Many functions, such as accounting, are relatively standardized and therefore not considered here. Instead, this blog will focus on a few things that, while not necessarily unique to furniture companies, will certainly present challenges when trying to apply ERP there. The two areas where ERP systems and ERP implementers most often encounter difficulties are manufacturing and sales.
The first challenge on the manufacturing side involves stock management of wood and fabric or coverings. Wood can have multiple units of measurement, wood and its requirements can be measured by volume, area, length, or number of pieces (such as plywood), and it may be necessary for a company to use multiple units of measurement for any particular project. They may be purchased by board feet or cubic feet, instruct warehouse staff to move by pallet, and specify their use on the bill of Materials by area, in which case the procurement system, the inventory control system, and the bill of Materials need to identify different units.
The usual way to deal with this in an enterprise resource planning system is to publish theoretical usage to each work order (some systems allow waste percentages to be kept separately for easy adjustment based on experience) and record subsequent inventory adjustments to the appropriate general ledger account. This has advantages in standard costing systems that maintain a more accurate value for the product, but some companies prefer to maintain theoretical usage (no waste) on the bill of Materials to make it easier to determine the total cost of waste.
Not all ERP systems can meet the needs of the furniture manufacturing industry, but equally, it has some needs that ERP systems can help meet. Companies just need to be clear about what they want and make sure they choose a system that meets their needs.