B.E.L. Solutions Ltd.
Are All MRPII/ERP Equal?
Not long ago, MRPII/ERP system was a luxury solution while manufacturing was a
very profitable business. Inefficient workflow and planning, excess inventory might
only eat up some of the huge profit margin. Nowadays, manufacturing becomes a
very competitive business with extremely low margin. Smooth workflow, accurate
production planning, high inventory turn (minimize inventory), maximize production
capacity without never-ending investment in acquiring more equipment is the key to
maintain profitable if not merely survival.
We all now realize that we need a MRPII/ERP system. There are many MRPII/ERP
systems out there, are they all equals? If so, why their price varied so greatly? You
might have seen demonstration of systems on both ends, they all look alike and work
more or less the same. Or should the high-priced MRPII/ERP systems are better?
What differentiate high price system from their competitors? Quality. These high
price systems put a lot of effort in quality control of their products – Data Integrity
and Robustness.
In users’ point of view, only features they are concerned with. By our experience, it is
very seldom for users to ask about data integrity and robustness until they purchased
the system and found it out the hard way.
In order to make a complex system like MRPII/ERP robust and data integrity proof, it
requires tens of years of development and refinement, not to mention hundreds of
thousands of programming code lines. Besides, the development team members
should include well-experienced manufacturing experts, financial accountants,
management consultants and top-notch software developers.
Imagine how long will it take to simply re-type a million lines of programming source
code, a few years? You might understand why a MRPII/ERP system requires a lot
longer development time than the company history of those low costs MRPII/ERP
systems.
How could a few years old MRPII/ERP system survived before their system become
mature in 10 or more years? The magic of the game is the combination of low cost,
some superficial function of big-name features such as MRP, CRP, MRPII, and
ERP…. Etc. Have you ever seen a self-claimed MRPII/ERP without built-in finance
module? Have you ever heard a self-claimed ERP without CRP function? How about
a MRP system that does not support alternative materials in BOM level? We have
heard ALL. Ironically, they do pretty well in the market. How could it be? Simple,
attractive cost and the main factor are, we are reluctant to say, inexperience first time
users. Does it mean their investment is all wasted? Not really. The experience they
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B.E.L. Solutions Ltd.
learned through the implementation of such systems is invaluable. If the system cost
is low enough, you might even consider it as a good investment for the experience.
I would like to emphasis that it does not mean these systems are not good. In fact,
they might serve very well in some areas at their price range. The only problem is the
category of application they put themselves into – MRP, MPRII or ERP. Users will
expect differently if they categorize themselves as Accounting system, Trading
system or Manufacturing system.
Does it mean going for expensive MRPII/ERP can’t be wrong? It depends. Many of
these high-quality systems have failed badly during implementation in Asia. Why
again? These systems are well designed for their target customers – manufacturers in
western countries. Their workflow are well defined, their requirement is rigid in order
to get maximum benefit for their customers, thus best return in their investment (the
system). It sounds good, isn’t it? Why those systems were not implemented well at
the end of the day?
Have you tried to purchase materials from your overseas vendors, 8 weeks to 3
months delivery lead-time? Yes, their workflow is well defined. Any rush orders or
late order change will upset their production badly. Could you reply to inquiries from
your potential customers in the same way? Could you say no if your customers
change the order in the last minutes? If you could, going for these high-price will not
be too bad an idea. Are we telling you that these high-priced/well-recognized systems
do not have resources to adjust their system for Asia market? Yes, they do. In fact,
these companies have put up huge resources for penetrating Asia market. Some of
these resources goes to localization of the system and make it compatible to Chinese
(Traditional/Simplified Chinese) and Japanese. Up to this moment, many of these
systems are still not fully compatible with Chinese operating systems. The rest of
their resources goes to their butter and bread –sales and marketing. Believe it or not,
sales and marketing requires huge financial resources.
If you could not tell your customers not to place late orders or change orders in the
last minutes, or if you do not have budget for multi-millions dollars system and skyhigh recursive cost of ownership, then look for a system that has good implementation
history in Asia at an accessible price.
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