The metal fabrication industry, like many others, is facing growing challenges such as economy-driven and cyclical demand patterns, increasing customer expectations, and managing capital requirements.
To add complexity to the equation, there are many subsectors in the metal fabrication industry that face their own unique challenges. To combat these challenges, many metal fabricators look towards improving their people, processes, and technology.
Enterprise software systems address many of the challenges in this industry, and can be a vital part of managing business processes to minimize production time and cost to meet customer expectations.
How Current Enterprise Software Systems Can Help
Although many enterprise software systems have a wide breadth of modular functionality to address the common challenges faced by metal fabricators, one single system may not be enough to address all complex needs of the company, depending on the subsector and company structure.
However, a good enterprise software solution for metal fabricators should include the following capabilities and modules:
- Workflow and Management Reporting
- Customer Relationship Management (CRM)
- Product Data Master (PDM)
- Product Lifecycle Management (PLM)
- Engineering Change Management and Document Control
- Forecasting and Demand Planning
- Purchasing Workbench
- Production Planning Workbench
- Make to Order Functionality
- Shop Floor Control & Routing
- Quality Management
- PLC Integration
- Warehouse Management System
- Shipping Workbench
- Financial Reporting and Cash Management
Some additional capabilities and modules that may be applicable, depending on the subsector, would include:
- Advanced Financials
- Mobile Accessibility
- Advanced Scheduling/Dispatch Capabilities
- Advanced CRM Tool
- Asset Management Capabilities
- Advanced Estimation Tool
Metal Fabricators: A Case Study
Ultra has been working alongside a company in the metal fabrication industry who manufactures steel pilings, which are later installed in residences to resolve foundation issues.
This company had attempted to research new enterprise software solutions on their own and quickly realized the need for expert assistance.
The complexity of deciphering which enterprise software packages could meet the needs of their company proved to be a difficult task – this is where Ultra’s engagement began.
The company is poised in the manufacturing and distribution industry and is managed through multiple companies. Currently there are three different legal entities that all operate under one parent holding company, and each entity has a different way of conducting business.
The entities include a manufacturing company, a distribution company, and an installation services company. Each entity manages their business through multiple ERP systems, in addition to QuickBooks and various CRM software add-ons.
These disparate systems caused a significant amount of manual entry efforts, which were often duplicated across the systems. Thus, multi-company financial functionality was one of the critical requirements identified for moving to a new enterprise software system.
The Franchise Model – Field Service Management (FSM) Solution
Another critical requirement was identified through exploration into their installation services business. The company found itself in the field services realm, as it is responsible for the installation of the pilings at the residences.
Field services is a complex industry as it features estimations, dispatching, servicing, and many more key focal areas that are not commonly found in base ERP functionality. Not to mention, this type of installation is far from typical break-fix services.
Tackling this issue would become one of the bigger focal points when evaluating enterprise software solutions, as the vision was to implement this total ERP solution across all the other installation service franchise locations, which are not operating under the parent company.
This added great complexity to finding a solution that would address the various needs of all three businesses.
4 Critical Requirements for ERP
Is there an ERP software in existence today that can address all our business needs, a real Jack of All Trades? Through our current state discovery and future state mapping, we can piece together the critical requirements for the future ERP system(s), which helps determine which solutions are a good fit, and which are not.
Here are the critical requirements we found for our client:
1. Multi-Company Financial Roll Up
The multi-company functionality, as mentioned previously, was one of the most critical items of consideration during the selection, as it addressed many of the company’s current redundancies and inefficiencies. This was also on the “wish list” of management so they could attain consolidated business reports across all companies in the organization.
Not many ERP vendors can do true multi-company consolidations and eliminations, as their capability oftentimes ends at the division or business unit level – which leaves a lot to be desired for rolling up financials – so this was a key piece of the puzzle to understanding if the ERP system would be a good fit.
2. Strong Shop Floor Control
Although our client was running a very lean operation before Ultra got involved, there was still a lot of manual entry and lack of visibility. The issues the company faced were centered around materials, labor, machine productivity, and routing tracking.
These are common issues faced by many manufacturing companies in general, not only metal fabricators. These issues can all be addressed with a strong shop floor control module, which allows for shop floor users to clock in and out before performing a task at each work center.
The modules can also force quality compliance checks before the materials can be issued to the next process or routing location. Once the user clocks out, the systems then capture the labor time preformed, the output quantity, and the quality of the output.
All of this information can be drilled down and reported against, in real-time, by the shop floor management to drive efficiency and catch issues before they cause any substantial loss.
3. The Need for a Strong CRM
The need for a strong Customer Relationship Management (CRM) system was very apparent from the beginning, as the distribution and field service locations used two different, very customized, CRM systems.
The distribution sales side of the business needed a CRM software that could capture and manage both end-user, franchise account, and national account customer information. This was drastically different from the needs of the field service locations, as they only were dealing with the end-users.
Having a CRM tool that was strong enough to manage the various needs of the distribution sales team, yet able to limit accessibility to the field service locations was necessary, and an intricate requirement.
4. Integration Capabilities for a Strong Field Service Management System
This requirement may seem like a no-brainer, but these field service solution capabilities would mean nothing to the company if they could not be seamlessly integrated to the base ERP solution.
This ties back to the desire for a truly rolled up, multi-company structure. Having the visibility into the installation service locations business would be extremely powerful in managing the success of all the companies, as it would allow an eye into the end-user sales pipeline – therefore stabilizing demand – which would lead to more lean manufacturing, increased on-time delivery, and ultimately increased customer satisfaction.
These data points allow management to address all the challenges currently faced by our client, and many other metal fabricators, by stabilizing demand, keeping the manufacturing operation less capital-intensive, all while addressing consumer expectations.
Thus, having both enterprise software and field service management software integrated became a critical requirement of our selection criteria.
How We Decided on a Software Package
After compiling the critical system requirements and determining the future state vision, we flowed into engaging potential vendors.
Within Ultra’s proven methodology there are multiple levels of engagement between Ultra, the client, and the potential vendors, to review the systems capabilities. Once the notes from the calls or demos are reviewed against the requirements, the list of potential vendors gets narrowed down.
We typically start with a single “Long List” of roughly 6-8 vendors and work our way down from there. However, in this case, we had to review two sets of Long List vendors to encompass both “base” ERP functionality and niche Field Service Management (FSM) functionality.
After completing lengthy, on-site detailed demos, we narrowed down the lists to the following vendors.
ERP: Infor vs. NetSuite
Infor has great capabilities for manufacturing and shop floor control. Infor CSI originally started as a manufacturing-centered ERP system, and it shows brilliantly through their Shop Track and Factory Track modules.
Infor CSI features a native Preventative Maintenance and machine-level integrations module, which is above the normal out-of-the-box functionality found in most ERP solutions today.
Finally, the CSI solution comes with Warehouse Management System (WMS) functionalities. This gave Infor an appealing, all-inclusive package for metal fabricators.
The NetSuite solution provided a very clear example of how their system would address the company’s complex, multi-site needs.
The solution also houses an impressive CRM feature, which is not surprising given NetSuite is known for their background in sales and marketing – this was evident in their impressive native CRM tool.
Finally, the NetSuite solution has a very clean user interface. It can be difficult for a new user to learn to navigate the complex screens of an ERP solution. NetSuite’s offering was very user intuitive and clean, which may allow for a much shorter learning curve.
Field Service Management: ServiceMax vs. SalesForce
ServiceMax is one of the clear choices when it comes to evaluating Field Service Management vendors, as they are ranked in Gartner’s Magic Quadrant for 2016. In addition, ServiceMax has been in the industry for over ten years and is one frontrunner when it comes to Field Services Management systems.
On the other hand, SalesForce is known for its world class CRM tool. It is a very robust tool which is looked to as an industry best practice.
Another clear advantage for SalesForce is their App Exchange, which allows any supporting application built on the SalesForce Platform to easily integrate with another. This allows for many top niche systems to be integrated to give the user an all-inclusive package feel.
Although the client has not yet decided on which pair of vendors they want to move forward with, we are confident there is no wrong choice. It is our job to provide our clients with a tough decision by bringing two or more very competitive vendors to the table. If we accomplish this, it means we did our job well.
Oftentimes the engagement does not stop here, as we offer negotiation and implementation services to ensure the chosen system is successfully implemented at the right price. We strive for immense value realization which is tied to the Business Case for Change to measure both ourselves and the system on overall performance.
To learn more about enterprise software selection, refer to our white paper “Best Practices in ERP Vendor Selection.”