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I was once showing a prospect an ERP solution, and the business owner asked “What does this ERP system specialize in?” “Wholesale / Distribution”, I replied. “Woop-de-do,” was the response, “so do 90% of all ERP systems”.
That was back in the days when ERP Systems tried to be “all things to all people”. Specialist industries tended to have in-house systems, or systems from small local vendors, that they struggled to maintain.
Traditionally, Horizontal solutions were little more than accounting systems with inventory management added on.
These days, a Horizontal solution may be found even in a supposed Vertical market.
Let me explain.
A “Manufacturing ERP” that purports to meet the needs of all manufacturers is a horizontal.
“Wholesale Distribution” as mentioned above also does not describe a vertical solution.
How specific to your business the features of an ERP System need to be, is one of the considerations when choosing a new system.
No two business are the same, and even between two businesses seemingly in the exact same business, there are differences based on their individual business models, size, who they market to, and how they distribute their products.
Manufacturing can broadly be broken into two major segments: Discrete and Process. Discrete is concerned with the making of things, using Bills-of-Material where virtually everything can be counted, and where very many components comprise the final product. Process is where products are made by mixing wet and dry ingredients together using a recipe or formula, where the units of measure are weight or volume, and where typically a product involves the processing of one main ingredient, albeit with other additives.
Within discrete manufacturing, there are very many different segments, such as Automotive, Hi-Tech & Electronics, Telecommunications, Medical Devices, etc.
Process manufacturers also has many broad segments: Food, Beverage, Chemicals, Coatings, Pharmaceuticals, Nutraceutical.
Each of these are broadly considered “Vertical” industries, however the breadth and specialisation in manufacturing demands another layer: Micro-verticals.
The Beverage industry has many sectors: Milk, Soft drinks, Beer, Wine, Spirits, etc. Some, like Sports drinks and supplements, have a cross-over with the Nutraceutical industry.
The Hi-Tech & Electronics likewise has many sectors: Semiconductors; LED lighting; Computers; Solar panels; Telecom products; Industrial electronics; Consumer electronics; Electronic Components; Rechargeable batteries; Digital cameras/imaging; to name but a few. Even these sectors have many divisions. There is also cross-over with both the Medical Device and Pharmaceutical industries.
The Medical Device is also diverse, and can first be broken into the Regulatory Classes they fall into. They can be as simple as Disposable Gloves, Tongue Depressors and Thermometers. They can be higher-level devices like surgical instruments, insulin pumps, dental instruments, syringes, catheters, and dental implants. They can be as complex as implants like Stents and Pacemakers, Prosthetics, Diagnostic apparatus, to Robotic Surgeons. Some even have the ability to be remote controlled or send health information to professionals, opening up the whole area of security.
Even within a specific micro-vertical, there can be differences: the regulatory framework level the products fall under; distribution requirements that take into account the size of the product, whether it needs to be stored and transported in a chilled or frozen environment, whether it has a shelf-life; and more.
So, how do you evaluate an ERP solution as being suitable for your micro-vertical?
A Micro-vertical solution may be right for if:
Why a Vertical / Micro-vertical ERP solution?
There are some very good reasons you should seriously investigate solutions for your specific industry sector:
Download our product brochure to see how OptiProERPs- an end-to-end manufacturing ERP combines financial management, supply chain, CRM, and industry-specific solutions in one seamless system and gives you the foundation to scale and compete in todays digital world.