The year is 2019. According to Blade Runner, manufacturers should be making flying cars and space-mining equipment with help from an android workforce. As we all know, the reality is a little different — and nowhere is this more true than in the back office of manufacturing companies. Patrick Foot reports.
UK manufacturers may be deploying a multitude of cutting-edge digital manufacturing tools in their production processes, but thousands are still distinctly old-school in how they manage production, purchasing, inventory and sales.
Excel hasn’t changed significantly in over 20 years. MRP systems are expensive, outmoded and unagile, and yet both are familiar sights in manufacturing back offices.
In the past few years new technology has helped fuel a product renaissance in the UK by making it easier for independent manufacturers to challenge market incumbents with alternative, quality offerings.
But to properly take advantage of consumers’ appetite for good, quality products manufacturers need to focus on their software as well as hardware.
And thanks to the cloud, the opportunity for manufacturers to revolutionise their entire business — from the production line through to the back office — has never been more accessible.
This article first appeared in the October issue of The Manufacturer magazine. Click here to subscribe
The value of insight for productivity and innovation
Numerous technological innovations have promised to help UK manufacturers grow productivity in the last ten years — but Britain’s problems have proved stubborn.
In the last instalment of our three-part series, we examine why.
Including whether data can close the productivity gap, profiling a company that is using insights well and a closer look at the four-factor method outlined in part two.
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Messy sheets
Spreadsheets can do lots of things, but they aren’t up to the task of managing complex production processes. Sooner or later, a manufacturer will run into serious problems. Here are a few we see crop up time and time again.
Lack of visibility
Businesses that rely on spreadsheets for inventory management can’t accurately see:
- How much stock they have at any time
- Where that stock is
- How much they make on each sale
Cloud inventory management, on the other hand, puts accurate stock information in a manufacturer’s hands at any time, from any location. No more selling stock that isn’t there or making decisions based on imprecise information.
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Productivity problems
Smaller, independent UK manufacturers today have to compete with brands that can produce products cheaply and get them in customers’ hands faster than ever.
With Excel, it’s impossible for them to maintain an edge over the long term.
Why? Because manufacturers running Excel have to manually raise every sales order themselves, wasting time and creating errors.
Because they don’t have the data to find new efficiencies. And because it stops them from optimising processes to increase competitiveness.
Disparate systems
Combining cloud accounting and cloud inventory management means manufacturers can eliminate the double data entry that’s central to managing spreadsheets, and reallocate the time to value-adding tasks.
With a cohesive suite of apps in place — which, for example, could consist of Xero or QuickBooks Online for accounting, Unleashed for inventory management and Shopify for eCommerce — manufacturers can make inventory admin a thing of the past.
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Outdated MRPs
MRP systems sit at the other end of the scale. They’re sophisticated and built specifically for the task of helping manufacturers manage processes.
But that doesn’t mean that they can integrate with accounting, CRM or sales solutions, give an accurate idea of stock levels and margins or help improve productivity.
Plus, MRPs are hugely expensive to purchase and maintain. They require a massive investment. Not just of capital, either — of time. Time to set up systems, keep them running, train new staff and overhaul processes and plans to conform to a rigid system.
Cloud inventory management offers a far more flexible way to achieve the same goal.
Setup and training take days not months; manufacturers only need to pay for the features and users they need and the system can be tweaked, or enhanced with additional apps, to suit each business’s specific requirements.
So, while there can be no doubt that the digital revolution is transforming manufacturing, to ignore the improvements that can be made to the back office and focus on new equipment would be a grave mistake.
Archaic technology doesn’t belong anywhere in a modern manufacturer’s business.
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