Manufacturing Software for Small Business: What to Look For and How to Choose

Aleksander Nowak · 2026-02-16 · Comparisons

Learn how to choose manufacturing software for small business. Understand MRP vs ERP, essential features, pricing tiers, and common mistakes to avoid.

Manufacturing Software for Small Business: What to Look For and How to Choose

Running a small production business means juggling schedules, material orders, customer shipments, and inventory counts — often with a tiny team and limited resources. At some point, spreadsheets stop working. Orders slip through cracks. Stock counts don't match reality. You need better tools.

Production management software helps small businesses handle these challenges. But the market is overwhelming: hundreds of options ranging from free apps to six-figure enterprise systems. Many are designed for large corporations and are overkill for small operations.

This guide explains what these tools actually do, which types fit small businesses, and how to choose without getting burned by oversold features or hidden costs.

What Does This Software Do?

Production software manages the information side of making products. It tracks what materials you have, what you need to make, what orders are waiting, and what's been shipped.

At its core, these systems answer basic questions: - How much of each material do we have? - What do we need to produce today? - Do we have enough materials for upcoming orders? - What did we ship last week? - Which orders are late?

Answering these questions manually — checking shelves, updating spreadsheets, sending emails — takes hours daily. The right software automates tracking so you can focus on actual production.

Types of Manufacturing Software

The market uses confusing terminology. Here's what the main categories actually mean:

Inventory Management

Basic inventory software tracks quantities: what's in stock, what's coming in, what's going out. Good for retail or distribution but limited for manufacturing.

Limitation: Doesn't understand that you turn raw materials into products. Can't calculate material requirements or track work-in-progress.

MRP (Material Requirements Planning)

MRP software adds manufacturing logic. It knows your recipes (bills of materials) and calculates what materials you need based on what you plan to produce.

Key features: Bills of materials, production planning, material requirements calculation, purchase planning.

Best for: Small manufacturers who need to plan production and manage raw materials. This is typically the sweet spot for businesses with 5-50 employees.

ERP (Enterprise Resource Planning)

ERP systems integrate everything: manufacturing, inventory, sales, purchasing, accounting, HR, and more. They're comprehensive but complex.

Key features: All of the above plus financial management, CRM, human resources, advanced analytics.

Reality check: Most ERP systems are built for companies with $10M+ revenue and dedicated IT staff. They cost more, take longer to implement, and include features small businesses don't need.

MES (Manufacturing Execution System)

MES software tracks production in real-time on the shop floor: machine status, labor time, quality data, downtime reasons.

Best for: Operations where detailed shop floor tracking matters — usually discrete manufacturing with multiple machines and work centers.

Reality check: Overkill for small batch producers. If you're making cosmetics, food products, or similar goods, you don't need MES complexity.

What Small Manufacturers Actually Need

Forget the acronyms. Focus on capabilities that solve real problems:

Inventory Tracking for Raw Materials and Finished Goods

Know what you have without counting shelves. See quantities in real-time. Get alerts when stock runs low.

Why it matters: Running out of a critical material stops production. Overstocking ties up cash. Accurate inventory prevents both.

Bills of Materials (Recipes)

Define what goes into each product: 500g of ingredient A, 200ml of ingredient B, 5 units of packaging C.

Why it matters: Without recipes in the system, you're calculating material needs manually every time. The system should know that making 100 units of Product X requires exactly these materials in these quantities.

Production Recording

Record what you made, when you made it, and what materials were consumed.

Why it matters: This closes the loop. When you log production, materials automatically deduct from inventory. Finished goods automatically add. No separate updates needed.

Order Management

Track customer orders from receipt to shipment. Know what's been ordered, what's in production, what's ready to ship.

Why it matters: As orders increase, tracking them in email or spreadsheets fails. You need a single view of all orders and their status.

Basic Reporting

See what's happening: inventory levels, production output, order status, sales trends.

Why it matters: Without reports, you're flying blind. Good systems provide dashboards and reports that answer key business questions.

Batch Traceability (If Regulated)

Track lot numbers from incoming materials through production to shipped products.

Why it matters: Food, cosmetics, and pharmaceutical manufacturers need traceability for recalls and audits. Even unregulated businesses benefit from knowing which materials went into which batches when quality issues arise.

Features That Sound Good but Cause Problems

Some features marketed heavily to small businesses create more problems than they solve:

Advanced Production Scheduling

Sophisticated scheduling algorithms that optimize machine utilization, minimize changeovers, and balance workloads.

The problem: These features require accurate data about machine capacities, operation times, and constraints. Small manufacturers rarely have this data. The scheduling engine produces garbage output and people ignore it, reverting to manual scheduling.

Better approach: Simple calendar-based scheduling that shows what's planned for each day. Adjust manually as needed.

Comprehensive Financials

Full accounting, general ledger, accounts payable/receivable, payroll.

The problem: You probably already have accounting software (QuickBooks, Xero, or similar). Switching to a new financial system is painful and risky. Production tools trying to do accounting often do it poorly.

Better approach: Production tools that integrate with your existing accounting system. Keep financials where they work; use specialized tools for operations.

Shop Floor Data Collection

Detailed tracking of labor hours, machine cycles, downtime events, quality measurements at each work center.

The problem: Requires discipline to record everything. Small teams with varied tasks resist the overhead. Data collection becomes inconsistent and unreliable.

Better approach: Simple production recording — what was made, when, in what quantity. Add detail only for specific processes where it matters.

Endless Customization

Ability to customize every field, workflow, and report.

The problem: Customization takes time — yours or an expensive consultant's. Heavily customized systems are harder to upgrade and troubleshoot. Small businesses rarely need this flexibility.

Better approach: Software that works well out of the box with sensible defaults. Configure rather than customize.

How to Choose the Right System

Follow this process to avoid expensive mistakes:

Step 1: List Your Actual Problems

What's broken today? Be specific: - "We run out of materials without warning because nobody updates the spreadsheet" - "We don't know what materials we need to order for next week's production" - "Customer orders get lost between sales and shipping" - "We can't trace which material lots went into products when customers complain"

These problems guide your requirements. A system that doesn't solve your actual problems wastes money.

Step 2: Define Must-Have Features

Based on your problems, identify essential capabilities:

Everything else is nice-to-have. Don't pay for features you won't use.

Step 3: Set a Realistic Budget

Pricing in this category varies wildly:

For most small manufacturers (under $5M revenue), mid-range options provide the right balance of features and cost. Expect to pay $100-400/month.

Step 4: Evaluate 3-5 Options

Don't evaluate 20 systems — you'll get confused and make a worse decision. Pick 3-5 candidates based on: - Features that match your must-haves - Pricing within your budget - Reviews from similar-sized manufacturers - Free trial availability

Step 5: Test with Real Scenarios

During free trials, test with your actual products and processes:

1. Set up a few real products with their bills of materials
2. Process a real customer order through the system
3. Record production and verify material deductions
4. Generate reports you'd actually use
5. Have your team try it (not just you)

Software that feels clunky during a trial won't improve after purchase.

Step 6: Check Hidden Costs

Before committing, clarify: - Implementation fees (some vendors charge thousands for setup) - Training costs - Additional user fees - Data migration costs - Contract terms and cancellation policy - Price increases after the first year

Cloud software should be straightforward: monthly fee, cancel anytime, updates included. Be wary of long contracts or complex pricing.

Common Mistakes When Choosing

Buying Based on Features You Might Need

"We might need advanced scheduling someday" leads to paying for complexity you don't use. Buy for today's needs. Good systems let you add capabilities later.

Choosing Based on Demo Impressions

Demos are sales presentations optimized to look good. A system that demos well might be painful to use daily. Insist on hands-on trials with your own data.

Selecting the Cheapest Option

The cheapest option often lacks critical features or provides poor support. When problems arise (and they will), responsive support saves more than you saved on subscription fees.

Over-Investing in Enterprise Software

NetSuite, SAP Business One, and similar enterprise systems are powerful but designed for larger companies. Implementation takes months. Customization requires consultants. Total cost far exceeds subscription fees. Small businesses rarely need this complexity.

Underestimating Implementation Effort

Any new software requires setup: entering products, materials, suppliers, customers. Plan for 2-4 weeks of part-time work to get started. Systems promising "instant setup" either lack features or defer the work until you need those features.

Making the Transition

Moving from spreadsheets (or another system) to dedicated production tools involves several phases:

Preparation (1-2 Weeks)

Clean up your product and material data. Remove obsolete items. Standardize naming conventions. The cleaner your input data, the smoother the transition.

Initial Setup (1-2 Weeks)

Enter or import your products, materials, suppliers, and customers. Set up bills of materials. Configure basic settings.

Parallel Operation (2-4 Weeks)

Run both systems simultaneously. Enter transactions in the new system while maintaining your existing process. This catches setup errors before they become problems.

Full Transition

Once the new system produces reliable results, stop updating the old one. Keep historical data accessible but stop active use.

How Krafte Fits Small Producers

Krafte is built specifically for small manufacturers — not adapted from enterprise systems or retail inventory tools.

Bills of materials: Define recipes for all your products. The system calculates material requirements automatically.

Inventory management: Track raw materials, work-in-progress, and finished goods. Real-time quantities without manual updates.

Production recording: Log completed batches. Materials deduct automatically based on recipes. Finished goods add to inventory.

Order management: Track customer orders from receipt to shipment. See status at a glance.

Batch traceability: Record material lot numbers. Track which lots went into which production batches. Trace forward and backward for quality issues.

Low stock alerts: Set minimum levels. Get notified before running out.

Supplier management: Track deliveries, monitor supplier performance, manage incoming orders.

Simple pricing: Flat monthly fee based on usage tier. No implementation fees, no long contracts, no hidden costs.

Quick start: Most customers are operational within a week. No months-long implementation projects.

The goal is a system that handles what small producers actually need without the complexity designed for large enterprises.

Frequently Asked Questions

What is manufacturing software?

Manufacturing software manages the information side of production — tracking inventory, managing bills of materials, recording production output, processing orders, and generating reports. It replaces spreadsheets and manual tracking with automated systems.

How much does manufacturing software cost?

Costs range from $20/month for basic inventory tracking to $2,000+/month for comprehensive enterprise systems. Most small manufacturers find good options in the $100-400/month range, which includes inventory, production, and order management.

What's the difference between MRP and ERP?

MRP (Material Requirements Planning) focuses on production: bills of materials, production planning, and material calculations. ERP (Enterprise Resource Planning) includes MRP plus accounting, HR, CRM, and other business functions. Small manufacturers usually need MRP capabilities, not full ERP.

Do I need manufacturing software or just inventory software?

If you simply track purchased products, basic inventory software works. If you manufacture products from components (even simple assembly), you need software that understands bills of materials and production — that's manufacturing software.

How long does it take to implement manufacturing software?

For cloud-based systems designed for small businesses, expect 2-4 weeks from signup to daily use. Enterprise systems can take 6-12 months. The difference is complexity and customization requirements.

Can I migrate from spreadsheets?

Yes. Most manufacturing software accepts imports from CSV or Excel files. You'll need to clean and format your data, but migration is typically straightforward. Plan for a parallel operation period where you run both systems to verify accuracy.

Tags: ERP, MRP, Small Business, Manufacturing