Today’s manufacturers are focused on building revenue by driving product innovation and expanding into emerging markets. They understand that optimizing their production processes is key to realizing this goal. Steps will include upgrading information systems and fine tuning enterprise resource planning (ERP) software to stay ahead of the competitive game.
In a recent survey, almost 90 percent of manufacturing executives rated the need to address growing complexity at three or higher on a five-point scale. In order to optimize their complex operations, they plan to direct their efforts towards:
Revenue Opportunities
In light of the recovering global economy, manufacturers most monitor and react to vast external issues as well as manage their own internal productivity. Challenges on the worldwide front line include:
- Growing competition from emerging markets.
- Increasingly complex supply chains.
- Larger, more detailed compliance requirements.
- Volatile raw material costs.
Manufacturers are working to align their business goals with the continued necessity to grow revenues while keeping costs under control. When asked to rate their top priorities over the next 18 months, 83 percent cited revenue growth and 73 percent cited cost containment.
The leading tactic for growing revenue will be investment in product innovation, according to 71 percent of survey respondents. This was followed by:
- Prioritizing new product launches, as reported by 42 percent of executives.
- Tightening operations, production and manufacturing, at 35 percent.
Manufacturers have noted they plan to explore various options for extending revenue streams in the months ahead. These include:
- Adding installation, repair and maintenance services.
- Leveraging information systems to identify new niche markets and products.
- Implementing design-to-order and engineer-to-order services.
Fine Tuning Operations
As manufacturers contend with the growing complexity of supply chains and distribution channels, it becomes more and more critical that they tailor their reporting systems and metrics to spot potential problems at the earliest possible stage.
- Seventy-four percent of survey respondents listed production processes as their number one area of focus on in order to improve operations.
- Forty-two percent said they would explore ways to shorten their supply chains, though only 28 percent said they would seek to decrease the number of suppliers they work with.
Making ERPs Company-Wide
While ERPs continue to have the most significant impact on finance and accounting, as noted by 59 percent of manufacturers, one-third agreed that their ERP is vital across all business areas.
- ERP software has undergone significant transformation in the past two decades. Initially, it was used primarily for financial applications, order management and purchasing. Today, systems are designed for much broader use.
- Fifteen percent of manufacturing executives noted that there were multiple ERP systems in use at their businesses. The ability to integrate them is critical to provide information flow and feed critical advanced analytic capabilities.
The ERP system of 2014 must empower a business to deal with change, which may come in the form of a market preference shift, a supply chain interruption, a regulatory revision, or new competition that undercuts pricing. An ERP that evolves with your business and enables it to manage the supply chain of the future is a critical asset.
The specialized recruiting and workforce management team at Premium Staffing provide the resources and expertise you need to build your staff – and company – for success. Contact us today.