Scaling your business for future success with M1 ERP Software

As reductionist as it sounds, improving scalability of your business is as easy as sorting your administrative functions. While on face value this sounds too simplistic and doesn’t acknowledge the complex and sophisticated considerations business owners must take, in reality it is the basis of business success. Clear administrative processes allow business owners to access data in real time and make educated decisions for their business—eliminating all the guess work.

Liam Merrick is a Senior Implementation Specialist at ECI Solutions. Liam has a background in business operations management in manufacturing and has been involved in scaling up businesses in Australia and New Zealand for the last 20 years. He equates information access with business success.

“One of the largest barriers to scaling up is not having the information available when you need it,” Liam said.

“Questions such as are our jobs on budget, what is our cashflow position today, and where is that order are questions that the quicker you can answer the quicker you can make considered business decisions.

“In modern manufacturing industry, speed is key to business viability and the only way to increase speed is to increase your availability to accurate data in real time,” he said.

Scaling your business organically

While for some manufacturing companies scaling their business is a considered goal that has been worked towards for years, for others, they just got busy.

Liam warns that while being busy is a sign of a healthy business the systems put in place can mean long-term health rather than a short-term burst.

“Organic growth can see manufacturing go off like a rocket, but you don’t want to go so fast and out of control that you explode at the other end,” Liam said.

“It’s important to scale up with thought. You can’t just hope for the best—you need to be informed with what’s going on. You need to know if each individual item and process in your manufacturing business is making money and what the margins are,” he said.

Get in control; stop the duck paddling

An early marker of a business starting to scale up is the tell-tale feeling for the owner that they are running their business like a duck paddling through water—they look like business is going well, sales are increasing, and the business is organically growing; however, they are struggling to keep up and record keeping isn’t in line with the pace they need it to be so they can make decisions. Guess work creeps into the workday—educated guesswork, but guesswork all the same.

This can continue for a while but soon enough owners will start to feel overwhelmed by reporting data delays and the workday feels precarious. That once, easy information flow from key employees becomes harder as they become busier and grow in number. If you add in new sites opening and need to look at multiple locations and integrate data from multiple sites the data delay is likely to increase, placing even more pressure on decision-making ability. As information lags decision quality is hampered and the decision-maker's stress increases.

Liam, in his role at ECI Solutions, sees this growth journey more times than he’d like.

“You don’t know what you don’t know and so when a manufacturer comes to me exploring options as they start to scale, they come with a mish-mash of systems and processes that ‘talk’ to varying degrees to each other,” Liam said.

“The administrative burden is eating into their core business. As the saying goes, they can’t see the wood for the trees.

“Once your manufacturing business gets to around 10 people person-to-person communication starts to fail as people just don’t experience the opportunities to discuss the business in their day-to-day work.

“You need more rigid structures and reporting capability—no longer relying on independent spreadsheets or manual inventory with MYOB or QuickBooks and Excel and Word and Email, and I think at that point an enterprise resource planning (ERP) software is the only solution for your growth. You need to be able to consolidate your data into something sensible that allows management to make strategic decisions,” he said.

Fully integrated enterprise resource planning (ERP)—what is ERP software

Liam’s passion to help businesses scale up to their full potential has seen him help 100+ small-to-medium-sized manufacturers scale up over the 20 years he’s been at ECI Solutions. He recommends using manufacturing ERP software to ease administrative roadblocks.

ERPs, such as the M1 product by ECI Solutions, fully integrate various business and administrative processes into one application.

“ERPs integrate functions such as CRM, lead and sales generation, inventory and purchasing management, labour, production, shipping and receiving, as well as accounting into one system—no longer do systems need to ‘talk’ to each other in clunky translation—you can get it all in one,” Liam said.

“M1 by ECI Solutions covers all of these administrative functions and more in one system.”

Differences between ERP and its predecessor, MRP

Before cloud ERP software, there was materials resource planning (MRP) software—a key administrative tool for manufacturers in the 80s.

Liam attributes the rise of the MRP to mass manufacturing business.

“MRPs served their purpose but it’s time to elevate and further ease administrative burden,” Merrick said.

“Before MRPs everything was based on invoicing. It was all retrospective and if you made a loss last month it would be a few months of losses before you might realise you’ve got a pattern forming.

“Manufacturers had a lot of data, but it wasn’t collated in a sensible way so that you could find out why income was dropping or where the profits were going or how the actual processing times were comparing to the projected times.

“Now, we have the technology to have data that can be interpreted easily and quickly, and I encourage manufacturers to use it to enable their growth,” he said.

How ERP software can do everything effectively

The argument that individual products would provide a more specialised service to manufacturers is counter-intuitive according to Liam.

“Business follows general rules. You have a product that needs manufacturing and to do that the manufacturing process follows a generalised formula. You get a lead, you follow-up, you quote, it converts to a sales order, you produce or pull from stock, you deliver, you invoice, and you receive payment.

“The problem with separate systems is that each time you transport the data across the systems you need to export that data and input that data—the translation can be clunky and the process a pain point especially when manual copying is open to data entry errors.

“ERPs, such as M1 by ECI Solutions, is a single-house system. If you type the data once, it should never need typing again. You don’t have to retype data to pull a quote into an invoice—the process is seamless,” Liam said.

“You eliminate repetition, decrease workplace frustration, and make decisions based on hard facts, in real time.”

Benefits of using an ERP

Key benefits of using an ERP include:

• All-in-one system for administrative functions—streamlining your business processes
• Cost-effective—one subscription fee instead of multiple condensing financial and inventory systems this saves at least 30 percent in administrative costs
• Person-hour reductions—no more double data labour; no more repetitive manual inputting
• Nothing lost in translation—no import / export data translation errors; no time wastage
• Less stress—real-time information retrieval; person-hour reductions
• Greater decision-making ability—no data delay means decisions can be made based on details not educated guesses
• Facilitating increased productivity and speed—modern manufacturing relies on speed; speedy turnarounds, speedy decisions
• Focus on core business—not on administration and reporting
• One support team responsible for everything—no more jumping between different suppliers with each suggesting you call the other for support
• Potential return-on-investment (ROI) realised—no longer missing out on better products or more sales because you can’t see the sales trends forming. An ERP shows you trends in real time.

How to implement ERP software for manufacturing companies effectively

Over his 20-year career, Merrick has identified the most effective ways to implement ERP software into a manufacturing business.

“The biggest challenge for companies is cultural change for the employees. Someone might have spent years owning and updating an excel spreadsheet and the change to ERP software can be seen as a challenge,” Liam said.

“Another common challenge is re-sharing the data entry and management by redirecting to the right departments, not just some staff bearing all the burden just because they have access to a specialist application.

“The most effective implementation is when management is really involved and the employees can see the benefits for changing their work processes that they have followed day-in, day-out for years.

“The other challenge I see is aligning the previously fragmented systems and data so that the information can work for the owner. However, once that data is inputted once, that’s the only time it will need to be typed out,” he said.

“Any challenge is far outweighed by the ROI an ERP like M1 from ECI Solutions can bring.”

Read more about M1 from ECI Solutions and how this ERP can assist your manufacturing operation with real-time visibility of your inventory management and supply chains as well as being fully integrated with your financials.