Post by Wiise
There’s a lot of hype around the future of manufacturing, at the moment. Terms like ‘digital transformation’ and ‘Industry 4.0’ are becoming increasingly popular, but often mislead businesses on how to stay relevant.
Manufacturing has experienced an almost constant state of turbulence for more than a decade and keeping up to date with today’s customer needs requires completely different processes (and technology) than in the past.
But what should manufacturers prioritise? Which technologies will help them to achieve these goals? And how can they avoid over-investing in expensive technologies that won’t bring real Return On Investment (ROI)?
These questions will be answered in the ‘Building Resilience through Connected Data’ Expert Arena session hosted by Chris Mackenzie, Head of Presales at Wiise Australia – a leading ERP software solutions provider – and Toni Jones of KPMG Australia on Day 1 (Wednesday 20 September) of the Modern Manufacturing Expo.
Wiise is a proud Silver Sponsor of the 2023 Modern Manufacturing Expo and they will be sharing real use cases of how Wiise is enabling growing manufacturers to better understand their business, make informed decisions and regain control over production processes during their 1.30pm Expert Arena session and at Stand M30 over the two days of the Expo. Both the Expo and Expert Arena are free to attend and will be held from 20-21 September at the Sydney Showground in Sydney Olympic Park.
The state of Australian manufacturing
The advanced use of AI, automation and smart factories, presents manufacturers with exciting opportunities for improved efficiency – but the reality is that these technologies present a huge upfront investment, unaffordable for most smaller and mid-sized organisations. While the time of Industry 4.0 brings significant advantages, it is also a time when running a profitable manufacturing business is increasingly difficult.
In recent years, the industry has faced a series of significant challenges, including:
- Shrinking profit margins. Everything is quickly becoming more expensive. Global shipping costs have blown out almost ten-fold in the past year alone, and raw materials, packaging and construction items are scarce.
- Increased regulations. Manufacturers are under the spotlight more than ever before, facing intense scrutiny on issues that range from emissions, tax and payroll transparency to diversity and inclusion.
- Demand variability. Seasonality has always been a challenge in managing supply, but today’s customers are becoming ‘paradoxical’ in their buying choices, creating immense challenges for forecasting demand and production levels.
- Access to skills. Most industries are currently battling a skills crisis, but in manufacturing, where Industry 4.0 has led to an influx of sophisticated technology, the sector is struggling to find staff with the skills to capitalise on these investments.
- Outdated technology. Holding onto legacy technology for too long has become an Achilles heel for many manufacturers. The result? Lack of integrations between systems, inadequate data frameworks and slow processes – all of which directly impact growth and resilience.
The journey to Industry 4.0
For most growing manufacturers, the priority needs to be building resilience into business processes and implementing modern systems that will enable the business to grow and scale. It’s imperative to ensure that a business is running smoothly in its current state, before attempting to invest in expensive high-tech solutions or complex machinery.
Missing deliveries, running out of the right components to complete customer orders, or being unable to forecast just how many orders your teams can take on in the first place are all signs that a business may have outgrown its old software and is ready to advance to a Cloud Enterprise Resource Planning system, or ERP for short.
The solution to manufacturing’s biggest challenges
A modern, cloud-based ERP gathers transactional information from every corner of the business, presenting it where and when you need it – in a format that enables you to understand it and make better decisions with it.
While moving to a new ERP is a major undertaking for any business, it has the potential to solve most of a manufacturing business’s biggest challenges. In particular, an ERP can deliver:
- Data-driven decision-making, through AI-powered predictions and business insights.
- Increased efficiency across all operations and processes, through AI and automation.
- Flexible working, with cloud-based solutions that can be accessed anytime, anywhere, via any device.
- Scalable operations, with the ability to handle more customer transactions and complex order tracking.
The business benefits of a successful ERP integration are illustrated in the following case study from Wiise client SGESCO-MAX:
In 2020, Scott McPherson joined SGESCO-MAX, a Queensland-based vehicle safety and monitoring solutions company, founded in 1962 by his father.
He identified many opportunities to grow the company, from including the customer installation of its safety products to manufacturing the products in-house. However, it soon became clear that none of this would be possible without a serious overhaul of its business software.
Scott’s father had invested in a cutting-edge Wang computer system in the mid-1980’s – but, almost 40 years on, the ‘green screen’ system was officially holding the business back.
“The system just wasn’t built to handle manufacturing,” shared Scott “We couldn’t manage assembly orders and had no data to help us plan for capacity – to tell us how many jobs we could handle or how much money we could make.” Implementing Wiise’s ERP allowed SGESCO-MAX to realise the following benefits:
- Significant time savings. The ERP’s faster processes saved staff across the business up to 2,500 hours a year.
- Real-time capacity planning. Instant, detailed reporting enabled SGESCO-MAX’s utilisation, forecasting and profitability on a per-job basis.
- Key manufacturing functionality. These functionalities included managing the company’s Bill of Materials, assemblies and sub-assemblies.
- Native integrations. This included a Shopify connector, allowing Scott to launch a new online store, as well as Microsoft integrations which linked data directly from Dynamics CRM and Power BI to Wiise reporting tools.
“An ERP investment has been absolutely critical to the survival and scalability of our business, bringing tangible benefits, faster than expected,” comments Scott.
What to look for in a manufacturing ERP
When it comes to selecting an ERP, Wiise CEO, Charlie Wood, advises focusing on the needs and challenges specific of the manufacturing sector. “Manufacturing has its own unique requirements – from inventory control to capacity planning. Industry-specific functionality should be a priority when researching which ERP system is best for your business,” says Charlie.
Key manufacturing capabilities to look for in an ERP solution include:
- The ability to see total manufacturing costs. Dimensional reporting enables manufacturers to break down materials, machine time, labour and landed costs, to see their true profit margins. Some ERPs, like Wiise, include built-in functionality for landed costing, to help manufacturers visualise the true cost of raw materials and understand the cost of production accurately.
- Version management control. An ERP can record changes and test new designs under development, enabling manufacturers to track and manage production more accurately.
- Capacity planning. Manufacturers can see detailed information on resource and component availability, manage teams and utilisation with production calendars.
- Multi-level bills of materials. The ERP should have the ability to define material design and cut down on time and labour for manufacturing teams.
- Predict supply and demand. With AI-powered insights and sales, production, purchasing, forecasting and operations fully integrated, an ERP allows manufacturers to see and manage end-to-end processes.
“A lot has changed – and, with tighter regulations and increased costs on the horizon, now is a great time for Australian manufacturers to build resilience into their businesses and gain a competitive edge,” concludes Charlie.