Choosing the right manufacturing ERP system is one of the most important decisions your manufacturing business will make. 95% of businesses experience improved process efficiency after implementing ERP systems, as well as enhanced decision-making.
The right fit can bring order to complex jobs, control costs, and give you clear visibility across the shop floor. The wrong choice can create more headaches than it solves. In this guide, we’ll walk through how to approach the selection process, what to look for, and how to make a decision with confidence.
Understand Your Business Needs
Before looking at ERP vendors, start by taking a close look at your own business. Every manufacturer operates differently, and your needs should drive the system you choose. Are you engineer-to-order, make-to-order, or a mix of both? Do you struggle most with estimating costs, managing engineering changes, or tracking labor in real time?
Write down the challenges that slow you down or cause errors. Then, define the goals you want ERP to help you reach;whether it’s more accurate job costing, better scheduling, or improved visibility across projects. A clear picture of your pain points and priorities will keep you focused during the selection process and make it easier to evaluate solutions based on what really matters.
Build a Cross-Functional Selection Team
ERP impacts every part of your manufacturing operation, so the selection process shouldn’t happen in a silo. We often see our clients assemble teams that represent the key areas of their business: finance, operations, engineering, production, and IT. Each group will have different priorities and insights into daily challenges.
That said, at the end of the day, if you’re the owner, it’s your business. You’ve got the highest and longest view on the business. You likely need insight from areas of your team, but at times it may make the most sense for you to own the decision.
Create a Requirements Checklist
Once your team is in place, the next step is to define what your ERP system must do. A checklist helps you focus on the features and functions that matter most, instead of getting distracted by flashy add-ons.
Must Haves vs Nice to Haves
Start by separating your requirements into “must-haves” and “nice-to-haves.” For example, if you’re a project-based manufacturer, accurate job costing and project tracking are non-negotiable. Without them, you risk losing money on every project. If you frequently deal with engineering changes, version control and BOM management should be at the top of your list.
Past Issues / Roadblocks
Think about where you’ve run into trouble in the past. Maybe a customer called for an update, and you had to dig through spreadsheets to find job status. That’s a sign you need real-time shop floor visibility. Or perhaps your scheduler spends hours moving jobs around manually when one machine goes down. That points to a need for dynamic scheduling and capacity planning.
Identify Gaps
Some companies even find gaps by reviewing recent mistakes. For example, a manufacturer might discover they shipped the wrong revision of a part because their old system didn’t manage engineering change orders well. By turning that pain point into a checklist item, they ensure the new ERP prevents the same mistake from happening again.
Evaluate ERP Vendors Against Your Needs
With your checklist in hand, you can start looking at vendors. The key here is alignment: does the system match how you actually work, or does it force you to fit into a mold designed for a different type of manufacturer?
Ask vendors to show you how their manufacturing ERP handles your specific challenges. If scheduling is a top priority, don’t settle for a generic demo—have them walk through specific scenarios that you frequently run into. If engineering changes cause bottlenecks, ask to see how revisions are tracked from design through production.
It’s also worth talking to references in your industry. For example, if you’re an engineer-to-order shop, a glowing review from a repetitive manufacturer doesn’t mean much. What you want to know is how the system performs in a high-variability, order-driven environment like yours.
Consider Integration & Scalability
Your ERP won’t live in a vacuum. It needs to connect with the systems and tools you already use—or plan to use in your manufacturing operation. Think about CAD, CRM, accounting, or even specialized estimating software. A good ERP should integrate smoothly, so you’re not stuck re-entering data in multiple places.
Scalability is just as important. Maybe today you’re running one facility with 50 employees, but what happens if you grow to three plants or double your workforce? Will the system scale with you, or will you need another costly upgrade in a few years? Consider cloud vs. on-premise as well: cloud systems often offer easier scalability, while on-premise may give you more control. The right manufacturing ERP should fit your business today and tomorrow.
Make the Most of the Demo
Bring your requirements checklist and ask the vendor to walk through your actual scenarios. For example:
- Handling an engineering change mid-project without losing track of costs.
- Producing a job cost report that compares estimates to actuals.
Involve team members in the demo if you’d like, but ensure they are able to think outside of their roles and consider the big picture through the process.
Treat the demo like a test drive. If the ERP can’t handle your day-to-day challenges in a controlled setting, it won’t magically solve them after go-live.