial and legal requirements, tax rules, and supporting localization.
Last but not least, try to gauge the ERP software vendor’s outlook towards their platform’s growth and improvement. If they don’t seem to keep up with the trends, there is a risk your enterprise will outgrow the ERP’s capabilities.
A hub for all business and production data, an ERP needs to be well integrated with the rest of your manufacturing IT infrastructure to bring the intended benefits. On this account, the solution’s ability to connect and synchronize with legacy software emerges as a viable selection requirement.
Depending on a ERP’s default features, integration can be carried out in several distinct ways. Some vendors offer dedicated integration tools for adopting enterprises to carry it out themselves. Other ERPs come with default APIs, and although integration through them would still require handiwork, this is a realistic task for in-house IT teams.
If a platform offers neither integration routes, manufacturers will need to build a custom integration adapter or application for each tool they want to synchronize with the ERP. In this case, the process may prove lengthy and require specialized expertise.
Another important consideration is ERP integration with EDI, which is commonly utilized in the manufacturing industry for exchanging business documents with suppliers and customers. To prevent duplicated work and overlapping data, the systems need to be tied together. So when choosing an ERP, pay heed to its in-built EDI connectors or integration modules.
The modern industrial landscape of the increasing geographic distribution of manufacturing operations and the shift to partially remote work, puts a premium on reporting and real-time data accessibility. Thus, when deciding on your future ERP platform, look into its mobile capabilities and how well they meet your requirements.
Apart from the fact that not all vendors have a proprietary mobile app, it is worth noting that ERP applications may differ in feature variety from their desktop versions and have ranging customization opportunities as well as hardware and software compatibility.
The ERP price is a primary consideration for future adopters, but in practice the system’s total cost often goes far beyond initial expectations. This is why decision-makers need to look at ERP implementation more broadly and factor in numerous cost items.
In addition to ERP licensing fees, manufacturers also need to make allowances for the required hardware and user licenses together with the implementation, customization, and data migration resources needed. Whether the vendor offers their assistance or ready-made tools for the initial setup or not will make a big difference in terms of final costs.
Operating costs, including additional user licenses, admin and support costs, additional integrations, and security provisions, should also be given due consideration.
Over and above, assess the expertise of your in-house IT team related to ERP maintenance, upscaling, and customization. Will your specialists be able to keep the system up and running, prevent potential downtimes and security issues, or will you need to hire extra hands or even outsource the task to external ERP developers? The cost of external assistance may vary significantly from solution to solution and should be taken into account, together with the gamut of IT outsourcing risks.
With the key selection criteria outlined, now it’s time we dug deeper into manufacturing ERP platforms. Below, we survey three most prominent ERP software for manufacturing and outline their specific features, strengths, and downsides.
Founded in 2008, Acumatica has since established itself as a leading cloud ERP solution, and is highly prized for its flexibility and adaptability. Itransition has been Acumatica’s partner since 2013, with our certified team of Acumatica developers helping our customers get the most out of this platform.
Acumatica offers the standardized General Business Edition, customizable with official modules, as well as industry-specific versions with wider and more focused feature sets: Distribution, Commerce, Construction, and Manufacturing Editions.
What also sets Acumatica apart is deployment flexibility. Providing two cloud deployment models, SaaS and private cloud, the company allows their customers to switch from one to another on the fly and without any penalties. Last but not least, the platform has fully-featured native iOS and Android mobile apps to allow for complete remote access and management.
Feature-rich, versatile, value-oriented, Acumatica has been rightly ranked highest in customer satisfaction among ERP platforms by G2 for several years in a row:
The Acumatica Manufacturing Edition ERP is a multi-site manufacturing control and planning system. The software supports manufacturing methodologies of all shapes and sizes, from make-to-stock and make-to-order to batch and repetitive manufacturing, lending itself well to enterprises across industry sectors and business models.
The Manufacturing Edition comprises features for monitoring orders, schedules, and material plans, tracking material and labor costs, and assessing production performance together with time tracking, order and inventory management.
To fully fit the ERP’s functionality to their particular needs, manufacturers can choose from a wide array of modules to integrate into the platform instance. Integrating official modules is not a taxing task, but the ensuing data migration and configuration or third-party software integrations may require assistance by Acumatica consultants.
However, these benefits can be a bit tainted by Acumatica’s unconventional pricing model. In addition to the monthly licensing fee, you will need to pay for resource consumption, not the number of users. Thus, the more complex your manufacturing ERP grows, the more you will need to pay. This concept may be hard to wrap your head around at first, so to dispel potential customers’ confusion, Acumatica provides the ERP ROI Calculator tool for estimating the total cost of implementation.
Odoo is another prominent ERP platform that Itransition works with, and that stands out with its manufacturing capabilities. An open-source solution, Odoo is a suite of over 30 workflow-focused modules that companies can easily install and uninstall to tailor the ERP to their changing business requirements.
The vendor provides three hosting models for their software: the Odoo Online SaaS, the Odoo.sh PaaS, and the on-premises edition. Odoo charges customers a monthly fee per user and per adopted module and additional app, and while the cost of the SaaS and on-premises platforms varies only slightly, Odoo.sh is the most expensive version of all three.
The Odoo Manufacturing module comes complete with Maintenance, PLM, and Quality sub-modules. Together, the system encompasses features for managing manufacturing processes, repair orders, and bills of materials, controlling quality, and planning the production. But for the software to prove truly robust and functional, adopters are recommended to complement it with Inventory, Supply Chain, Reporting, and Workcenter Control Panel sub-modules. Also, the IoT Boox sub-module, capturing certain smart device data and aggregating it in the ERP database, will come in handy for manufacturing enterprises powered by M2M technology.
Owing to Odoo’s inherent ease of integration, the sub-modules form a robust and powerful manufacturing ERP system, able to deliver detailed real-time insights into every single aspect of your production process. By leveraging the native Odoo iOS or Android mobile apps in addition to the web platform, you can enable full-fledged remote access and management.
But Odoo is not without its downsides. This ERP software compares unfavorably with its competitors in terms of customization limitations and technical complexity. The Odoo SaaS does not allow for third-party integrations and source code alterations, which makes this deployment model a poor option for an innovative manufacturer. The on-premises version, in the meantime, boasts limitless customization possibilities, but even the vendor recommends it solely for teams experienced in Odoo development and can’t guarantee the infrastructure’s robustness and performance. Odoo.sh is flexible and maintained by the Odoo team, but it is, once again, a comparably costly option not every manufacturer can afford.
A German multinational business software provider, SAP is best known for its robust ERP suite SAP S/4HANA. Available on-premises, in public, hybrid and private clouds, SAP S/4HANA compares favorably with the competitors due to its in-built AI, ML, and RPA technologies.
Out-of-the-box, the platform offers manufacturers the capabilities for production planning and optimization, assembly processes support and management, and quality control. Also, leveraging the in-built RPA technologies, companies can expedite the demanding make-to-order process.
To fully tailor the ERP to their line of business, SAP S/4HANA adopters can integrate it with dedicated SAP extensions. For manufacturing enterprises, two solely on-premises platforms are available—SAP S/4HANA Manufacturing for planning and scheduling and SAP S/4HANA Manufacturing for production engineering and operations. The former solution enables comprehensive data-driven resource and material planning and facilitates cost-effective production scheduling across manufacturing sites. The latter tool is aimed at bringing engineering and manufacturing closer by supporting data exchange and collaboration between them.
SAP S/4HANA also stands out with its high extensibility. The vendor provides the SAP Extension Suite, allowing users to quickly build and enhance adopted applications, and a software development kit for developing cloud-native extensions, while on-premises implementations can be customized via code modifications. There is also the SAP Integration Suite to facilitate connections with other SAP products. Leveraging these tools, however, requires a decent level of SAP-specific and software development expertise.
The SAP S/4HANA pricing is custom, calculated based on a company’s size, solution needs, and deployment option and provided upon request, while extensions and development tools are charged for separately. The vendor also offers a 14-day free trial for newcomers to test out the ERP’s capabilities first-hand before committing to it.
On the flip side, SAP S/4HANA is generally considered cumbersome, unintuitive, and not user-friendly. Other than that, functional robustness and in-built intelligent technologies make the ERP a pretty expensive solution.
In the modern landscape, manufacturers are more focused than ever on keeping their production processes flexible, cost-efficient, and resilient to disruptions. ERPs, historically geared towards supporting manufacturing workflows, prove an appropriate solution for achieving these goals while also streamlining some labor-intensive tasks and gaining useful operational insights.
For the ERP software to prove beneficial in both the short and long term, manufacturers need to take into consideration other relevant aspects beyond functionality, such as available hosting options, total cost of ownership, ease of integration and upscaling, and the availability of a mobile app.
Acumatica, Odoo, and SAP S/4HANA are three well-recognized robust ERP manufacturing platforms, each with their competitive advantages but also weak points, pricing models, infrastructure and skills required. Therefore, even leading solutions need to be implemented only after careful consideration and, if possible, expert consultation.
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