How manufacturers and distributors can gain competitive advantage with ERP

While many conspiracy theorists argue for the existence of a flat Earth, one thing is for certain – the world is definitely getting smaller. The pandemic proved how interdependent we all are, and placed more value on communication, interconnected processes and supplier visibility. As a result, an interesting trend started to emerge. Manufacturing plants are no longer simply competing against manufacturing plants. Now entire supply chains compete against entire supply chains. It’s now about a network of businesses with upstream and downstream linkages.

Over the last year, those who are more robust remained resilient, while those who had not previously considered an alternative supply chain were left behind. The success of the companies that already had a digital initiative in place was remarkable when compared to those that did not. It has become clear that the better the flow of data and information, the better the flow of goods.

While it has also become clear that improved technology is required to compete on a larger scale, for many manufacturers and distributors, the prospect of digital transformation is still very daunting. It is considered costly, time consuming and each organization’s digital journey needs to be unique. The key to remember however, is that digital transformation needn’t be an all or nothing investment. The starting point will always be to build a digital foundation.

Building a digital foundation

The term ‘digitization’ refers to the process of making all information digital.  Many factories still rely on analogue equipment, which needs to be changed. Through digitization, data can be collected and analyzed to give business insights. Digitization also ensures that these analogue parameters are now being measured on the machine and are available in digital format. It is through these insights, that manufacturers and distributors are able to visualize all of the processes in the supply chain, and also make necessary changes to business models and key processes.

The next step is digitalization so that these parameters can be processed on the platform and be sent to specific functions as usable data.  Because supply chains now compete with supply chains, the more business insights you have, the better you are able to manage your organization.

Building your technology base from the foundation up

At a basic level, the rollout of basic Shop Floor Data Collection solution is regarded as a good starting point to collate data. Most integrated SFDC capabilities require an ERP, the SFDC software, the appropriate adapters, and software drivers to get all the information to where it needs to go and assist the business with real time decisions.  As the data collection and monitoring tools of Industry 4.0 become more common in the factory and across the supply chain, customers will ultimately have more visibility into production status and tracking of their deliveries.

With your data in hand, the next step is the analysis and manipulation of data to produce meaningful insights into the process. This requires a platform that can integrate both internal and external data (like the Internet of Things) and deliver an end-to-end snapshot of the business.

Enterprise Resource Planning (ERP) is a platform that is able to collect all of the data and using some form of analytics, interrogate and develop management information for the organisation.  It is important to note that the platform you select must have the capacity and ability to capture and scale up the data collection and analysis which will allow the business to keep up-to-date with the issues in the business

It is clear, that without a digital strategy in place, businesses can no longer remain competitive in the global village.

The best planned strategies and initiatives often fail for the wrong reasons – our advice, start simple, start small and focus on your core business objectives for your initiative  get the business optimized first, and the ability to compete with other supply chains will follow.

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