In response to the need to drive efficiencies and compete on a global market, some clear technology trends have emerged in the manufacturing industry. Carsten Pedersen reports.
Australian manufacturers often struggle to compete with overseas manufacturers that have lower overheads and easy access to the largest global marketplaces. In a relatively isolated country and with the high costs associated with manufacturing, Australian companies have to find ways to compete more effectively or risk going out of business.
Reducing costs as much as possible is only one part of the equation. Australian companies must develop processes that make them more efficient. This can include using software that gives the management team an overarching view of the company and its operations.
In response to the need to drive efficiencies and become more productive, some clear technology trends have emerged in the manufacturing industry.
While each trend delivers specific benefits, there’s an overarching trend that seeks to leverage the collective advantages of technology, while at the same time avoid the old problem of disparate and siloed information systems.
The rise of ERP
Smart manufacturers are adopting new technologies that directly align with and support their business strategies, specifically ERP solutions. ERP can be a powerful business tool that integrates all of the different functions and processes of a business into one complete system. The result is a streamlined and comprehensive view of everything, from financials and staffing to logistics and customer relationship management.
For example, an ERP system tracks sales orders and integrates them with logistics, fulfilment, inventory management and customer relationship management systems so that the business gets an instant, overarching view of every customer’s behaviour and every product’s performance. It is the integration of the information that makes ERP so powerful: it removes doubt and error from the reporting process and lets each business function operate in concert with the others.
Manufacturing organisations can achieve a competitive advantage if they use the right ERP system thanks to the granular level of reporting that can be delivered. This lets business leaders make better-informed decisions that can help reduce costs and suggest new business directions.
There are five key technology trends in addition to the adoption of ERP systems that can potentially increase the manufacturing industry’s competiveness.
1. Cloud technologies. Manufacturers are becoming more decentralised. However, scaling IT resources to every new location or delivering IT support services across time zones and cultures creates a services challenge and cost burden. Using cloud solutions to offload application installation, operation and support across locations can better manage costs and improve services.
2. Lean manufacturing. While lean manufacturing has sought to eliminate waste and non-value added expenditures from the production process since the 1990s, only in the last several years have the market-leading manufacturing business systems fully enabled this production practice from a technology perspective.
For example, manufacturing systems such as Microsoft Dynamics ERP have enhanced project accounting and cost accounting modules with deep integration to both finance and core manufacturing processes to identify waste and thereby preserve value with less work.
3. Supply chain optimisation. There is a continued morphing of manufacturing systems and supply chain management systems into single solutions. This trend is part of a bigger trend in which best-of-breed business applications are being replaced by integrated business suite solutions. Manufacturers are increasingly turning to the supply chain to reduce cycle times, lower inventory, accelerate customer fulfilment and decrease distribution costs.
4. Customer relationship management. Manufacturing companies have a reputation of using customer relationship management (CRM) systems for the bare minimum; essentially as ‘systems of record’ for prospects and customers. However, as customers are now more connected, more informed and have more options, companies must rethink their CRM strategy, processes and software.
For example, customers are now more active in requesting ethically-sourced products and want to understand the full lifecycle of the products they believe are right for them. And they’re sharing their findings with others and entire online communities in social networks and Internet forums.
To meet these customers where they congregate, CRM software systems have evolved to include social CRM tools which leverage social listening and collaboration apps to better identify and engage social patients where they communicate.
5. Business intelligence (BI). Historically, BI systems have fallen short of delivering (near) real-time information with easy-to-read analytics and actionable insights. But that’s changing. The scope of BI has advanced from simple dashboards on the front-end and sophisticated data warehouses on the back end to also include rapid and self-service BI.
Like all technology trends, this advancement is heavily dependent upon business process and, in this case, knowing what measures impact business performance most. Manufacturers that can identify the most salient metrics, and deliver the right information to the right people at the right time, will empower those people to make better business decisions.
[Carsten Pedersen is a senior executive with UXC Eclipse]