MRPII/ERP for Plastics Processors

MRPII a smart match for small businesses


By Mark Stephen, associate editor

Altimate Solutions screenshot

Photo Cedit: Altimate Solutions

Screen page for Altimate Solutions, a comprehensive MRPII program which not only focuses on an enterprise's internal operation, but also the connectivity with suppliers, customers and business partners. It comprises of Marketing & Sales, E-Commerce, Procurement, Logistics, Manufacturing, Inventory Management, Accounting & Finance and Human Resources Management.

Plastics processors know that in today's business economy, with rising resin prices and increased competition from overseas, every dollar counts.

This is especially true for small companies — defined by the Canadian government as employing 50 or fewer people — that may lack the deep pockets to weather bad economic times. It can be hard for small companies to remain truly competitive, however, if they cannot effectively track and analyze their own production data.

And this is precisely where manufacturing resource planning (MRPII) software can make a difference.

Defined by the Alexandria, Va.-based Association for Operations Management (APICS) as a method for effective planning of all resources of a manufacturing company, MRPII is not exclusively a software function, but rather a marriage of people skills, dedication to data base accuracy and computer resources.

And it's a marriage that can be ideal for small businesses.

"Small businesses desperately need MRPII," Julie Bort, contributing editor at Manhasset, N.Y.-based technology trends magazine VARbusiness, said. "The systems are used to track inventory, production, job costing, scheduling, materials ordering and they tie all of that information into a general ledger and accounts payable/receivable system. In fact, many include their own accounting programs."

MRPII programs are not as popular with small businesses as they should be, however, according to Bob Kimball, chief executive officer of Andover, Mass.-based Exact Alliance Manufacturing Software, an MRPII vendor that caters to small businesses. "Many customers are still doing [the jobs that MRPII can do] on their own in Access or Excel, or even by hand," he said. And this is despite a recent proliferation of MRPII software designed specifically for small businesses, he added.

An obvious reason why more small businesses don't implement MRPII is that the software isn't cheap. "Even at the low end, MRPII systems begin at US$10,000," Bort said. For that reason, it is important for a small business to get a firm quote from all prospective MRPII suppliers before purchasing the software, she noted.

Also contributing to this reluctance are previous bad experiences with MRPII, probably resulting from poor implementations. Phil Robinson, director of the Hove, U.K.-based software consulting firm Business Performance Improvement Consultancy (BPIC), blamed this disappointment on a poor choice of software supplier. "Too many software engineers know how MRPII software works but do not know how to integrate it into a particular business in a way that delivers real business benefits," he said.

For this reason, selecting the right installation and support company is crucial in order for a small business to get the most out of MRPII. According to Jack Gips, president of Jack Gips Inc., an MRPII software consultant based in Chagrin Falls, Ohio, the vendor should have a clear understanding of what the customer requires before it selects and installs MRPII software. "[The consultant] should give an honest appraisal. Sometimes the truth hurts, but you should not hire a consultant to tell you what you want to hear," he said.

But the good news is that it is getting easier for small businesses to select the right application — a growing number of MRPII vendors are now offering applications designed specifically for small business needs. WinMAGI MRPII software from Manufacturing Action Group Inc., of Grand Rapids, Mich., and MRP Plus from Loganville, Ga.-based Horizon Software International's are both examples of this trend.

Almost as important to a small business as selecting the right MRPII software is ensuring that IT support is available around the clock if a problem, such as the server going down, arises. However, service and support options vary considerably among software vendors so this is something small businesses should take into consideration when choosing an MRPII supplier.

On top of that, small businesses should also consider hiring an outside support technician if the necessary skills aren't available in-house.