When it comes to looking for an Enterprise Resource Planning (ERP) software vendor, it’s important to look for someone who doesn’t just sell you a product. Your vendor also needs to be your business advisor, helping you make the critical choice of integrating an ERP into your automotive company—a decision you should never take likely given how sweeping its effects will be.
The process of selecting potential providers of ERP software is one of the most important decisions you’ll ever have to tackle for your organization. Asking an ERP vendor the right questions will help you and other decision-makers in your automotive manufacturing firm choose the best solution that fits the needs of your organization.
With these challenges in mind, we have compiled a list of questions to ask any software provider that specializes in ERP in automobile industry. Note that this guide was not created as a means of self-promotion, but rather to genuinely advise you on how to successfully implement an ERP solution into your company.
1. How Will An ERP Affect My Automotive Manufacturing and Production Processes?
Within the automotive industry, there are many distinct types of manufacturing processes.
These styles include heavy dependence on robotics, automated systems, and job-shop style organizations. And that list does not even include the hundreds of different manufacturing processes, such as forging, molding, coating, assembly, machining, and stamping among others.
Each combination of manufacturing process and type for automotive applications comes with its own set of unique requirements – and an ERP solution needs to be able to integrate them (whatever they are). This means that ERPs must be adaptable for your specific company. For example, a manufacturer of sophisticated, multi-component machines may not be able to use the same interface as a manufacturing facility that mass-produces identical parts in the thousands.
Your ERP must be optimized for your unique manufacturing processes for it to deliver maximum value and impact. This is why it’s generally a good idea for your ERP provider to visit your manufacturing floor to study your processes and business model.
2. How Much Will Your ERP Cost?
ERP systems are not cheap, which is why you should never be embarrassed to ask about pricing details upfront. Vendors typically have varying pricing structures. For example, some vendors offer license-based pricing while other companies will charge you on a subscription basis.
Although subscription-based services may seem more affordable, paying a one-time fee for a license can actually save you more money in the long run, much in the same way you would save more if you paid for a new car in cash instead of in installments.
You also need to consider the number of possible users of your ERP system, and how many modules you think would be best for your organization. Remember that some modules, although useful, may not be necessary, so be sure to understand what needs are most crucial to your success.
3. How Easy Will It Be To Add Business Processes To The ERP?
One of the most common concerns automotive companies have about adopting an ERP is the ease (or lack thereof) of adding new business processes to the system. Entire industries have been on by the practice of adding on functions and features to unintuitive and aging legacy systems.
Unfortunately, wise counsel on this topic can be hard to find. Some manufacturing firms even receive bad advice driven by a conflict of interest, because an IT decision maker wants to become a database administrator or a certified programmer on a legacy system to advance his or her career.
In most ERP systems, users are able to make small changes to the interface. However, adding new processes and screens often requires bringing in a programmer and paying for hours and hours of effort, because it’s impossible to make significant changes to the user flow or system logic without significant investment.
Fortunately, there are workarounds to this problem. A number of ERP vendors offer solutions that take a models-based approach to application developed, which enables your IT staff to build their own menu of options specifically designed for their own business processes. Some systems even offer a drag and drop interface that allows just about any IT professional to build new screens without having to write new lines of code.
4. How Many Successful ERP Integrations Have You Done?
As you probably know by now, ERP integration in the manufacturing sector, whether it’s for the automotive, aerospace, medical, or food processing industries, can be a complicated and sometimes chaotic process. This is precisely why you should ask any vendor or consultant about its experience and track record before making any hiring decision. ERP installations require skill and expertise, so be sure to get only the best.
5. Does Your ERP Solution Support Extended Processes?
As you know, your manufacturing firm’s operations do not exist in a vacuum.
- Your operations rely on shipments from suppliers and partners
- You need to constantly interact with and support your customers
Doing these things well requires multiple parties to have access to your company’s data, and to do that, you need a reliable and, more importantly, secure data connection.
The best ERP systems will be able to support transparency between you, your customers, and your suppliers, without necessitating any additional programming or software. In addition, your ERP system needs to be easy enough to use that your customers and suppliers will not require much if any training to learn how to use with the interfaces they see.
Among the useful functions to expect in this area include:
- Problem Alerts – The ERP should allow you to automatically send emails to suppliers and notify them when there are problems with the components you ordered. In turn, this will prompt the supplier to log into your system and follow instructions for solving the problem.
- Lean Orders – An ERP solution will help eliminate unnecessary holding costs, allowing you to keep stock only when necessary. Your ERP should be able to take the guesswork out of calculating orders and maintaining inventory, allowing you to request supplies just in time for production.
- Customer Transparency – Your organization may also benefit from an ERP that allows customers to view your product inventory, quality checks, and problem reports
Ideally, these applications would be available to users on any web browser and without having to purchase additional portals specifically for your suppliers, partners, or customers. This will streamline user access and expedite deployments.
6. How Long Will Implementation Take, And How Do You Ensure The Process Is On Time And On Budget?
Your ERP providers should be able to provide you with a realistic timeline for integrating your ERP solution into your organization. Unfortunately, multi-year deployments have been known to happen, usually resulting from different consultants and programmers coming and going, and leaving a company with a half-baked ERP product plagued by cost overruns and delayed timelines.
While speed is important for immediate ROI, it’s better to wait a little longer for a fully functional ERP solution than to have one right away only to have bugs later on.
Besides speed, your provider must also demonstrate a commitment to staying within budget. ERP projects are notorious for going beyond expected costs, with a report from analyst firm Gartner showing that 55% of respondents in their report ran over budget during their ERP implementation. In addition, 47% went beyond the deadline.
You can avoid this problem by working with an ERP firm or consultant that offers fixed-fee billing, which will give you the exact price of the project before you even commence. This kind of setup reduces any potential uncertainty in the integration process and ensures that the finished product is up to your requirements.
7. Do You Offer Training And Support?
ERP integration does not end when after it’s implemented into your business’ manufacturing and production process. You still need to ensure that your people actually know how to use it, which will require training and continual support from the provider or consultant.
As such, it’s important that you have an agreement with your vendor or consultant that your organization will receiving full support during the initial days of deployment, and at the very least, for the next three months. You also want to discuss options for ongoing support well after this timeframe.
As for end-user training, you can arrange remote or on-site training sessions until such a time that your teams are finally confident with the ERP system.
When choosing an ERP solution, your vendor or provider needs to take into account its users. If your employees, suppliers, and customers won’t use the software, it will completely defeat the purpose of integrating the product in the first place.
At the same time, however, you want your ERP to be able to provide accurate data in real time and in a secure manner. This will be critical if you intend the software product to streamline your operations and maximize profitability.
If you successfully combine these two factors, your business should be able to reap the rewards of ERP integration.
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