For manufacturing executives interested in migrating to a cloud ERP application to manage operations and accounting, both NetSuite and Acumatica offer very compelling value propositions, each with its own set of advantages. Before beginning any kind of ERP manufacturing project, executives need to ask themselves the following:
- Where are my current constraints or bottlenecks? How will an ERP system provide visibility not only to my current constraints, but allow me to continually refine my processes as bottlenecks are alleviated and new ones emerge?
- How do services factor into my business model? Do I anticipate growing ongoing support services to my customers over the next five to ten years? What do I need from ERP in order to meet those needs?
- What is my cost structure? How are material and labor costs accounted for in my product? Where does my current system fail in terms of cost capture?
For light manufacturing and assemblies, NetSuite provides an excellent platform to schedule work order production, consume component inventory, bake the cost into a finished good, and sell that good to a customer. For distributors with a “light” manufacturing arm – performing some kind of change to a base component or combining components into different packages, this is a great way to get started in a manufacturing solution.
More advanced manufacturers tend to need some form of shop floor control. These systems allow management to determine where specifically in a facility a particular manufacturing action will occur, what will be done, and also provide tools and interfaces to capture time or effort expended in doing so. Both Acumatica and NetSuite offer work center and routing packages, which allow a business to define particular work centers and labor rates for this work centers, issue components to specific operations or tasks, capture labor events against those operations, and provide standard cost rollups for multi-level assemblies. Both systems also offer phantom routings, allowing a business to “build” an assembly without needing to input the production action into the application itself.
While NetSuite provides an extensive routing application, and does so on top of an enterprise class toolset in its standard ERP product, Acumatica really shines when it comes to integrating manufacturing into other areas of the business, specifically, for manufacturing businesses that also provide a service function to customers. Acumatica production orders can actually be posted to projects, where subsequent tasks for installation, training, or setup can occur for a product. In fact, multiple production orders in Acumatica can tie to different project tasks on a single project, allowing greater visibility into cross-functional efforts by a business that manufacturers and supports a product.
Furthermore, Acumatica also provides extended functionality between its manufacturing and services modules. This allows a manufacturer to provide ongoing support, including repairs, truck inventory, and case management for service for a single work order.
When evaluating a manufacturing ERP solution, its important for executives to understand exactly what they are trying to accomplish on the shop floor, and really explore the way the solutions will deliver on these objectives. Specifically, executives evaluating NetSuite or Acumatica need to understand the visibility they need over their operations, the accounting and costing requirements, and the business model innovation they need, all of which are well supported by these particular software applications.