If a company plans to grow, it must take steps early on to lay the foundation for that growth. No step is more important than the decision to select and implement an ERP system. Many smaller companies feel that they can make do using spreadsheets or manual lists to manage their business, but this decision may make growth a slower and more painful process than it needs to be. So what are the telltale signs that would indicate it's well past time for your company to put an ERP solution into place?

1. Lack of standard procedures inhibits flexibility

It’s hard to enforce common processes across manual procedures, so if you’re running things manually, you’ll find that everybody uses their own methods, limiting your flexibility in cross training people or providing coverage when people leave the company, are on vacation or away for other reasons.

2. Unreliable information leads to poor decisions

Manual systems are error prone. You may find that information you receive is not reliable for making decisions. You or others may also be relying too heavily on guesswork or rules of thumb, which don't often yield optimum results.

3. Tasks take longer than necessary

Since manual systems are more time-consuming, your employees spend more time on tasks than they would with automated tasks. As a small company, your resources are limited, and you can’t afford to waste them on non-value added activities.

4. Inventory issues

You have trouble maintaining accurate inventory counts. Physical counts seldom match the perpetual inventory records because there is no system to enforce transaction processes. Not only is this an accounting issue, but it wreaks havoc with production efficiency since parts aren’t available when you need them. In turn, that causes delivery delays that upset customers. Upset customers don’t send repeat orders, so poor inventory accuracy adversely affects revenue.

5. No information sharing

There may be a lot of paper moving around the company, but there is very little real communication occurring. Information is stored in documents and spreadsheets on personal computers, where people don’t have easy access or don’t know who has the information. You waste resources maintaining multiple versions of the data or arguing over which version is correct.

6. No available to promise capabilities

Wasting resources cuts in to profitability but when lack of information affects customer satisfaction, it affects revenue. Customers expect to be given reliable shipment and delivery dates when they place an order. Customers don’t want to wait for a call back, and they won’t accept bad dates for too long before they move on to another supplier.

7. Compliance issues

It’s difficult to prove that your team is adhering to manual processes, and missing quality and compliance standards can lead to large fines as well as unhappy customers or worse.

8. Increasing demand

You can’t keep up with increasing demand for your product because of inventory issues, lack of resources or unreliable information. 

How ERP can help

ERP is not just accounting or materials planning, as some people mistakenly believe. ERP encompasses automated processes that touch on every aspect of your business, from managing inventory to order entry to shipping, procurement and quality management and reporting.

1. Helps you manage resource constraints and optimize throughput
2. MRP and production scheduling capabilities provide information needed to make decisions on expediting, overtime or other factors
3. Track and maintain accurate inventory balances for every part, and help ensure your team processes required transactions
4. Provides more accurate inventory information to improve planning, scheduling and customer service
5. Manage sales opportunities by providing accurate delivery information
6. Improves communication between departments and provides a single source of information for decisions
7. Provides a detailed record of all activities for audits and other historical purposes

In short, ERP helps you become more efficient, helps ensure regulatory compliance and supports growth by improving customer service, resource utilization and production efficiency.