Only One-Quarter of Manufacturers Use ERP to Generate KPIs: Sikich Survey

If a Cinderella story is possible in manufacturing, Hagler Systems is it. The Augusta, Georgia-based equipment manufacturer went from a seat-of-the-pants operation with no part numbers and little inventory oversight to a state-of-the-art ERP system that helped them reduce inventory by a third - all in just under a year.

A sea of paper

Paper-based manufacturing operations that lack detailed information on work in progress aren't as rare as one might think. The 2015 Manufacturing Report from Chicago-area professional-services firm Sikich found that only 26 percent of manufacturers use an ERP system to prepare their KPIs. Eleven percent use a custom-built application, and a whopping 53 percent are using spreadsheets or other manual processes (see graphic).

Source: Sikich Mfg and Distribution Report 2015 

"They know it's inefficient, but they're comfortable with it as long as the executive is getting his data," says Al Galinot, a partner in Sikich's Microsoft Dynamics AX practice. "Of course, [the executive] doesn't realize the amount of work behind the scenes. Someone is copying and pasting data from multiple databases into a spreadsheet and then manipulating the data - so it's both time consuming and error prone."

Growth, complexity, and risk

At Hagler Systems, which builds engineer-to-order parts for the oil and gas industry, Dynamics AX became a key system for managing a huge growth spurt.

Before AX, the company was handling million-dollar projects ...