On March 8, SAP hosted a Manufacturing Innovation Forum to investigate the untapped potential for manufacturers in their ERP systems. Tom Moore reviews discussion at the event and discovers the opportunities available to optimise efficiency through streamlining ERP systems.
More than 22% of manufacturers are planning to invest in ERP; it has long been recognised for putting order into process and has become a backbone of business.
But on the way to ERP benefits and the streamlining of processes and functions, business flaws are often exposed and companies are forced to face up to their faults. For Keith Ross, company secretary at flight deck seat maker Ipeco, and a speaker at SAP’s Manufacturing Innovation Forum, however, this was a positive experience in the end. “In the past, people have been able to duck and dive, taking shortcuts to get things even more wrong and waste even more time. Now things get done first time because the processes are there.”
For SMEs like Ipeco, the drive to invest is “a demand driven by the customer. One of the prerequisites to work with OEMs is that suppliers integrate with their systems”. These were the words of John Antunes, director of SME and Channels at SAP who also commented: “You speed up your decision-making to maximise opportunities by having data readily at hand with fully integrated software. This means you can make a decision within 10 minutes instead of four hours. Interlinking applications, analytics, mobility and the cloud is what brings data to life so that customer expectations and time scales are managed.”
Technologies to watch
But what does customer focus mean it terms of technology investment priorities? According to Pierfrancesco Manenti, head of EMEA for market research firm IDC Manufacturing Insights, the next decade will be about operating in a more intelligent economy where IT investment will be led by the cloud, big data, social business, and mobile. And according to IDC’s surveys manufacturers agree. Ninety per cent of them say that this kind of technology will change the way they work.
Addressing forum attendees Mr Manenti explained, “We need to bring intelligence and become customercentric by embracing new technology. Firstly, we need to integrate people by providing them with the right information and advanced collaboration tools. Secondly, the factory must integrate into the network of global operations and focus on customer fulfilment. The factory used to be seen as separate, but with the uptake of just in time, the factory is now part of the supply chain.”
What this amounts to is a need to streamline software because data. This tends to be stored across too many platforms, according to forum speakers. Many firms are operating with single business applications for engineering, marketing and administration. These don’t talk to each other and this impacts on customer service.
For companies that export, challenging lead times, separating the customer from their orders are difficult to manage, especially if demand changes en route. For printer manufacturer Brother, which mainly manufacturers in the Far East however, standardising IT throughout the business has enabled the supply chain to be managed more efficiently. Order fulfilment has increased and, by curtailing the ability of sales to inflate their figures, inventory has been reduced.
The SAP software rolled out across Brother also allowed comparisons to be made between its different factories and operations. It flagged up the cheaper cost of servicing goods in Germany over France, for instance, thanks to the German decision to send new products below a certain value to customers experiencing problems – rather than send an engineer which had a higher cost. This approach has now been replicated across Europe bringing huge savings.
Using ERP to drive business innovation, for efficiency and cost reduction will become a growing expectation on IT professionals and system users. To find out more about how ERP can become a force for innovation in your business, come along to TM’s ERP Connect event on May 3 and grow the discussion s stated at SAP’s forum. (See p68 for more on ERP Connect).