ERP or Production Monitoring Software? Which Do You Need?
Many people believe that choosing between ERP (Enterprise Resource Planning) software and production monitoring software is an “either/or” decision. However, each solution addresses specific challenges related to managing and enhancing the performance of your shop. In fact, they complement each other effectively, helping to maximize productivity on the shop floor.
ERP Software: It’s All About Labor and Work Orders
Enterprise Resource Planning (ERP) systems provide material and inventory management, labor tracking, work order management, and financial reporting. These systems are for top-down planning and execution through allocating labor and creating work orders. The labor plan and work order estimates must be reconciled against human clock-in/clock-out data to see if things are on track. The information pulled from ERP systems is always backward-looking. It is available at the end of the shift or end of the day and is based on what your team self-reported. The data used for production assumptions are usually best estimates or historical “gut feels” rather than based on actual production results. This built-in inaccuracy makes it risky to use this information for accurate decision planning. This is why many manufacturers experience schedule chaos and a gap between what they thought their profit would be and what it actually is. Ironically, the precision machining industry relies on imprecise information.
Monitoring Software: It’s All About Production Performance
Good production monitoring software provides real-time insights into machine productivity and job performance and helps continuous improvement efforts by scoring current performance against goals. Real-time production monitoring shows what’s happening on the shop floor because the data is pulled directly from your machines. Monitoring provides a level of detail and immediacy that helps shops identify inefficiencies and opportunities for improvement on the fly. The best monitoring solution doesn’t require any operator input to run. Access to the insights from monitoring should be available to everyone on the production floor. A best practice is to broadcast performance across TVs, mobile phones, your existing tablets, and laptops. This type of production monitoring empowers people to intervene when things are off-target— minimizing the impact on production goals.
ERP and Monitoring: Two Great Things that Go Great Together
Like the Reese’s Milk Chocolate Peanut Butter Cup commercial from the 70s, combining the two creates something many people love. If the assumptions in your ERP are your business plan, then data from your monitoring system is your P&L statement. Using both means your business process calculations include actual data rather than “best guesses.” Your monitoring system calculates and displays accurate cost and profitability numbers for production parts compared to your business assumptions.
Having an ERP manage the business side and monitoring software to analyze actual production performance gives you the ability to achieve levels of efficiency and productivity that are impossible using one or the other. ERP’s role in labor and inventory management is essential, but it falls short regarding machine utilization, downtime, and real-time job performance tracking. ERP data is also a poor choice when making important capital equipment, labor allocation, and job quoting decisions. Monitoring fills that gap by starting with the unfiltered truth from your machines and tying it back to your business objectives and goals.
Picking the Best Options for Your Business
All software is not created equal. Choosing the right ERP System and Production Monitoring software for your shop can save you time, aggravation, and money. Here are a few pointers for comparison shopping.
You can also check out real-life stories of people who switched from other monitoring solutions to Datanomix Production Monitoring. Datanomix plays well with ERP systems. This Press Release provides details about the integration between ProShop ERP and Datanomix.
Leveraging both an ERP for business management and machine monitoring for production efficiency can give your business a competitive edge and more money in the bank.
