Mind the (ERP) gap

Posted on 18 Feb 2015 by Malcolm Wheatley

For small scale manufacturing, ERP isn’t appropriate. But what is, asks IT Editor Malcom Wheatley.

Employing just nine people, Brackley-based KW Special Projects is a high-performance engineering business specializing in the application of the digital fabrication and additive manufacturing.

The local Formula One motorsport industry is one part of its customer base, but so too are aerospace companies, medical device companies, and defence companies.

Kieron Salter, managing director, KW Special Projects
Kieron Salter, managing director, KW Special Projects.

That said, founder and managing director Kieron Salter is all too aware of the danger of his £1m turnover business being pigeon-holed.

“We’re not sector-specific, or technology-specific,” he insists. “We have core specialisms – digital fabrication and additive manufacturing – and we apply them to solve our customers’ problems, in whatever industry those customers happen to be.”

An hour’s drive away, in the Birmingham suburb of Smethwick, Mark Wingfield – managing director and cofounder of A&M EDM – is mostly to be found on the factory floor of the industrial unit that the business occupies. Trading for just 12 years, A&M has become the largest wire-erosion and spark-erosion subcontractor in the UK, and as its name implies, is rigidly focused on electrical discharge machining.

“By design, and very deliberately, we’re quicker and more flexible than the bigger guys,” says Wingfield. “We’ve never employed a sales representative, and last year we turned over £4m.”

Mind the Gap - PQ2No wonder the spotlight is shining so strongly on businesses such as KW Special Projects and A&M EDM.

As their enviable track records demonstrate, small niche manufacturers play not just a vital role in the UK’s larger manufacturing industry, but also act as economic powerhouses, creating jobs and skills in urban and rural environments where opportunities can sometimes be few.

Moreover, such businesses are innovating at a frenetic pace. Take Portishead-based power tools specialist CEL. Very much a ‘virtual business’, it has fewer than 20 employees in the UK, and a literal handful of people in Hong Kong.

The company’s search for a better and cheaper rapid prototyping solution eventually led it to develop what it now sells as Robox, a micro-manufacturing platform based on Fused Filament Fabrication, which works in a similar way to a hot melt glue gun.

“We developed it to meet our own needs – and then discovered that we weren’t the only company wanting to bring rapid prototyping in-house,” says managing director Chris Elsworthy.

“We didn’t invent the technology – but we have found a way to bring it to the home workshop, the ‘maker market’, and small specialist manufacturing environments.”

Where’s the ERP?

Adapting to the ‘maker’ market

As the phenomenon of small-scale niche manufacturing continues to take hold, some software sectors are actively engaging with such businesses, bringing specially created offerings to the table.

CAD giant Autodesk, for instance, has created a whole new division that would have been unthinkable a few short years ago: the Autodesk Consumer Division, which has launched both simple design tools and small-scale 3D-printing into the ‘maker’ and niche manufacturing markets.

“Our traditional market was only ever going to be a certain size,” says Jesse Harrington, Autodesk programme manager for the 3D-printing and maker space. “But going after the small scale and consumer market while maintaining our integrity in the professional market is a tough proposition, and we’re proud that we’ve been able to achieve it.”

Similarly, on-line trade platform GT Nexus – which connects together 25,000 manufacturing businesses, which collectively buy and sell [US dollars] $100bn in goods – is another enterprise vendor targeting the emerging small-scale manufacturing market.

“We’re seeing a lot of small firms springing up – often in very rural locations – making highly-engineered products for major companies,” says Diane Palmquist, vice president of manufacturing solutions at GT Nexus.

“Whoever heard of a ten-man shop supplying giants such as Caterpillar? But the Internet has really levelled the playing field, because with the Internet, and the Cloud, the need for scale goes. All you need is skilled workers, and robotics.”

Look closely at such companies, though, and one thing immediately stands out. Where larger, traditional manufacturing businesses these days rely heavily on ERP systems and similar manifestations of enterprise computing, many small specialist manufacturers such as KW Special Projects and A&M EDM elect not to use such tools.

To be sure, enterprise applications focused on businesses’ technical competencies are usually there in abundance. At KW Special Projects, for instance, top-of-the-line SolidWorks Professional is the CAD tools of choice, coupled to EPLAN for electrical schematic design work.

And at A&M EDM, a wide variety of CAD and CAM software is in use, reflecting the diverse engineering design platforms of the company’s customer base.

But ERP, and similar cross-functional enterprise technologies? “At the moment, we use our own systems, designed and built in-house in Microsoft Access and Microsoft Excel, and which are linked to our accounting system, QuickBooks,” says KW Special Projects’ Salter.

“We’re achieving all the things that a bigger organisation would do – including traceability to standards set by America’s Food and Drug Administration – but probably not as efficiently as we might be able to do.”

No straitjacket, please

A&M EDM’s Wingfield makes a similar, although subtly different point. Companies such as A&M EDM are ‘jobbing shops’, he points out, undertaking a lot of ‘one offs’ and rapid prototyping—whereas ERP and similar systems tend to be associated with businesses engaged on more repetitive manufacturer.

“Because of the type of work we undertake, using ERP or MRP would be very difficult. We’re a very flexible skills-based business, and we worry about systems getting in the way of doing what we do,” he argues.

KW Special Projects’ Salter concurs, adding that all single manager businesses face the dilemma of having to start with simple, rudimentary systems, from which they then eventually migrate.

Mind the Gap - PQ“There comes a point where the burden of such systems becomes too much, and at that point they need to start looking around at alternatives,” he observes.

“But from our point of view, we worry about being locked into systems that are too rigid, and which aren’t flexible enough to work the way that we want to work. We don’t want a system which will become a barrier: we want a system which will be there to help us.”

The challenge for the ERP industry seems clear. While larger businesses welcome externally-imposed best practices and ‘out of the box’ industry templates, small niche manufacturers – with perhaps just a handful of employees – want systems that will adapt to them, and not the other way round.

Is it a circle that can be squared? We’ll have to wait and see.

Do you need a new ERP system? Spend a single day discussing your ERP needs one-to-one with the leading ERP vendors at Connect ERP.