The Steel Industry Evaluates ERP Systems
The steel industry has historically used tailor-made systems to get the necessary information processing support for the manufacturing flow. Corporate finance, human resources, and procurement were usually run on tailor-made or highly customized software packages separate from the manufacturing flow.
ERP systems were sometimes taken into consideration but were then designed for discrete manufacturing industries rather than for process industries like steel.
A Question of Time and Price
Steel companies typically buy different applications from several suppliers. A substantial investment of time and resources is then required to develop, implement, modify, and interface these separate parts.
Upgrading is another negative aspect - changing any individual program becomes difficult due to the customization required to piece the applications together again. Larger steel companies would buy applications from different suppliers (or develop them in-house) and complete the necessary interfacing with the help of large IT departments. They could afford it.
To ERP or Not to ERP
For quite a while, companies in the steel industry went on developing their own systems or piecing together applications from multiple suppliers, while their counterparts in other industries used ERP systems. ERP systems have continuously improved according to user demands. Current ERP systems have achieved a high level of efficiency and perform excellently in financial, supply chain, or other general business areas.
The question for ERP business solutions is: Does an ERP business solution provide adequate functionality, at an affordable price, and at the right time?
Switching to Industry Specific Solutions
A lot has changed in the last few years. Today, steel companies are spending more time looking into different ERP solutions. At the same time, ERP suppliers are working to develop functionality that meets the specific requirements of the steel industry.
The best system for a company is one that has been specifically designed for use in its industry and can be implemented quickly; ideally, in 6 to 12 months.
The Process
Although some companies continue to select function-specific systems or develop their own, everyone is taking the time to evaluate ERP systems. What we see now is just the beginning of the evaluation and selection process.
The steel industry is looking for a proven ERP supplier knowledgeable about their industry. Steel companies in the industry need flexible, low-cost solutions designed to handle the complexity of their business and manufacturing processes.
It is expected that this market will grow quickly in the coming years, and continue with substantial long-term growth.
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