Choosing an ERP for Long-Term Value
People tend to buy or invest in things to solve a problem, to address immediate needs. However, the best decisions will also create long-term, continuous value.
We purposefully had stayed a small shop. Getting big only brings headaches, right? Back in the first Gulf War, our company had ballooned from only a few people to more than 10 employees. Once the war effort ended and work dried up, the shop shrunk back to only one employee and the owner decided that was a good number to have – it was comfortable and easy. By 2016, we had 4 CNCs, one employee and an energetic second generation. Now in 2018, we have 8 CNCs, 11 people including owners and without the issues we faced the last time we were this size. When we set out to grow the company we needed to solve two challenges. The first was the immediate challenge of quoting and easily tracking jobs and their performance. The second was creating a system of processes that was scale-able, built around the software.
Like any good Boy Scout, I did my homework. I evaluated 7 ERPs, in-depth, encompassing many hours. Like any Boy Scout, I had heard the campfire horror stories of implementing ERPs. For example, a neighboring shop had spent $50k to replace their old system only for it to fail and return to the old ERP. In 2016 I started looking for a system that would be powerful but without the additional complexity. I landed on Realtrac because it focused on the shop floor (and was not just an accounting tool), easy to use both in the office and on the shop floor (we’re a job shop, clocking in and out of operations has to be quick), and it gives me and my manager real-time visibility of the shop floor (and not just give us data on how we did in the past).
If we quote a job based on 10 hours and it takes 12, that data is now easily captured and reported, with costs and margins, enabling us to either address the issue or requote. On the flip side, if a cell is outperforming, we can discover it easily and work to replicate it. If our company or a customer wants to negotiate pricing on repeat work, we now have the data to review our margins on every job, small or large, which takes out the guesswork. Being a low volume, high mix production company, using excel documents to record data, track and analyze would be too time-consuming and very error-prone.
I am proud to announce that we were awarded a Modern Machine Shop’s 2018 Top Shop. From the survey, we ranked in the top 1.5% of machine shops for performance. Continuous improvement is a key factor in our performance, you can only get better by challenging the process. Realtrac is a tool that supports our continuous improvement by giving us quantitative data on current processes’ and performances. It’s also a tool to share with machinists about how they did on a job – not in a Big Brother sort of way but instead, to help in their future decision making such as the next time they’re asked to participate in estimating times for a new job.
While we are a high-performance shop, we don’t currently have any quality certifications. One of our goals is to achieve ISO9001 and AS9100 within the next year. However, without Realtrac it would not possible. Secondly, how a job shop naturally functions with 5 or 10 people is not scale-able to 50 people or more. Currently, our processes are being strategically redesigned with Realtrac as a core, to both continue our path of growth and create the traceability required for AS9100 certification. Best piece of advice I got from a Fortune 500 customer: “fully, one hundred percent embrace your ERP. Otherwise, you’ll have a mismatched, confusing way of doing things and implementation will not succeed.” My advice is that if you must wholeheartedly embrace an ERP, you better make sure it’s top notch and will do what you need it to do. For us, Realtrac has been amazing for easily tracking everything from estimating to job costing to inventory while enabling us to work towards our long-term goals.
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