Risky business: operating in a tough environment
The plight of many manufacturing companies has been well reported in recent years. Gone are the heady days of the 1960s when manufacturing was contributing over 25% of Australia’s GDP, with that figure now at below 10%. Some of the country’s largest manufacturers, including the three largest car companies, have moved operations offshore, with many claiming the cost of doing business in Australia is too high.
What this environment has caused is a strong focus from businesses on optimising operational costs, with a decline in investment in capital expenditure. More manufacturers are trying to do more with less and make better use of their current resources - a strategy which is easier said than done. However, companies who can successfully manage their OPEX create a strong competitive advantage over rivals.
The key to achieving this operational excellence is visibility to company information. In order to make timely and informed decisions, manufacturers must have a holistic view of the entire organisation at their fingertips and break down any information silos created by a rigid departmental structure. Decision-makers must be able to analyse data and be able to confidently identify areas of underperformance, production or supply chain bottlenecks, or low-selling product lines. However, there’s more to business intelligence than performance statistics used by upper management.
Today, information needs to be presented in a manner that helps people at every operational level of the organisation make the best possible decisions. Users should have one place to go for information that is gathered from internal and external sources, and that is presented to them in a context that’s relevant to what they are currently working on.
This is done by enabling the flow of information from department to department, or person to person, using intelligent workflows and alerts that are based on a set of predefined business conditions. It’s about being notified to changes in customer orders, delays in raw material delivery or changes to the scheduled completion of production. It’s about creating a holistic decision-making environment that increases your company’s agility and automates processes to improve your company’s productivity.
To achieve this, however, the right company software systems become vital. The businesses that are achieving the most success are those looking beyond the traditional ERP systems. IDC Manufacturing Insights identified four major forces enabling change in business IT - cloud computing, social business, mobility and big data analytics. Together, these forces can revolutionise businesses, disrupt old business models and create new leaders. With all parts of the software system working together like clockwork, improvements in efficiencies inevitably follow.
More and more businesses are looking to these next-generation ERP systems to help achieve the desired operational outcomes. While the manufacturing industry may not return to the booming days of the 1960s anytime soon, manufacturers can certainly look to software solutions as a way to offset the costs of operating in a tough environment.
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