How to Choose ERP Software for Your Small or Medium-Sized Manufacturing Business
More often than not, a growing business adopts separate software systems as one-off solutions to immediate needs. As an executive at a small or medium-sized business (SMB)—especially in the information technology (IT) arena—you may feel like a firefighter, putting out a blaze here, extinguishing a wildfire there.
One application handles accounting, while others tackle customer service, sales, marketing, human resources, and e-commerce—and that only covers your front office operations. To meet the needs of a manufacturing company, you also have to consider supply chain management, inventory management, and operations technology for the factory floor.
So it’s no surprise that many SMB manufacturers end up with a Frankenstein-like collection of disjointed systems:
- Each solution serves its department, but each team has its own compartmentalized data.
- Data needs to be manually transferred or tracked in spreadsheets which leads to errors, bottlenecks, and inefficiency.
- The executive team can’t get a clear, bird’s-eye view that allows them to make strategic decisions for the business.
An enterprise resource planning (ERP) solution is a comprehensive business software system that joins disparate departmental systems into one integrated whole, enabling clear communication and panoramic insights for optimizing and growing your manufacturing operation.
For example, Microsoft Dynamics 365 Business Central—an ERP solution for small and medium-sized businesses—includes modules for finance, sales, e-commerce, human resources, purchasing, inventory, project management, warehousing, supply chain management, and more.
Stoneridge Software is accredited as a Microsoft Solutions Partner for Business Applications and is a Microsoft Inner Circle Partner, delivering hundreds of successful implementations. We collaborate with SMB manufacturers across multiple industries to implement Business Central ERP solutions and provide training and ongoing support.
In this blog, we’ll discuss key factors to consider when looking for the best manufacturing software for your SMB.
Choosing the Best ERP for Your Small or Mid-Sized Manufacturing Business
Not all ERP solutions are created equal. An ERP that’s ideal for one company may not work for another organization. Although ERP systems are within reach for small and mid-sized manufacturing businesses, they do represent a substantial investment.
To ensure that you get a good return on your investment, consider the following factors.
No ERP system is worth the investment if it doesn’t handle some specific manufacturing. Dynamics 365 Business Central’s manufacturing-related functions include:
- Inventory management
- Warehouse management
- Supply chain management
- Master production scheduling (MPS)
- Material requirements planning (MRP)
- Assembly management
At Stoneridge, we’ve deployed Dynamics 365 Business Central ERP solutions for multiple manufacturing methods and industries, including:
- Discrete manufacturers
- Batch/process manufacturers
- Food and Beverage manufacturers
- Chemical manufacturers
- Cosmetic manufacturers
- Medical Device manufacturers
Adaptability goes hand in hand with functionality—the ERP you choose should allow for change and scalability as your business grows and evolves. You can use many features of Business Central out of the box, but if you need additional functionality, the Stoneridge team can assist you.
In addition, you can add functions to Business Central via manufacturing-specific independent software vendor (ISV) extensions from Microsoft AppSource.
3. Cost of Ownership
It’s one thing if an ERP solution offers the functionality you need; it’s another thing entirely to consider the cost of an ERP system for your small or medium-sized business.
Some software companies primarily target large enterprises, and their ERP systems are priced accordingly. Others target small and medium-sized businesses exclusively. Very few—like Microsoft Dynamics 365—are appropriate for businesses of all sizes.
Microsoft’s cloud-based, software-as-a-service (SaaS) delivery model for Dynamics 365 makes a Business Central ERP affordable regardless of the size of your manufacturing company:
- Dynamics 365 applications are hosted in Microsoft’s Azure Cloud. By using a cloud-based ERP, you avoid the capital outlay required to host a solution on-site. You also free up your IT team to focus on problems more closely aligned with your business needs.
- Purchasing SaaS software isn’t an all-or-nothing proposition like buying business software as a product. Simply buy the licenses you need for your current users and scale the number of licenses as needed. Costs are clear, consistent, and manageable. What’s more, the software is browser-based—meaning you don’t need to install or upgrade it, and it’s always up-to-date.
Sure, your manufacturing business is small or mid-sized now. But your business model or size might change in the future
As your business scales, your ERP needs to scale, too. A niche ERP designed specifically for small manufacturing businesses may suit you for the time being, but you’ll face significant costs if your system doesn’t grow with you or allow the flexibility to adjust and you have to migrate to a different solution.
Microsoft Dynamics 365 is suitable for small and medium-sized manufacturing operations, but it’s easily scalable for growing and changing companies. Choosing Dynamics 365 prepares your company for the future.
As the lines between the business applications that run your production facilities and the technology that powers your business systems grow increasingly blurry, one way to get ready for the future is to embrace Industry 4.0.
Industry 4.0 includes using the industrial Internet of things (IIoT), artificial intelligence (AI), machine learning (ML), robotics, and automation to make industrial processes like manufacturing more efficient, safe, and productive—and it’s no longer a vision for the future. The transition to Industry 4.0 is happening now.
Selecting the best ERP for your SMB manufacturing operation means selecting an ERP that supports making your manufacturing facilities smart. Dynamics 365 Business Central incorporates tools for utilizing Industry 4.0 technology to optimize your manufacturing processes.
A final and critical consideration in selecting an ERP is your implementation partner. You can invest in a top-notch ERP solution and fail to reap a return on your investment if your team doesn’t buy into or develop sufficient skills to take advantage of the system.
Deploying an ERP for your small or medium-sized manufacturing business involves more than managing licenses, migrating data, and configuring the user experience.
When you partner with Stoneridge Software to create a Dynamics 365 Business Central ERP solution, we bring our extensive experience to bear on all these important aspects of your implementation. But we also provide organization change management consulting, how-to training, and support. Stoneridge support plans give you access to senior-level team members, not just junior agents.
Capitalize on Microsoft’s Innovation and Integration
Two additional items make Dynamics 365 an even more unique and powerful ERP solution for your SMB manufacturing operation.
Microsoft is on the cutting edge of AI and cybersecurity research, continuously developing and applying new technologies to their software. This benefits your company by keeping your cloud-based business data safe and continually providing new AI-powered tools like Dynamics 365 Copilot.
Microsoft Dynamics 365 Business Central is an all-in-one ERP solution for small and mid-sized manufacturers that even includes some out-of-the-box integrations with Microsoft business applications you use every day like Outlook and Excel. But it operates within—and integrates with—the larger ecosystem of Microsoft’s business applications, including:
- Microsoft Power Platform—low-code tools for creating apps, websites, automations, and more
- Dynamics 365 Customer Engagement - Sales, Marketing, Customer Service, Field Service
- Microsoft 365 productivity software, such as Outlook, Teams, and Excel
Stoneridge Software: Your Manufacturing ERP Implementation Partner
Contact us today to learn more about partnering with Stoneridge to prepare your small or medium-sized manufacturing business for growth with a Dynamics 365 Business Central ERP solution.