Most of Ultra’s work over the years has been serving the mid-market manufacturer.
Typically, mid-market manufacturers span a wide range with sales volumes averaging from $40 to over $500 million or even more a year.
Companies employ anywhere from 200 to 1000 employees. As a sector, mid-market manufacturers employ more than eight million workers in the United States
Moving from Single to Multiple Plants
Over the years, we’ve witnessed mid-market companies transition from a single plant environment to operating multiple facilities as they seek more production capacity.
So a smaller to mid-sized company that once was concerned with tracking operations from one facility might now be dealing with global supply chains and markets from multiple plants.
Impact on ERP
This multi-plant environment necessitates a new ERP approach.
ERP selection teams must now consider implementing an ERP system with enhanced functionality to track raw materials, sub assemblies, machinery, labor, inventory levels, shipping, maintenance and more from each facility in the enterprise, whether around the corner or across the globe. They require real-time visibility into detailed production, manufacturing and financial data across the entire enterprise.
Note that multi-plant ERP features were once only available from the largest ERP vendors. Today, however, many more ERP systems target the mid-market manufacturer with multi-plant capabilities, including systems from Epicor, Infor, IFS, Microsoft AX and others.
Levels of Multi-Plant ERP Capabilities
Not every ERP vendor offers a standard set of multi-plant features, however. It’s been our experience that each system addresses multi-plant features and functions in a different way.
Mid-market manufacturers heading into the ERP selection process need to understand variability related to the set of features that vendors call “multi plant capabilities.” We advise our clients to take a close look at multi-plant functionality offerings using these three levels of capabilities:
- The ability to define the same part in multiple plants with differing characteristics. Companies must be sure the ERP system can track product characteristics across multiple facilities. For example, if a particular part is built in three different plants, the ERP system must set a standard definition of the product in all three of those facilities, tracking the differing cost structures of each manufacturing environment. Tracking the cost structures involves real-time visibility into the Bill of Materials and routing, which differs in each of the plants due to variable labor costs, energy and transportation costs and other factors.
- The ability to track operations of feeder plants. The mid-market manufacturer might operate with “feeder plants” where one plant purchases the raw materials, processes the raw materials, and performs limited fabrication on those materials. The materials then go into stock and could either be purchased by external customers or used by a second plant within the enterprise to assemble a final product for the market. The ERP system must offer real-time routing to define demand to build and process those raw materials. When the two plants are in the same company, the demand planning process must track the order for the end product assembled in one plant, which puts demand on the first plant for raw materials.
- The ability to integrate ordering and demand planning. In a multi-plant environment, the enterprise must be able to fully integrate the order and delivery process for a particular product. This means the ERP system must track in real-time orders from a centralized sales environment across all facilities. Ordering must fully integrate with demand planning for visibility into where the company can build the product most efficiently at the least cost, for maximum profit. This set of advanced planning features must quickly show which plant can build to meet deliver schedules. These capabilities are usually required by the lartest in multi-plant environments on a global basis.
Knowledge is Power
We’ve just scratched the surface here. Future blog posts will showcase our team’s expertise about which vendors and solutions offer the most comprehensive multi-plant capabilities.
What’s critical is that the ERP selection team gains a full understanding of what exact multi-plant features the ERP vendor provides. This deserves scrutiny during the ERP evaluation phase to understand system features and whether they match a company’s specific manufacturing environment.
By providing the right infrastructure and ERP functionality, mid-market companies can simplify the process of managing multiple plants, and tackle what they are best at: manufacturing, not maintaining technology platforms.