Guidelines to Choose an ERP For Your Foundry
It does not matter whether you are an owner or employee; whether you are in Maharashtra, Karnataka, West Bengal or Tamilnadu, if you are working in a foundry then you are facing some challenges every day. You are always occupied finding the answers to the questions like why there is always a delay in the production or why aren’t you able to deliver on time, tired of adjusting stock in order to keep the tally of your finished goods weight vs. raw material weight and it never matches and so on…
You want to draw out a growth plan instead you are occupied in rejection analysis and preparing WIP reports for your clients. You need to keep the control on operations and in order to do so but you are stuck doing non-productive tasks. It is most likely that as a solution you are looking for an ERP, which does these all for you and …
A couple of months later …
You are still stuck doing the same things mentioned above every day. In addition to that, you find yourself doing another task of evaluating the ERP software, which can best fit your foundry. Maybe some of you even tried to implement a couple of them which by the way, is now costing you some hard-earned moolah in addition to your time which you wanted to save in the first place and yet you are not satisfied.
Challenges in identifying the best suited ERP for your foundry:
Once you start looking for the ERP software for your foundry, you will either search for the solution or ask the fellow foundrymen for a good reference and schedule a demo with the Solution provider. Keep one thing in mind that you do not want to go for huge customization as that can take up your time as well as money. So, we suggest going with the industry-focused solution in our case Foundry Specific ERP.
Here is your quick guide for what to look and how to decide, whether the software is suitable for your foundry or not and has developed exclusively for foundry:
Identify pain areas/requirements for which you need this system
Before you start looking demos, you should hold up a meeting with your team to identify the pain areas and requirements in your foundry so that you are sure what exactly you want from your software. Most probably, it is either keeping inventory in check or analysis of the rejection or it may be to find out how much money you are making from the casting or it may be everything above but list down what problems you want this new ERP system to solve for you.
As said earlier, when prioritizing requirements, you should involve employees from all departments to determine the most important requirements based on business value:
1.) Must-haves – Provides significant business improvements in terms of functionalities and compliance which must match with the business processes
2.) Value-added – Beneficial to improving business processes but not critical.
3.) Nice-to-have – Makes employees’ jobs easier but won’t necessarily provide significant business process improvement.
It will be difficult to measure the output and success of the ERP Implementation unless the requirements and objectives are clearly identified.
1.) Jot down use cases
This is the most critical exercise to perform before you organize the demo. Let us say in the first meeting with your team you have listed down the requirements/ pain areas. Now, monitor your daily activities for some time and at each department. Observe specific events/cases that seldom occur in your foundry. So when you see the demo, ask how to make entries for such events and is there a provision to do so or not. Some good examples are-
1.) In the sand casting process at times while molding, we need to close the cavity. Now, when this case occurs, how to make entry? What would be the impact of material consumption and casting inventory when we make poring entry for that mold?
2.) Sometimes mold size is quite big and to be able to maintain the temperature we need to pour the mold from multiple ladles simultaneously. So, is it possible to make entries of pouring a mold from two or more ladles?
3.) How to make entries of fuel (coal, gas), etc… at the time of pouring? Is it user-friendly?
4.) Almost all the times in case of purchase of items like scrap and sand, we never receive the exact quantity as ordered. Sometimes prices change. How to accommodate these changes in a live scenario? Do we need to manually go and close the Pending Purchase orders if the quantity received is a little less than PO qty?
5.) Case of weight/qty loss during transit - In case of items like sand, supplier - when loading the truck, loads X qty and during the transit, the sand dries up and loses some weight. This affects two things- qty received (GRN Qty) and Supplier Bill Qty (Always more than we received) - how to manage this scenario in the ERP?
It’s better to take precautions than regret later. Testing these points/use cases thoroughly before employing the software can save you time, money and frustration of the users. We need to evaluate the importance of this kind of case as one small use case can make ERP implementation go fail. Most of the software solution providers may not have a ready solution for this kind of use case, especially generic software solutions. Therefore, it is always advisable to look for a solution provider who has developed a solution specifically for foundry like ‘iCast Foundry ERP’ and whose product is already matured and widely used in the market. Even though it’s a possibility that all your use cases may not be readily available but need to check with the vendor whether it is possible to develop or not. That leads to our third step of selection- o for industry-specific solutions.
2.) It has to be an industry-focused solution, period. (In case of foundries- go for ERPs exclusively developed for foundries)
Most of the foundries being a small and medium-sized industry cannot afford Tier-1 ERPs like SAP and Oracle. They are developed for large scale, multi-location operation companies. Moreover, these systems are out of the box products and in addition to its hefty licensing costs, there is customization cost involved not to mention the implementation time it requires to get it customized.
However, gone are the days when only SAP and Oracle were dominating the market. Nowadays we have so many options to choose from and we also have options to choose from the industry-focused solutions. So, what is the industry-focused solution? In simple words, the ERP, which has been developed exclusively for this industry or one can say the pre-customized solution for the industry.
So, what to look for/ how to decide the one of which you’re looking at the demonstration is a foundry specific ERP?
1.) Start from looking for Pattern/Die module and related reports (Like aging report etc…). Check whether it has all the entry fields specific to foundry like Lettering details, multiple methods options (In case of sand casting), Die details, can maintain revision history, etc… look whether job card/method card report can be prepared
2.) Check for the above-mentioned use cases are taken care of described in point no 2
3.) Check whether there are a dedicated planning and production module exclusively developed for foundry
4.) Is there an option to trace castings Heat No wise throughout the process? On the other hand, your vendor says it’s possible but will have to develop then apparently the software is not developed exclusively for foundry
5.) There has to be a separate entry for Mold and Core production, Melting, Pouring entries, not just the single production page. You will get an idea once you see the entry pages.
6.) How many foundry specific reports are already developed? Do you get Pattern/Die revision history and method card? Do you get a melting summary report? Do you get a report for your foundry report posting or Melting loss?
Just use your common sense to find out whether it’s another tweaked solution or exclusively developed for foundry. If the vendor asks you to enter BOM and Route-card for each casting… there are high chances that only the front end is designed to look like a foundry software but it’s not developed for foundry from within (The Database structure standpoint view).
3. Flexibility & Scalability
Let’ say you finally found the one developed for foundry. Now it is time to decide how many functions/ modules do you actually need to begin with? Do you need them all or do you need to begin with only the essential modules? Does your vendor provide the flexibility to choose from the modules that you need? If yes, then is it scalable? Let’s say 2 years down the line you decide to step up. What then? Do you have to start over or you can simply version up? That’s where the scalability comes into the picture. Think of the possible situation of your foundry over the period of the next 10 years. What if you open up another unit or open a machine shop? What if currently, you own a sand casting foundry and 4-5 years down the line you decide to open up an investment casting unit. Is it possible? How difficult it would be then? Also, check for supporting tools that you might need in the future to complement your ERPs such as BI or Mobile Application or Emailer module. When the time comes, does your ERP vendor provides all that? If yes, do you need to pay for all of them right now? Ask your vendor all these questions.
4.) Multiple Selection Criteria
Apart from the above-mentioned criteria, there are other criteria to take into consideration when finalizing the ERP.
Business Process Alignment
Check whether the new software can fit align with the business processes. It shall not happen that your company needs to change your existing process in order to make the ERP useful.
What is the technology the ERP is developed with? What is the database? Does your company need to purchase any additional database license or Server? Or can it be accommodated in the existing infrastructure? Is it a web-based or client-server application? What is the best fit for your company? Check for the above options.
Cost (Clearly define the scope to calculate cost)
The most important part, calculating the cost! So what are the factors that you have to take into account when it comes to finalizing the cost? The most important is the License cost. How many users are going to be using the product? How many licenses are required in your company? What will be the cost of implementation? Most people do not have a clear idea about the scope of implementation. It broadly includes installation, training, and customization until the ‘Go-Live’ phase. Yes, although you have gone for the ‘Industry-Specific’ solution there will be a requirement for new report developments or a bit of customization. What would be the cost of it? What will be the cost of customization required in the future? After you have worked all up, do not forget to calculate the maintenance cost. Organizations need to define the scope of work clearly and the amount of service the vendor has to provide in order to complete the project smoothly. Unless the scope of work has been jotted down clearly there are chances that you will end up paying more at the end. Fixing the scope work (Be it phase-wise if needs to be) will also help you in measuring the deliverables and success of the project.
Another important criterion to take into account is the level and quality of service the vendor is able to provide. Ensure the vendor understands your business. Otherwise, the process owners will become busy teaching the vendor about the industry and ultimately that will delay the project and add on the hidden cost of your employees. So make sure your vendor has the domain expertise. If not, you might lose big in terms of opportunity cost or cost of time.
Make sure your vendor has an excellent service record. Please keep in mind that ERP is 25% product and 75% Service business. Which means only ‘good product’ will not be enough! The importance of good service weighs more than that of the product itself. Can you get a local service provider? Is there going to be a language barrier? How much will it cost to call your service provider onsite? How good is the responsiveness of the service provider? All that factor has to be taken into account. Which leads to our final criterion-references.
Your vendor's existing clientele says it all! When it comes to getting to know your vendor, ask for the reference of existing clients! You can find out the quality of the product and level of service your vendor can provide. You can find out about the domain knowledge, Experience, skill, supportiveness and other things about your vendor.
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