#IAMROBOTICS, I created an ERP/MRP system from scratch, alone.
IAMRobotics was a new startup and was trying to scale from a 10-employee company into a 100-employee professional corporate environment with their newly granted Series “A” funding. My original role was to work with engineering to find vendors, purchase materials, and get them to manufacturing on an as-needed basis with no real tracking or structure. I recognized there was a need to establish an organization that accounts for the supply chain and connected financials for the purchasing and manufacturing processes. The company had no centralized “Enterprise Resource Planning” or ERP system other than an Excel spreadsheet and QuickBooks to account for payroll and annual tax documentation on financials. Inventory and manufacturing were not recording their processes or financial usage at the time so a system needed to be developed to help in this process.
So I decided to make an ERP & MRP system for the company in its first stage of growth.
Goals Of ERP/MRP Project
To establish an interim ERP System for centralized business intelligence. Create standard operating procedures and metrics, cost centers & attributions to aid in the financials role to attribute cash flows to the respective departments to organize the true cost of products and business centers. We will need to create a costing and buying process, account attribution, budgeting and constraints, and variable costs of materials acquisitions. With this information we can develop KPIs for the growth of supply chain efficiency to; cost strategies, separation of duties, and streamlining to a centralized purchasing function or portal.
Stage 1 Implementation:
Initially, all we had was Excel and some tribal data from several employees who were tracking some of their work and material usage but none of this was usable in a back-end business sense so financials could correctly be attributed to the ledger. Additionally, all employees were purchasing with a couple of company credit cards in the owner’s name and they were paying off the balance as funding came in, again no tracking or structure just keeping the ship moving with parts and fingers crossed that the accountant could keep up.
I started by taking away everyone’s credit cards, blanket purchase orders, and worksheets and consolidating them into a master sheet that myself and the financial controller would handle so that we centralized all information for ease of tracking and data searchability. It was our makeshift ERP that we used for a couple of weeks. I then set up a JIRA ticket system so that all employees could submit a purchase request for an item thereby creating an ability for finance to allocate budget to that request, approve or deny the purchase, and keep a log of all information on that specific purchase. Each purchasing requisition had 2 levels of approval so that multiple business centers could track and control spending or other project variables. All purchasing was done by myself and a buyer I had hired so we knew all of the acquisitions in the company and could attribute traceability.
Stage 2 Quickbooks
Next, I had to upgrade and migrate all this information to Quickbooks to track all materials for inventory and all financials related so the process could be more automated and lessen the workload for the two of us handling it. By using the centralized Excel spreadsheet I was able to mass upload all information into QuickBooks to have a centralized ledger for finance and by doing a cycle count of all materials on hand the company could know its assets and movements as well.
Upgraded Benefits:
A centralized vendor information portal and we’re able to cut purchase orders instantly via the system.
Trackable metrics to create standards for our supply chain.
Material flow; lots, counts, usage.
Stage 3 Fishbowl MRP
We soon found out that QuickBooks was not able to account for our assemblies and manufacturing processes so another pivot was needed to include a Materials Requirement Planning system, or “MRP” system as well. I had shopped around but with our shoestring budget and small business footprint, the large-scale systems were just out of our reach and not needed. I landed on a system called Fishbowl. Because of our centralized and accurate data in QuickBooks, we were able to export the entire system of data over to Fishbowl in one weekend and by Monday our manufacturing team could now properly function as needed.
Stage 4 Full Stand Up
With the MRP system set up we could now also create our manufacturing pipeline and include processes such as step instruction and quality control points to assure product excellence and cut back on unnecessary financial troubles or manual labor created confusion in the process.
With the ERP and MRP system online and running the company went from random purchasing and placing of items somewhere in the building to a centralized system that could track all business units to the cent. We could now also create our manufacturing pipeline and include processes such as step instruction and quality control points to assure product excellence and cut back on unnecessary financial troubles or manual labor created confusion in the process.
In later steps: I built an inventory cage to control material movement, I was able to establish a bill of materials of our builds from Solid Works to directly integrate to our ERP and MRP, and we were able to attribute an as-built record to all individually built products from the past to account for legacy inventory purchases.
Conclusion
Three months later, what started as a garage band of 8 engineers, a couple of marking personnel, 1 financial controller, and 1 supply chain person, has become a 55-person full-scale company with a working ERP/MRP backbone. With all systems automating a majority of the clutter process we were able to keep our headcount and workload lower as we leveraged our digital assets to streamline most of the would-be manual processes, thereby allowing us to focus on the product and not the busy work. We saved an enormous amount of money not migrating to a tier 1 ERP system which was a windfall to our operational budget.
Engineering was now able to build and design a product that would directly output via a custom API to the ERP/MRP seamlessly cutting down on the manual labor to build individual Excel sheets. All revisions and workflows were captured to create universal metrics and legacy data.
The supply chain was able to take this information and set up an automatic purchasing system according to orders from marketing. All vendors and metrics were centralized so that steps now consolidated from multiple to just one, purchase orders.
Finance was then able to automatically pull a report from the system to capture all information needed for their role.
IAM Robotics was ready to scale. We went on to receive series B funding and triple in size over the years.