How Manufacturers Drive Growth with ERP Software
Manufacturing in Australia and New Zealand gets a pretty tough wrap. Sure, there are competitive forces from international manufacturers which continue to pose significant challenges for our industry, but I believe there is plenty to keep our industry buoyant about the future.
According to the Australian Industry Group’s July 2016 figures, the Australian Performance of Manufacturing Index (Australian PMI®) increased by 4.6 points in July which forms part of a continued thirteen month recovery.
Additionally, New Zealand statistics show similar positive signs. According to Business New Zealand, in almost every month since October 2012, the manufacturing sector has been in expansion.
Resources for manufacturing growth
In considering what resources will take your business forward, it is hard to argue that two important resources are people and technology. If you get these two elements right, then you have a solid basis for growth. However, if either of these components is a weakness in your business, then performance of the other can suffer.
It is therefore fair to say, if your technology platforms can’t facilitate for your growth, then they are a handbrake for your success.
67% of Australian business leaders are concerned about whether their IT systems can cope with the complexity that growth brings. If you are part of this majority, then it is possible that your approach to business growth and innovation can become inhibited by the capacity of your technology resources. It may not even be a conscious approach, but simply the result of working with restrictive and cumbersome software for a sustained period of time.
Should you feel that this is the case in your business, then you need to take proactive and corrective action. If you don’t, then you run the risk of being left behind.
What does manufacturing growth look like
While the industry may have experienced recent periods of growth, it has not come from inaction and luck. The manufacturers that are most successful are those that embrace best practice processes and systems.
A recent survey of almost 1,000 manufacturers, from various countries, conducted by MORAR Consulting on behalf of Epicor, uncovered that 73% of manufacturers expect their business to grow in the year ahead. The survey’s findings (as detailed in this free eBook) also uncovered the five factors that were essential to the success of the manufacturers that reported growth over the prior 12 month period.
1. Good planning
As we discussed in last week’s blog, success is driven by effective planning, which is ultimately the result of using the right technology. This further highlights the importance of having your two key resources; people and technology, working together to help propel your business forward.
If your enterprise resource planning (ERP) software provides you with data in a contextual, easy-to-understand format, your users are much more likely to gather the insights they need so they can then take the appropriate action.
Like Benjamin Franklin once said; if you fail to plan, you are planning to fail.
2. Hard work and determination
While this factor really does speak for itself, I would hypothesise that without the right technology, and definitely without the right people, it is unlikely your business will experience a culture of hard work and determination.
When users are expected to work with cumbersome, complicated technology, then it is unlikely to inspire them to be determined to achieve success.
3. Agility and response to market demands
The business world today moves at break neck speed, which means that timely access to accurate data is imperative if your business is to be able to respond to a changing landscape.
Additionally, when the future brings with it so many unknown elements, it is important that your ERP software allows you to be flexible. For example, if your business grows to a level that requires relocating to a larger factory or opening additional facilities, would your current ERP software be an asset or a liability in such moments of growth?
4. Right technology & 5. Staff with the right skills
Based on the nature of the consideration used in discussing the three elements above, it is fair to say that businesses will find it hard to experience growth and success without these final two elements working hand in hand. However, once you do find you have the right team of people, operating with the right technology, then you stand a much better chance of driving growth.
Posted by Vince Randall, Regional Vice President, Epicor Software ANZ