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A recent study revealed that Tooling working companies are more likely to replace their current ERP (Enterprise Resource Planning) system than other manufacturing companies. Some mistakes are more costly than others; selecting and installing the wrong ERP package is often a costly mistake both in financial resources and lost productivity. More than sixty percent (60%) of all Tooling-manufacturing firms will replace their repetitive manufacturing ERP software package with an Engineer-to-Order ERP package within the next twelve months. This replacement rate is statistically significant compared to non-Tooling manufacturing operations.

Morgal Machine Tool, a Springfield, Ohio manufacturer of quality stamped Tooling products, decided several years ago, it needed to replace its ‘homegrown' and stand-alone applications with an integrated business system. Morgal management recognized that the company's existing information systems were not adequate to support their rapidly growing organization. The data needed to be entered into different systems, multiple times, and it was difficult to get a clear picture of inventory.

Morgal Machine Tool MIS Director, Tom McLaughlin, had the task of transforming their data collection system interface, one of the many major projects undertaken by the company. "Our time to perform a total stock check of all inventory has been reduced by two-thirds," said McLaughlin. By selecting an Engineer-to-Order ERP software package, the company dramatically increased efficiency.

Morgal developed routines to allow the company to operate both the new Engineer-to-Order, Cincinnati-based Encompix software, along with the former system at the early stages. "We took our time, and the overall implementation took about nine months," McLaughlin recalled. "We implemented the accounting modules first and it went very quickly and smoothly. Then we concentrated on training our associates and bringing over one job function at a time."

Tooling Manufacturers and machine shops are not repetitive manufacturers. Each job is unique; the variables are based on client specifications, not controlled inventory.

The Connecticut Spring & Stamping Company, Farmington, Connecticut, had originally selected and used the BAAN ERP package and quickly recognized the operational shortcomings. Like Morgal Machine Tools, Tom Malinski, the Tooling Manager of the Connecticut firm, made the decision to switch to an Engineer-to-Order ERP software. Similarly, Jeff Umstead, Information Director of Merrill Tool, Merrill, Michigan, had used MADE2MANAGE repetitive ERP systems, before converting to the Engineer-to-Order ERP Process also developed by Encompix.

There are few Engineer-to-Order ERP packages in the Tooling manufacturing marketplace. Sonia LeBot, Business Manager for GL&V Inc. in Nashua, NH is in the process of changing the ERP system for more than a dozen multinational locations. LeBot cautioned when considering an ERP system, "Ask if the data is run through inventory. If it is, move on."

More Engineer-to-Order Tooling manufacturers will replace their original ERP system than any other manufacturing sector. Repetitive manufacturers can "make-do" with their shortcomings of some ERP systems because they may only be missing a desired feature, but the fundamental ERP process is adequately addressed in the generic system.

Engineer-to-Order Tooling manufacturers cannot escape the necessity for key feature differentiation:

These variables help Tooling manufacturers to determine if an Engineer-to-Order ERP system is required. If there is no ERP system in place at present: get it right the first time. If a change to an Engineer-to-Order ERP system is needed, heed the advice of Ms. LeBot, "Stop the pain, absorb the loss, and get the right (ERP) package."

About the Author: Mr. Cutler is the President & CEO of Ft. Lauderdale based TR Cutler, Inc., the largest manufacturing marketing firm worldwide – www.businesswire.com/emk/fl-tr-cutler.htm.) Cutler is the founder of the Manufacturing Media Consortium of twelve hundred journalists writing about trends in manufacturing. Cutler is a frequently published author within the manufacturing sector. (Back to top)

TR Cutler Inc., Ft. Lauderdale, FL, USA. Tel: 888-902-0300, or e-mail trcutler@aol.com.

Source: TR Cutler Inc.