Open-source software can close functional gaps

Despite learning curve, manufacturers appreciate benefits of open-source ERP

Jim Fulcher, contributing editor -- Manufacturing Business Technology, 8/19/2009 7:38:00 AM

One of the most frequently cited challenges associated an ERP implementation is determining how to make the system match the company's unique business processes or data requirements.

Wes Jacobs, GM of Creamer Metals Products, likes results from open-source ERP, though he thinks vendors should offer more education on the difference between open-source and traditional software.

The search for an easy way over that hurdle is leading some manufacturers to open-source solutions.
For instance, OSG Europe, the Belgium-based European headquarters of OSG Corp., recently adopted an ERP package called Compiere that is both open-source and cloud-based.
The company that supplied the solution-also called Compiere-describes it as "modern, model-based" solution that makes it easy to adapt and extend without programming.
OSG Europe is a multinational manufacturer and distributor of precision cutting tools used in the automotive, aerospace, and precision instrument industries. Nobu Osawa, the company's managing director, said an evaluation of the Compiere system indicated it would be easy to customize to the company's unique requirements while also offering a low total cost of ownership.
Following the implementation, Osawa said, that belief has been confirmed. With the software, OSG Europe has streamlined operations such as order processing, inventory management, shipping, purchasing, financial analysis, and accounting.
"Compiere provides a modern, cost-effective ERP solution that not only delivers visibility and efficiencies across our operations, but also allows us to quickly and efficiently customize and upgrade it to meet our evolving needs," Osawa said.
Creamer Metal Products, a manufacturer and distributor of material-handling equipment for the grain industry in the agricultural community, selected an open-source ERP system from xTuple to accommodate the ups and downs of the business cycle.
During the ethanol boom at the end of 2006, Creamer Metal saw demand for its products skyrocket, and management realized the company needed a "heavy lifting" business application that extended beyond the QuickBooks system it was using, says Wes Jacobs, general manager, Creamer Metal Products. At the same time, the company did not want to invest time, money, or other resources in a large ERP package that could not be scaled down when the rapid influx of slowed down.
Jacobs admits there are drawbacks to using an open-source solution rather than a standard ERP application. For example, the solution's documentation had less detail, and support seemed to be more geared toward addressing issues raised by the broader community of developers working on the product rather than on Creamer's specific problems.
Jacobs also believes xTuple customers would be well served with a little more education on how working with an open-source solution differs from adopting traditional applications. Partly because of that lack of knowledge, Jacobs says, user training took longer-and was more difficult-than expected.
Still, Jacobs believes the benefits derived from the open-source solution far outweigh its shortcomings.
"The xTuple solution offers low cost without sacrificing functionality, and it features a user-friendly functionality that follows practical standards," Jacobs says. "For example, the quote-to- invoice process is seamless; work orders can be created in seconds; and drill-down menus for work orders deliver all of the information users need to make sound decisions,
"Additionally, Ned Lilly [xTuple's president and CEO] has created an unusually open approach to customers, and provides a great deal of information about the products xTuple offers. He also listens to customers and takes necessary action. Finally, we regularly receive product updates that add functionality."