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Tanner Montague came to town from Seattle having never owned his own music venue before. He’s a musician himself, so he has a pretty good sense of good music, but he also wandered into a crowded music scene filled with concert venues large and small.But the owner of Green Room thinks he found a void in the market. It’s lacking, he says, in places serving between 200 and 500 people, a sweet spot he thinks could be a draw for both some national acts not quite big enough yet for arena gigs and local acts looking for a launching pad.“I felt that size would do well in the city to offer more options,” he says. “My goal was to A, bring another option for national acts but then, B, have a great spot for local bands to start.”Right or wrong, something seems to be working, he says. He’s got a full calendar of concerts booked out several months. How did he, as a newcomer to the market in an industry filled with competition, get the attention of the local concertgoer?

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by Andrew Tellijohn
April 2004

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Made to order


Made to order

Manufacturers need software with special functions

by Neil Orman   Small-business management packages are designed to give business owners a total view of their enterprises. No type of company needs that kind of information more than a manufacturing firm.

Manufacturers have to track costs more closely than other firms, including raw materials or component costs, machine costs and inventory costs.

“They need to know how much a widget costs to make down to the hundredth of a cent,” says Marv Wold, president of Designed Business Systems, a Minnetonka-based technology consulting firm.

They need to precisely schedule what materials they’ll require at what time to meet job orders. “They never want a job to stop half-done because they are short on some material that should have been ordered for earlier delivery,” Wold says.

It’s also important that their systems schedule work flow to keep expensive machinery operating all the time, or almost all the time.

There are three main types of software to help small manufacturers manage such concerns:

• general small-business ERP packages such as MAS 90/200, SAP Business One or Traverse, all of which offer manufacturing functions;

• manufacturing-specific ERP packages such as SYSPRO Manufacturing;

• and broad-based accounting packages such as QuickBooks and Peachtree, both of which now offer special versions for manufacturers.

The vast majority of small firms are best suited for either general small business ERP packages or, for the smallest firms, manufacturing versions of QuickBooks or Peachtree. Small-business ERP is generally the best fit for small manufacturers, according to experts.

No more ‘bloody mess’
One small firm, Sportsman’s Recipes of Blaine, has direct experience with both of those main choices, as well as their weaknesses.

Laura Bolson is the controller for the six-employee firm, which makes a popular line of fish breading (for cooking fish and other foods) carried by sporting good stores such as Galyan’s and Gander Mountain. Like any manufacturer, her firm buys supplies — in its case mainly food products, additives and packaging materials — and combines them into a finished product.

Up until last September, she used QuickBooks to manage the books. But Bolson began to run into major problems last year.

“It wasn’t adequate for keeping track of inventories,” she says. “And we had problems with our retained earnings changing all the time. We wanted something that was a bit more stable.”

So the company migrated in September to Traverse, a small-business ERP package from Shakopee-based Open Systems. Bolson says the software was better suited to the needs of manufacturers.

Small-business ERP packages such as Traverse offer special manufacturing modules. Among the modules Bolson bought with the software were bill of materials, purchase order, inventory and manufacturing production. The firm only required a three-user license for the software.

Several months later, Bolson is still getting comfortable with the ERP system. But she says Sportsman’s Recipes has already seen improvements.

“My retained earnings stayed the same, and my end-of-year doesn’t look like a bloody mess like it did last year,” she says, referring to the annual financial report.

Still, Bolson says that QuickBooks was easier to use. She also says that buying and implementing Traverse was more expensive than she expected.

That cost included a $700 per-module cost for the software (the firm purchased 10 modules) and the cost of additional hardware needed to implement the system, including a new file server. Such new hardware requirements are not unusual in ERP implementations.

“I’m sure we’re over the $20,000 mark for the whole deal,” she says. “It’s always more than you expect.”

Repetitive manufacturing
In the next category, manufacturing packages like SYSPRO are geared toward repetitive manufacturing, or churning out a limited number of products without variation for different customers. But most small manufacturers take a “job shop” approach. That means they manufacture product to meet orders for clients, and frequently re-tool their production line for different customers.

In another case, Champlin-based Stage Equipment Co. of America discovered the hard way that a program tailored for manufacturers fell short.

SECOA makes stages for clients including Walt Disney theme parks and the Juilliard School of Music. In 1998, the company implemented a manufacturing software package, and then quickly experienced buyer’s remorse. (The company declined to name the software.) At the time, the firm’s revenue streams consisted of contract work; sales from a catalog of theater products such as lighting equipment, gels and paint; portable staging and custom manufacturing. (The firm has since sold the catalog unit.)

SECOA encountered two major problems with the manufacturing software. “It fell short in our ability to collect costs and have those costs accurately reflected in the financial statements,” says Mark Carter, the company’s information technology manager.

In addition, the manufacturing package did not account for nuances in SECOA’s business model. The firm is a manufacturer in the sense it takes raw materials and combines them into stages for clients. But like many small manufacturers, it customizes its offering and has to re-tool its production processes for different customers.

So the company needed software that was better at accounting and better suited for its business model.

SECOA eventually decided one program wasn’t enough for those challenges. First, the firm narrowed down its search for small-business ERP packages to three: Traverse, Navision and MAS 200. SECOA chose MAS 200, which accounted for most of its manufacturing needs.

For its needs as a job shop, the firm implemented software called Job Ops developed by its systems integrator, Synergistic Software Solutions of Minneapolis.

Job Ops allowed the company to structure jobs into sections and evaluate the profitability of each, and also account for costs within each section against defined budgets.

One of the biggest weaknesses of the previous system was that it lacked a link between purchase orders and sales orders. The Job Ops program provided the ability to create drop-ship purchase orders directly from the sales order. If a customer calls to inquire about the status of an order that hasn’t been received, even if it has not been invoiced, the firm can track it down because of this link.

It also allows the company to look at different jobs in the system and compare their needs against its open inventory of raw materials.

Job Ops is “more than just an inventory system,” Carter says. “It’s a complete production system.”

Carter offers a hypothetical related to its inventory management capabilities A job “may take 10 of part A and 10 of part B,” Carter says. “Then we look at our open inventory. We might see we have this many of A, this many of B, and we may be coming up for re-order of one of those materials because of this job.”

Finally, for very small manufacturers, a package like Peachtree or QuickBooks can be fine. Rachel Keogh, an accountant with St. Paul-based Lawrence Cumpston & Associates, who serves small-business customers, advises most of her clients to use QuickBooks. Even so, she admits such products may have limits for manufacturers.

“When you’re keeping track of all these pieces going into your product, you can only have so many pieces before you run into limits,” she says. “But for a non-manufacturing company with less inventory, you’re less likely to hit those limits and it works just fine.”

Keogh said the most important variable is the number of types of products and raw materials you track in inventory. “If it’s more than a few hundred, you may have problems,” Keogh says. “But I don’t have many clients who run into that.”

But Keogh says she hears many of the same complaints from clients using both QuickBooks and small-business ERP.

“The biggest thing I hear is that they have a hard time getting good, useful reports from them, because neither package is tailored to their business,” she says.

Laura Bolson, Sportsman’s Recipes: 763.780.3170; laurab@shorelunch.com. Mark Carter, SECOA: 763.506.8892; m.carter@secoa.com; www.secoa.com. Rachel Keogh, Lawrence Cumpston & Associates PLLP: 651.227.2333; rachelk@lwc-cpa.com. Marv Wold: Designed Business Systems; 952.541.5385; mwold@dbs1.com; www.dbs1.com