The Best ERP Systems for Small Manufacturing Businesses

In the following analysis, we focus on the needs of small manufacturing businesses so you can move forward confidently and further evaluate which manufacturing ERP system is right for your business. We are confident that one or more of these systems surpasses the key features and capabilities needed for small companies AND is priced for smaller and simpler implementation budgets.

Most critically, our list includes only proven systems for small businesses or those under $10 Million in revenue. Trust us. These ten proven systems have the power to take your growing company far into the future.

Our Recommended ERP Systems for Small Manufacturing Businesses

As you read through our suggested list of systems below, keep in mind we are showcasing the following systems as cloud-based (SaaS) solutions, which typically suit smaller businesses better. It’s important to note that most of these solutions can be licensed on-premise or in the cloud.

ERP Selection Methodology

Below are the factors we weighed to create our list of ERP systems for small businesses.

Experience

For over 15 years, the experienced team at Top10erp​.org has provided expert ERP selection assistance to thousands of companies. Our seasoned ERP advisors share a combined 100+ years of experience in ERP analysis and consulting, assuring our recommendations represent expert insights and guidance. We offer comprehensive knowledge of the ERP solution marketplace and a profound understanding of businesses’ diverse needs.

High Product Standards

At Top10erp​.org, we uphold a stringent product selection process, ensuring that only the most distinguished systems earn a coveted place on our platform. Our rigorous criteria encompass a range of essential factors, including but not limited to:

• Extensive record of successful installations within specific industries or company sizes, demonstrating a deep understanding of sector-specific requirements.
• A remarkable three-year customer retention rate is indicative of the enduring satisfaction and reliability offered by these solutions.
• Validated customer success stories, showcased through published case studies, provide tangible evidence of our recommended systems’ transformative impact on businesses.
• Pricing structures are tailored to accommodate the budgets and constraints of small enterprises, ensuring accessibility without compromising on quality or functionality.

Targeted Exclusions

Sometimes, what is left off the list makes it all the more valuable. We have intentionally excluded several well-known vendors and products (SAP, INFOR, Oracle Cloud) because they are inappropriate for small businesses, especially those implementing their first ERP system. In addition, you will note we did not include Quickbooks or other accounting systems for small businesses, as they are not true ERP Systems.

ERP Evaluation Tips for Small Manufacturing Businesses

Small manufacturing businesses can greatly improve their efficiency by implementing ERP systems to streamline operations. ERP provides a comprehensive solution that integrates various facets of business management, from inventory and supply chain management to production scheduling and financial tracking. ERP should be at the core of your manufacturing software strategy and for many small manufacturers, it can be the only software solution needed to run your entire business.

By consolidating disparate processes into a centralized platform, ERP enables real-time visibility into operations, facilitating informed decision-making and fostering agility in responding to market demands.

Moreover, ERP systems provide scalability, allowing small manufacturers to adapt and grow without encountering the limitations of legacy systems.

Below are added specific tips small manufacturing companies should follow when evaluating manufacturing ERP systems:

• Establish performance metrics specific to manufacturing KPIs, like production yield, cycle time reduction, or on-time delivery rates, to measure the success and ROI of the ERP system.
• Prioritize user-friendly interfaces with features like visual production scheduling and barcode scanning for inventory tracking.
• Ensure the ERP system offers specialized support and training resources for manufacturing processes, such as lean manufacturing principles or quality control standards.
• Identify unique manufacturing workflows and industry regulations that may require customization.
• Evaluate integration requirements with manufacturing equipment and software, such as CNC machines or CAD/CAM systems.
• Collaborate only with ERP vendors or consultants with experience in the manufacturing sector for tailored implementation strategies.

Specific Benefits of ERP for Manufacturing Companies

Finding the right ERP software for your small manufacturing business is crucial to your efficiency and growth for a number of reasons.

The right ERP system can help transform supply chains by providing visibility, automation, and control like never before. It can help rapidly scale your brand and optimize current systems without massive spending.

Almost every aspect of a small manufacturing business can benefit from enterprise resource planning (ERP) software, which streamlines many facets of your company within a single program, including:

• Inventory management and materials management
• Manufacturing and supply chain management
• Centralized data collection and analytics
• Accounting, finances, taxes, and reporting
• Production management and scheduling
• Sales, marketing, and operations

A robust ERP system can revolutionize supply chains by offering unprecedented visibility, automation, and control, facilitating rapid brand expansion and system optimization without excessive expenditures. Every aspect of small manufacturing operations benefits from ERP software, which integrates multiple facets of the business into a single platform.

You can reference our Manufacturing ERP Systems Buyers Guide for more in-depth information on manufacturing and ERP.

Why Your Small Business Needs an ERP System

In addition to the manufacturing-specific benefits discussed above, there are additional general benefits for all small businesses. Let’s cover a little bit about the benefits of good ERP software. Of course, financial management is the primary reason for switching to one of the top systems. 

Indeed, the right system will provide you with measurable cost-saving capabilities while simultaneously helping to optimize your business processes, making them more efficient and economical than ever.

But there’s much more to the story. Here are some compelling reasons why manufacturers should upgrade to ERP software: 

Provides Real-Time Data 

Analytics play a crucial role in enabling industries to effectively respond to the evolving demands of consumers and their respective sectors. A critical advantage of the most proficient ERP systems is their capability to consolidate data from multiple departments, offering comprehensive analytics. This real-time data allows you to track data across all departments that you probably currently treat as separate entities, providing in-depth and actionable analytics you can tweak as needed to get the best possible results. This also helps you see how different business functions affect one another.

Enhances Customer Service

One of the things that many small businesses notice right away when starting out with their first ERP platform is accuracy. With detailed visibility of inventory, materials, progress, scheduling, and shipping, there’s a much lower risk of error and disgruntled customers. Did you know that 90% of online consumers, according to a recent study by Business Wire, actively monitor their shipment status daily? The right software can provide you with accurate, automated order tracking for a happier consumer experience, not to mention accurate inventory updates.

Reduces Costs

These benefits work together towards the one primary goal — cost savings. A well-chosen can save you money by reducing error, keeping customers happy, preventing inventory surplus or deficit, tracking expenses and write-offs, and reducing operational costs by automating and monitoring all of your company’s finances. Of course, a system that saves you and your employees time will save you big bucks by allowing you to allocate labor elsewhere.

Helps Grow Your Business

At the end of the day, growing manufacturers need more of everything, including labor, warehouse space, time, and marketing. Most manufacturing software solutions work hard to optimize what you already have and make more space. For example, the right solution could help you take advantage of your warehouse space to store more goods without extending your facility’s footprint or investing in more storage. In short, they’re all designed for scaling businesses.

Centralize Your Key Business Processes

Still debating? Think of an ERP system as a central nervous system for your business, connecting all your data and processes for maximum efficiency, control, and growth. Are you tired of managing all your data on Excel sheets? An ERP system will streamline and centralize key business processes such as accounting, inventory management, human resources, and customer relationship management. Integrating these functions into a single platform allows small businesses to drastically improve efficiency, reduce manual errors, and enhance overall productivity.

Make Informed Decisions Quickly

The best ERP systems also provide valuable insights through real-time data analytics and reporting capabilities, empowering small business owners to make informed decisions quickly. Future supply chain issues? Another lot recall? Your ERP system will allow you to swiftly meet unplanned demands and address inventory or production issues, helping improve your bottom line.

Free Up Valuable Resources and Time

Furthermore, by automating routine tasks and standardizing processes, an ERP system frees up valuable time and resources that can be redirected toward strategic initiatives and business growth. How do you envision your business growing and competing in the next 5 to 10 years? Undoubtedly, a robust ERP system is the ticket to those goals through new processes and efficiencies previously unimaginable.

Streamlines and Simplifies

An enterprise resource planning platform streamlines and simplifies many of your company’s operations by offering a real-time view of all your main processes under a single system. For many businesses, this means downsizing from various software solutions to a single system that puts all your primary functions under one umbrella. It also creates a central, company-wide hub that requires only a single software training for all departments. Additionally, you can reference our Manufacturing Systems Buyers Guide.

Selecting the Best ERP System for Your Small Manufacturing Business

Implementing a new ERP system can seem daunting for small and midsize manufacturers, but choosing the right software is crucial for improving efficiency, gaining insights, and enabling growth.

Rather than a burden, the ERP selection process should focus on finding a solution tailored to your specific manufacturing needs and processes. This allows small businesses to transform operations impactfully without overspending on unnecessary capabilities. 

By carefully evaluating your current workflows, manufacturing methods, industry regulations, and budget, you can make an informed software choice that delivers rapid ROI. The following key considerations will guide you through the ideal selection process so you can confidently invest in the best ERP technology.

Below is a list of 5 Key considerations when choosing your system:

Consideration No. 1: Your Current Process

Ask yourself: How Am I Currently Managing My Business?

Did you know that over % of small manufacturers plan to make technological investments in 2022 to improve business processes and efficiencies? Many seeking to implement a new system are doing so to replace their homegrown systems. If you’re looking for a more advanced, tailorable solution beyond QuickBooks, Excel, and other programs you’ve grown out of, now is the time to implement software. 

The good news is that most of these products are set up to help you transition from more basic and limited solutions to full-featured ERPs, so your current system will help you decide which software is best. 

For example, when switching from QuickBooks, you’ll want to select software compatible with QuickBooks, so you don’t have to spend a ton of time rebuilding databases from scratch. 

Note that various systems make switching from Excel a breeze. If you want to maintain any current databases or historical data, make sure that you choose an option designed to make the transition as simple as possible, specifically for Excel users.

Consideration No. 2: Your Specific Manufacturing Process

Ask yourself: What is My Manufacturing Mode?

To narrow down your selection even further, it helps to select your software by the manufacturing process. There are solutions that are engineered specifically for precise manufacturing modes, such as discrete, process, and mixed-mode manufacturing, as well as light assembly (kitting), professional services, engineering to order (ETO), make-to-order (MTO), repetitive (make to stock), job shop (shop floor) and industrial or wholesale distribution. 

While choosing software that is not mode-specific may work just fine, depending on your specific business and industry, it does help if you have unique tools that support your manufacturing mode. 

For example, if your company practices process manufacturing, small business owners should have additional management functions that help you plan, sort, and produce formula-based goods, with additional solutions to simplify process-specific requirements, such as lot-traceability and meeting federal compliance standards. Another example would be companies in the Metal Fabrication industry searching for steel-related features.

In addition to manufacturing mode, systems are also categorized by the industry in which they serve

Consideration No. 3: Your Industry

Ask yourself: What Are the Specific Considerations of My Industry?

In addition to manufacturing mode, systems can also be categorized by the industry in which they serve. Again, this can help simplify certain company-specific considerations — for many businesses, the primary considerations are industry regulations, security needs, and safety laws — to help ensure that every industry challenge is considered with your software selection. For example, if your small business specializes in producing parts for the aerospace industry, you’ll have to consider many things that may not affect businesses in other industries, such as compliance with ISO AS9100 standards.

While almost every industry should consider selecting software developed specifically for their realm, it’s more important for some than others. 

Those in aerospace and defense, agriculture, automotive, chemicals, food and beverage, consumer packaged goods, product manufacturing, energy, health and medical devices, petroleum and coal, industrial machinery, transportation, pharmaceuticals, and biotech should take special consideration in choosing industry-centric ERP systems to ensure compliance and safety across all industry-specific processes.

Consideration No. 4: Costs

Ask yourself: How do I measure ROI?

Finally, you need to determine a budget for your ERP project. This sounds simple, but costs can be somewhat deceptive in any major software integration. What may seem like cheap software now may cost you in the long run. 

What you really should be considering is the ROI of your ERP solution. The up-front cost of manufacturing software implementation varies widely, from $4,000 to over $1 million, but this isn’t the cost you should be concerned with. Instead, it would be best to consider the up-front spending minus your potential returns to determine the ROI of the transition. 

See our pricing guide to learn about all the cost factors of implementing a system. It’s also helpful to understand the different tiers; generally, small businesses will look for tier 3 or tier 2 software.

One of the big things small businesses need to consider cost-wise is licensing. There are two primary types of license fees for ERPs — on-premise (typically paid with a hefty, one-time licensing fee) or cloud-based/SaaS ERPs (typically paid for on a per-user, per-month basis and ongoing). 

Because they’re paid per user, cloud-based ERPs are often a smarter, more cost-effective solution for companies that have fewer employees or who only need to give out licenses to a small group of workers. Both cloud ERP and on-premise deployments will scale as your business grows.

Implementing an ERP System in Business

Integrating an ERP system into your business operations involves more than software selection. Implementation is a critical phase, varying in duration based on software complexity and business size. Read our ERP implementation guide to understand this process. Here are key tips for success:

• Review Implementation Checklist: Ensure readiness with our ERP Implementation Checklist.
• Consider Timeframe: Recognize varying implementation durations crucial for business continuity.
• Prioritize Training: Comprehensive training is essential for employees to optimize operations.
• Leverage Vendor-provided Training: Utilize vendor resources for effective transition.
• Understand Transformative Nature: Recognize the transformative impact on daily tasks.
• Focus on Optimization: Training empowers employees to maximize productivity and minimize errors.

Using Top10ERP​.org to Find the Right Software

After considering all these factors, we hope you’ll be closer to deciding which systems to evaluate closely. That said, we know this guide isn’t all-encompassing, so we offer an assortment of tools that simplify the selection process. We invite you to use our Best-Fit Comparison Tool to find a fresh list of systems that match your exact criteria and needs.

Here at TopERP, we’re happy to help you with your selection process and offer customized recommendations directly from our trusted advisors. Speaking with an experienced advisor to learn which specific systems best fit your business goals and processes can be very helpful.

Moreover, we genuinely enjoy speaking with the many manufacturers who trust our advice. We are always learning in this constantly changing manufacturing world. Please let us know how we can support you throughout your search.

Small Business ERP Frequently Asked Questions

Many small businesses have questions when evaluating if ERP solutions are the right choice for their needs. Below, we address some of the most frequently asked questions to provide further guidance in your ERP selection process.

What are the main benefits of ERP for small businesses?

The key benefits of ERP for small businesses include improved efficiency, cost savings, better customer service, data-driven decision-making, simplified operations, and business growth. ERP consolidates and connects key processes into a central platform.

How much does ERP software cost for small companies?

ERP costs vary widely based on the solution, but small businesses can expect to budget $5,000 to $150,000 for software licensing, implementation, training, and ongoing costs. Cloud ERP options have lower upfront costs.

How long does ERP implementation take?

For small businesses, ERP implementation often takes 3 – 6 months from purchase to go live. Proper planning, training, and change management ensure a smooth transition.

How do I determine if it’s time for ERP as a small business?

Signs it’s time for ERP include relying on spreadsheets, frequent errors, supply chain disruptions, lack of data insights, and inability to keep up with business growth.

What are important ERP features for small manufacturers?

Key ERP capabilities for small manufacturers include inventory and warehouse management, production planning and scheduling, quality control, supply chain management, and shop floor integration.

How do I get employees to buy into the new ERP software?

Involve employees early, communicate benefits, provide extensive training, address concerns, and encourage feedback. Change management is vital for adoption.

What are the risks of not having ERP as my small business grows?

Risks include inefficient processes, limited growth, lack of visibility and reporting, siloed data, manual errors, poor customer service, and inability to compete effectively.