Blogs

NetSuite ERP for Manufacturing Companies

August 06,2020

Manufacturing has perhaps undergone a significant transformation in recent years. Over the past decade, it has become quite complex. The manufacturing process today involves managing multiple suppliers, coordinating intricate production schedules, tracking inventory across locations, and meeting increasingly demanding customer expectations.

This is where NetSuite ERP steps in as a game-changer. NetSuite offers a comprehensive cloud-based solution designed specifically to address the unique challenges of modern manufacturing. It offers versatile functionality that suits small, medium, or large enterprises.

In this blog, we will explore why NetSuite has become the preferred choice for manufacturers worldwide.

What Is Manufacturing ERP?

Manufacturing ERP (Enterprise Resource Planning) is an integrated software system that consolidates all your business operations into a single, unified platform. This contrasts with traditional software, which manages individual functions in isolation.

A Manufacturing ERP system connects your finance, accounting, human resources, supply chain, production, customer service, and inventory management seamlessly. The benefits are quite easy to understand. Instead of data scattered across different systems, ERP provides you with a single source for all your operations.

In essence, a manufacturing ERP includes modules designed for production planning, inventory control, bill of materials (BOM) management, work order processing, and quality assurance. These modules are separate, but interconnected. The ERP system thus helps you optimize your production workflow, reduce waste, and improve decision-making across your entire organization.

MRP vs. ERP: What's the Difference?

Before checking if you need ERP for manufacturing, it is a good idea to understand the differences between MRP and ERP.

Material Requirements Planning (MRP) –It is a specialized software system focused exclusively on production-related activities. It excels at specific tasks: inventory control, production scheduling, bill of materials management, demand forecasting, and purchase planning. If your primary concern is optimizing how materials flow through your manufacturing process, an MRP system can be highly effective.

Enterprise Resource Planning (ERP) – It takes a much broader approach. While it includes all MRP capabilities, it integrates these with financial management, CRM, HR, project management, and supply chain visibility. An ERP system manages your entire business, not just production.

The table below should give you a better idea-

Aspect	MRP	ERP
Scope	Limited to production and inventory management	Integrates all business functions (finance, HR, sales, supply chain)
Integration	Focused on manufacturing data	Unified data across the entire organization
Scalability	Limited growth potential beyond production needs	Scales with your business as you expand
Reporting	Production-specific reports require additional tools	Comprehensive cross-functional reporting and analytics
Cost	Lower upfront investment	Higher initial cost but delivers broader ROI
Best For	Small manufacturers with simple, linear processes	Growing manufacturers need integrated business visibility

Types of Manufacturing ERP Deployments

There are three distinct deployment modules you can choose from when implementing Manufacturing ERP.

On-Premise ERP

The ERP software is deployed on your own internal servers. You will have complete control over your data. The on-site deployment also provides you with a high degree of customisation. You can even deploy security protocols in tune with your specific regulatory requirements.

However, it will require a significant capital investment and needs specialised IT staff. It can also take a bit longer to complete the deployment.

Cloud ERP

Cloud-based ERP (also called SaaS—Software as a Service) is hosted on an external vendor's servers and accessed via the internet. NetSuite pioneers this type of deployment. Today, it has become one of the most common deployment modes for manufacturing ERP.

Cloud ERP offers lower upfront costs, automatic updates and maintenance, access from anywhere, and excellent scalability. This flexibility is particularly valuable for manufacturers with multiple locations or those planning expansion.

Hybrid ERP

A hybrid deployment combines cloud and on-premises systems. It lets you keep sensitive data locally while leveraging cloud capabilities for other operations. In fact, this approach should be the best among the three.

For most modern manufacturing operations, cloud ERP has become the preferred choice due to lower costs, faster implementation, built-in scalability, and vendor-managed security updates.

Core Manufacturing Features in NetSuite ERP

The Manufacturing ERP from NetSuite comes with several modules.

Inventory and Warehouse Management

NetSuite offers real time visibility into inventory across multiple locations. This would help manufacturers to track raw materials, work-in-progress (WIP), and finished goods simultaneously. The system can effectively track inventory, trigger reorder points, and manage all the warehousing operations.

Production Planning and Scheduling

The ERP supports both basic and advanced manufacturing and adequate production planning and scheduling. Advanced Manufacturing includes finite capacity scheduling using Gantt charts. This prevents the common manufacturing problem of bottlenecks holding up production lines.

Bill of Materials (BOM) Management

The advanced BOM features allow you to define multiple versions of product specifications, track changes throughout the product lifecycle, and apply different BOMs at various production stages. The yield-tracking feature helps you identify material waste and optimize procurement decisions.

Work Order and Assembly Management

When an order is created in NetSuite ERP, the system automatically reserves inventory, calculates expected costs, and slots the order into your production schedule. As manufacturing progresses, actual material consumption and labor hours are recorded in the system.

Shop Floor Control and Mobile Manufacturing

This module provides real-time visibility into production activities. This digital interface eliminates paper-based work orders and reduces data entry errors. Operators can use mobile devices or shop floor tablets to clock in, record job progress, report downtime, and capture production data via barcode scanning.

Quality Management System (QMS)

The quality management module enables manufacturers to define inspection plans, record in-process and incoming inspection results, document non-conformances, and automate compliance reporting. This should be a practical option for manufacturers operating in regulated industries.

Supply Chain and Procurement

Integrated procurement management automates purchase order creation based on production needs, manages vendor relationships, controls inventory levels across locations, and provides visibility into supply chain operations.

Business Benefits of Using NetSuite ERP for Manufacturing

The real value of the NetSuite Manufacturing ERP would be evident only when you are witnessing the practical business outcomes.

Here are a few outcomes that you can have access to when using Manufacturing ERP.

Operational Efficiency and Cost Reduction

Automated production scheduling helps reduce idle time and optimise resource utilisation. It can help you reduce operational costs by up to 75%. Automated workflows eliminate manual data entry across departments.

Improved Financial Management and Visibility

Real-time financial visibility is a game-changer for manufacturing. Your finance team can see actual production costs as they occur, not weeks later. Many NetSuite customers report reducing their financial close time by 40-50%.

Better Inventory Control and Reduced Carrying Costs

You can help you with effective inventory management. The ERP helps you with optimal inventory levels. The companies typically reduce inventory costs by up to 30%. This frees up working capital for reinvestment in growth initiatives.

Faster Order Fulfillment and Reduced Lead Times

NetSuite's integrated order management system connects customer orders directly to production planning. This integration typically reduces order-to-fulfillment time and helps you meet customer delivery commitments more consistently.

Scalability for Growth

NetSuite's cloud-based architecture scales seamlessly with your business. You don't face the limitations of legacy systems that require costly infrastructure upgrades every time you scale.

When Is the Right Time to Implement NetSuite ERP for Manufacturing?

To achieve the best ROI, it is important to determine the right time to implement NetSuite ERP for manufacturing.

Here are a few important considerations that can help you decide the right time to implement Manufacturing ERP.

1. Reporting is slow or incomplete: Your finance team relies heavily on manual spreadsheets and data gathering from multiple sources.

2. Departments operate in silos: Production, purchasing, finance, and planning teams use disconnected systems that don't communicate.

3. Critical processes are spreadsheet-based; manual entry introduces errors, version conflicts, and inefficiencies

4. Real-time visibility is lacking: You can't instantly answer questions about inventory, production status, or financial performance.

5. Inventory is excessive: You're overstocking products or making last-minute purchases because of poor forecasting.

6. Supply chain visibility is weak: Long supplier lead times and a lack of procurement visibility create disruptions.

The right time to implement Manufacturing ERP is when your organisation is in a stable period. Never implement it during peak periods or organisational changes.

How Much Does NetSuite Manufacturing ERP Cost?

NetSuite pricing varies based on several factors. It is important to understand your specific needs and choose an appropriate pricing structure.

Software Licensing Costs

NetSuite offers tiered editions:

1. Limited Edition: Starting at approximately $499-$999/month

2. Mid-Market Edition: $599-$2,599/month

3. Enterprise Edition: $999-$1,999/month

Any additional modules will be charged separately.

Per-User Licensing

Beyond the base platform cost, NetSuite charges approximately $120- $125 per user per month, with a minimum of 10 users.

The additional costs would include Implementation and Professional Services. Costs would vary across small, mid-sized, and large enterprises.

Total Cost of Ownership

For a mid-market manufacturer, a typical first-year investment ranges from $50,000 to $150,000, including licensing, implementation, training, and initial customizations.

How to Set Up NetSuite Manufacturing ERP?

It is essential to understand the implementation process for a smooth transition.

Phase 1: Discovery and Planning (2-4 weeks)

This is the foundation process. Your NetSuite partner will conduct a detailed discovery session to understand your manufacturing workflows, identify pain points, and design a solution aligned with your specific needs.

Phase 2: System Design and Configuration (3-6 weeks)

NetSuite is then configured to suit your requirements and workflows. This includes setting up your chart of accounts, defining user roles and permissions, creating approval workflows, configuring manufacturing parameters, and building custom workflows where needed.

Phase 3: Data Migration and Build (3-6 weeks)

All your existing data is backed up and migrated to NetSuite manufacturing ERP. This phase also includes developing any necessary custom features or integrations with third-party systems, such as CRMs or ecommerce platforms.

Phase 4: Testing (3-6 weeks)

Comprehensive testing ensures the system runs successfully across your enterprise. Any issues detected during this phase are resolved before going live.

Phase 5: Training and Go-Live (4-8 weeks)

Your team receives comprehensive training covering their specific roles. A detailed cutover plan is executed on your go-live date, with your legacy system data fully migrated and NetSuite assuming operational responsibility.

Wrapping Up

NetSuite ERP has emerged as the solution of choice for manufacturers seeking to optimize operations. But choosing the right ERP partner is just as important as selecting the right software. Jobin and Jismi's expert team ensures your NetSuite implementation delivers maximum value and accelerates your path to operational excellence.

Our technical proficiency and change management expertise make us a trusted partner for manufacturers looking to maximize their NetSuite investment. We have an expert team that ensures your NetSuite implementation delivers maximum value and accelerates your path to operational excellence.

Contact Jobin and Jismi today to schedule your consultation and take the first step toward manufacturing excellence.

Frequently Asked Questions

What manufacturing methods does NetSuite support?

NetSuite supports discrete manufacturing, assemble-to-order, make-to-order, and configure-to-order models. It can manage both simple and complex production workflows. This flexibility allows manufacturers to adapt NetSuite to their specific production style.

Does NetSuite handle Process Manufacturing?

NetSuite primarily focuses on discrete manufacturing. However, it can support process manufacturing scenarios using custom configurations and partner solutions. This makes it suitable for industries with formulation-based or batch-driven processes when configured correctly.

What is NetSuite Advanced Manufacturing?

NetSuite Advanced Manufacturing extends basic manufacturing features. It includes finite capacity scheduling, Gantt charts, work center management, and shop floor control. These features help reduce bottlenecks and improve production efficiency.

How are costs tracked in NetSuite Manufacturing?

NetSuite tracks costs in real time across materials, labor, and overhead. Actual costs are recorded as production progresses. This allows manufacturers to compare planned vs actual costs and maintain accurate profitability analysis.

Is NetSuite suitable for small to mid-sized manufacturers?

Yes, NetSuite is well suited for small to mid-sized manufacturers. Its cloud-based model reduces infrastructure costs while offering scalability. Businesses can start small and expand features as operations grow.