Why future-proofing your business involves more than a crystal ball
Despite production calculations and detailed expansion strategies, the drivers of growth can still be out of the hands of business leaders. Without accurate market forecasting (or perhaps a crystal ball), external factors are hard to accommodate in business plans, especially when there are unpredictable changes in the economy, new competitors enter the market or the latest technologies alter how customers use your products.
Perhaps it is no surprise that recent research from Aberdeen Group shows that ‘managing growth expectations’ is the number one challenge facing manufacturers today.1 This is certainly true for oil and gas businesses attempting to respond to the current price drops. Margins have been left weak and OPEC – the world’s oil cartel – has even had to abandon production targets for the first time in its history.
Likewise, manufacturers in China started to run into growth problems at the end of 2015, when the country’s vast manufacturing sector hit a three-year low. The sector is now struggling to gain momentum amidst a slowing economy and manufacturers are left wondering how to react to the lower demand for Chinese produced goods.
Growing a business in a market that is being disrupted by external factors is never going to be simple. But it is possible. Start by putting systems in place that will help your business to be 1) more alert to external factors and 2) able to react to these factors where necessary.
Make the most of the latest analytic technologies to monitor external data faster. Use this information to establish patterns in customer and competitor behavior, trends or even in oil prices or economic changes. Armed with this information, it becomes possible to detect trends and, importantly, spot anomalies.
If there’s a marked change in consumer or competitor behavior, your business needs to be able to react. Integrate your enterprise resource planning (ERP) system with business processes up and down your supply chain. This will give you the agility and flexibility to change course and action mid-plan, implement new designs that meet consumer demands or switch your focus to new emerging markets instead of old, failing ones.
With the latest ERP technology at your fingertips, combined with an agile attitude, it is possible for businesses to constantly adapt to new market conditions. You might not be able to predict the future but with these processes in place, you can certainly react quickly when the time comes.
Posted by Celia Fleischaker, SVP, Global Marketing at Epicor
1 Grow Your Manufacturing Operations by Selecting Easy-to-Use ERP, Aberdeen Group, November 2015