Of all the reasons I hear from job shop owners on why they’re not using a manufacturing software package, the most common one is that they think it will cost too much. Especially for the small job shop – which, by the way, represents the vast majority of the job shop market and the bulk of our customers – I’m here to tell you that job shop software is not as costly as you might think.
What’s more, for other reasons than some misconceptions about cost, job shop software is not just for the big shops.
Even for the job shop owner who might be using manual operations or a hodgepodge of dated computer programs to run his shop, job shop software is actually pretty affordable when you factor in the cost of not having it. Not only is it cheaper than you think, I suggest that it’s more costly for you not to use job shop software to help run your shop.
Much like any other capital investment for a small business owner, the decision to implement software to reliably guide your manufacturing operation is admittedly a very difficult one. Particularly when what you’ve been doing until that point apparently has been good enough. But I’ll let you in on something: what you’ve been doing all along, while on the surface may appear to be all you need, is your ticket to staying on your current course of constantly hurdling the barriers to running your shop more efficiently and profitable.
For those of you small job shop owners and managers, I’ve compiled the most compelling reasons why you should suspend the thinking that yours is an operation that’s too small for an enterprise-wide solution, or that such software is way out of your budget. Here are six reasons why software for small job shops makes sense.
1. Job shop software is affordable.
Let me explode this first myth. Many job shop owners expect that all the additional functionality that is part of manufacturing software packages comes with a very high price tag. Not the case. Some base packages are well under $10K, some even under $5K. Depending on the provider, in that price range you should be able to obtain just about all you need to get your shop moving in the right direction.
For tracking jobs, tracking inventory, generating quotes quickly, generating key reports – many of which are already formatted, you can drive away in an ‘entry-level’ software package for cheaper than you might think. And it can be one that has a whole lot of get up and go, is dependable, and can expand if you want to add features down the road.
Don’t let either your misconceptions about the price nor the sticker shock of job shop software prevent you from a full investigation of the real return on your software investment. Even if you find the price might be a little rich for your blood, it’s going to be worth every penny.
2. It’s more than just glorified accounting.
Many small job shop owners and the people they have keeping the books confuse accounting for their business with running their business. Some shops may use Microsoft Excel or Quickbooks, while others may use a homegrown system of spreadsheets and reports. A good software solution transcends the general ledger and is a true production planning and scheduling partner in your operation.
It’s important for the job shops that wish to grow – want to extricate themselves from the bounds of some limiting current practices – that they look at the larger picture. They need to understand that it’s not just about payables and receivables, but an integrated solution that addresses quoting, labor, materials, scheduling, inventory, equipment, shipment and bringing decision-making to your fingertips versus a frazzled search on your shop floor.
Don’t confuse job shop software – a turnkey solution for improving efficiencies in your core shop business functions – with an (even sophisticated) accounting program.
Remember too, some solutions allow you to keep your QuickBooks, so look for a provider that integrates seamlessly with this or any other systems you have in place.
3. Competition.
If you look around, there’s a good chance you’re up against a job shop that’s using some sort of job shop software package. That could explain why your quotes aren’t turning into orders or why, when it’s all said and done, the true margins you’re getting on your jobs aren’t what you expected. More and more job shops are beginning to use job shop software. Don’t be left in the dust by that shop around the corner who’s using it to grow their business.
We all know that there are many factors that can affect profitability: job conditions: labor allocation, raw materials availability, inventory, other jobs in the shop, etc. Striking that balance between getting a fair price (see good margin) for what you produce for your customers and leaving money on the table shouldn’t have to depend on a flat-rate job costing average or some thinly veiled guesswork.
4. There’s way too much uncertainty in your workday.
Speaking of uncertainty, the day in the life of contract manufacturer can sometimes be very unpredictable. It has got to be one of the most stressful businesses going. It takes a jack (and there’s usually a jill involved too) of all trades to skillfully manage everything from the shop floor to the front office, customers and vendors, hiring, training; the list goes on.
You’ve got enough on your plate to worry about, so why not explore comprehensive tools that help you leave it all at the shop and not burden you away from work. Job shop software helps eliminate some of that unpredictability in your day.
5. Size really doesn’t matter.
Believe what they say: size doesn’t count when it comes to having to deal with the vagaries of managing a job shop. Just because you run lean and you may not be as big as some make-to-order manufacturers, your shop has the same problems as the big boys.
Just like the larger job shops, the kinds of issues you face usually come back to the product you’re producing, not the size of your company.
While the bigger shops often enjoy economies of scale and land larger orders than you might, their business is no more complicated than yours. One can make the case that larger shops can often absorb setbacks on jobs better than the small shop. The smaller the shop, the more stretched you and your co-workers probably are. The more stretched all your resources are, for that matter. All the more reason for you to be smarter about how you operate.
6. It’s not as complicated as it may appear.
The whole point of using software in the first place is to make you more efficient and profitable. You don’t want to be bogged down in having to stay on top of the technology through constant learning and training. If you’re worried putting a job shop software solution in place is going to be complex and confusing, that’s not necessarily the case.
A certain degree of computer literacy is necessary, of course, to implement a software solution at your shop but software providers have come a long way in creating user-friendly solutions. With point-and-click ease and basic understanding of what it is you’re doing – generating quotes, reviewing sales orders, checking inventory, ordering materials, reviewing A&Rs or P&Ls – even the non-techie job shop owner or managed can get up to speed fast. When you stack up the quick learning curve of a job shop software system against a manual, paper-and-spreadsheet-driven shop, you’ll soon reach your own conclusion about what is and isn’t complicated.
If you think your shop is too small to be able to afford and utilize job shop software, I hope these reasons might make you re-consider. There are a host of options out there to help you. Just because you can count your number of employees on one or two hands shouldn’t keep you from counting the reasons and adding up the dollars for using a software solution for your shop.
