SALEM — Managing complex businesses and supply chains is a process fraught with potential pitfalls and human error, says Abisha Stone with the Salem-based Strategic Economic Development Corp., or SEDCOR.
For example, a grass seed or hazelnut farm in the Willamette Valley might have to schedule applications of fertilizer and pesticides during the growing season, hire labor for harvest, process and sort seeds and nuts after harvest, and match warehouse inventory and purchase orders for shipping.
“Many (companies), in my experience, are doing all those functions in Excel documents,” said Stone, Yamhill County economic development director for SEDCOR. “To have different people in different places in your business, doing separate documentation and trying to pull that together. ... There is opportunity for them to make significant mistakes.”
Enterprise Resource Planning software, or ERP, is one tool that can help, Stone said.
The software systems, typically custom-built by developers, combine different “modules” that integrate all of a business’ internal and external resources under one program — including assets, cashflow, purchasing, inventory and payroll.
The problem, Stone said, is small and mid-size businesses often cannot afford the tens of thousands of dollars per month it takes to buy and host ERP software, putting them at a competitive disadvantage.
“There just tends to be a much more complex, complicated and time-exhaustive process for capturing all that data and sharing it with one another,” Stone said. “For small businesses, even just managing the procurement and scheduling is a huge juggling act.”
Buildable, a software company in McMinnville, Ore., is now working with SEDCOR and other local economic development groups to create an open-source ERP platform, called OregonERP, allowing smaller businesses to capitalize on the technology.
Open-source software, as opposed to proprietary software, means that anyone with the source code can access and modify the program.
In December, Business Oregon awarded a $211,250 grant to finish the final two phases of development, including implementation and marketing. Stone said the modules for OregonERP should be tested and completed by the end of September.
“It really is a true game-changer for small to mid-size businesses to have access to systems like this, that they can actually afford,” she said.
According to SEDCOR, Oregon has approximately 6,200 manufacturing businesses — including value-added farms and food processors — that employ more than 200,000 people, making up 21% of the total value of goods produced across the state.
Of those, 5,000 manufacturers, or roughly 80% of the state’s total, employ 20 people or fewer.
While typical ERPs may cost between $75,000 to $750,000 a year, OregonERP will cost clients less than $12,000. And since the software is open source, it can be easily customized.
“We believe all manufacturers, regardless of their size, should have access to a tool that helps them understand all of their costs so they enter the market at the right price,” Stone said.
Other partners in the project include the Oregon Manufacturing Extension Partnership and McMinnville Economic Development Partnership.
“This will have a really meaningful impact on the manufacturing community, not only in Yamhill County but across the state,” said Scott Cooper, executive director of the MEDP.