ERP (Enterprise Resource Planning system) is a set of software applications that integrate to manage core business processes. ERPs provide manufacturers with visibility into their entire operation. This allows them to improve efficiency and productivity and reduce costs.
There are many types of ERP software available in today’s market. This increases the choice for consumers, but it can be difficult to determine which system is right for your business. We will explain the differences between two ERP systems, industry-specific and generic, to help you choose the right system for your manufacturing company.
Types of ERPs
Generic ERP Systems
Generic ERPs are the most popular and well-known ERP systems. Generic ERPs offer many functionalities and features. They are extremely robust. Generic ERP systems are flexible enough to adapt to the processes of companies from different industries. However, they will require customizations and add ons.
Sector-specific ERP Systems
Specific ERP systems for the industry are created to address specific industry needs. These systems are often created by niche companies with a small team of industry experts focused on solving specific industry needs. The features of industry-specific ERP systems are the same as those found in generic systems, including accounting, finance, and inventory management. However, they will be tailored to the specific industry needs.
An ERP system that is specifically designed for manufacturing will, for example, include an MRP module (Materials Requirement Planning), along with other features that are required by manufacturers. Because they don’t require any customizations to provide industry-specific capabilities and features, industry-specific ERP systems can be used immediately.
Cons of generic ERPs
Generic ERPs can be used to create a single solution. These ERPs are often created and designed by the most prominent names in business, such as Microsoft or Oracle. They are strong systems with many great features, but they also require high levels of customization. Although this isn’t necessarily a problem, it can be costly.
Because it takes time and effort to create the customizations required, implementing a generic ERP is slower and more expensive than implementing an industry-specific one.
Also, customizations can be more expensive. The implementation phase is longer and more costly, but you also have to pay for any customizations or add-ons that you require. Your ERP provider will need to pay more for long-term maintenance because customizations can be time-consuming and require extra attention.
An industry-specific ERP system can significantly reduce these costs. Different features and integrations will be built into the software. This makes it easier to set up the system in your shop. This reduces the time and costs of implementation and allows you to reap the benefits from an ERP faster — something you and your finance department will enjoy.
The benefits of industry-specific ERPs
For a specific market segment, industry-specific ERP solutions offer comprehensive functionality. Because they are based on industry-specific processes, they offer more specific capabilities. Industry-specific ERPs offer greater functionality at a lower cost, with a shorter implementation time, lower implementation costs and lower maintenance fees. These systems provide standard capabilities and features tailored to your industry and operations, which generic ERP systems cannot.
Along with accounting, business intelligence, and inventory management, custom manufacturing-specific ERPs will include features specific to custom manufacturers, like product engineering, quoting and estimating job costing, and shop-floor scheduling.
These systems are tailored to the needs of a specific industry and include their unique processes. This makes these systems more functional and allows for more efficient communication between ERP providers and manufacturers. The ERP provider will speak your language and should better understand your specific needs.
Some Final Thoughts
Both industry-specific and generic ERP systems can offer manufacturers the functionality and features to improve their operations. Generic ERP systems can be costly to customize, while industry-specific ERPs can be tailored to meet the specific needs of manufacturers. An industry-specific ERP can provide greater capabilities and cost savings for manufacturers.