What tools are manufacturers using to communicate with suppliers?

For 90% of small and medium-sized UK manufacturers, paper, email, faxes and phone are the primary method of communication.

Given that a fax is really just a faster letter without added intelligence, and an email, while offering some information benefits, is usually just used as an express letter, it could be argued that for the majority of organisations, their preferred methods of communication and collaboration have yet to take advantage of the opportunities to add intelligent insight which are available from modern, integrated systems.

That is the finding of a recent study – The route to smarter manfuacturing for SMES – conducted by The Manufacturer and Oracle | Netsuite which explored the views of UK manufacturing SME executives and decision-makers towards intelligence and connectivity.

Despite the widespread availability of cheap powerful computers and fast communication networks, the growth of cloud and a choice of sophisticated ERP systems, there is a clear reluctance on the part of SMEs to fully embrace the considerable power of smart, data-driven communication and collaboration systems.

The failure to join the dots and use more of the tools available in modern ERP systems is all the more surprising in a world where consumers are increasingly used to getting choice, value and rapid gratification.

It’s likely that the very people who manage, plan and direct a manufacturing SME’s dealings with customers and suppliers go home after work using train tickets bought online, order books, music and groceries online, stream their entertainment digitally and use a whole host of other systems that scream engagement with powerful, customer-friendly, repeat-sales-generating business systems.

Nevertheless, with only 18% of SMEs collaborating with suppliers using an internally hosted portal, and a paltry 3% using a collaborative hub, clearly a lot of small companies have a long way to go in taking advantage of modern communication and collaboration systems.

At the very least, one might hope that an enterprise involved in manufacturing, which by its very nature is a collaborative undertaking, would be open to the kind of joined-up working and thinking that ERP software can offer.

The advantages of using software that can intelligently embrace all of an organisation’s activities, from customer contact details and tracking supplies to the status of products on the shop floor, project planning and quality control should be self-evident.

Evidence from across the sector clearly demonstrates that while there are companies that manage to succeed and do well without some of these facilities, it’s not much of a stretch to imagine that they could perform even better if they took advantage of the opportunities offered by powerful modern ERP software systems.

Processes could be streamlined, supplies managed better, customers offered greater choice and a whole host of other business advantages, which individually may offer only an incremental benefit, but which taken together could make a deep impression on productivity and customer satisfaction and retention – and therefore long-term profitability.

The effect on customer relations is important – product cost is just one element affecting purchasing decisions.

If a customer feels that a company genuinely collaborates in product delivery, offers flexibility and choice, and is responsive to questions and requests for customer support then these will inform decisions about whether or not to purchase a company’s products and in particular consider repeat business.