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Industry Overview

Introduction

Midsize Manufacturers and The Challenges of Growth
Manufacturing is an industry with a very wide spectrum: make to order vs. make to stock, discreet vs. process. Their sizes are also diverse. But research shown that in many countries midsize manufacturing are an important engine of economic growth.

These midsize manufacturers are in harsh competition but they are more agile to change and faster in adopting new approaches. They are also learning vastly and eagerly to explore and exploit technology and manufacturing management information in order to make sound judgments and decisions, to win competition.

This article will describe typical challenges facing by manufacturer in general and how business management tool like SAP supports these companies, including you, to keep growing and stronger.

Challenges

Companies are nothing if not growth oriented. In pursuing this big mind objective they are facing some serious challenges.

  • Downward pressure on prices
    Downward pressure on prices is the most serious impediment to companies’ growth. The pressure from prices comes both from the demand and supply sides.
    • Demand 
      Market saturation as the result of growing numbers of competitors creating price war and low margin.
    • Supply 
      The growing numbers of competitors also soaking up demands of energy and raw materials. This situation makes the energy, raw materials’ and resources price moving up tremendously. Not only that, they also has to compete in the scarcity of these resources and supplies.
      No wonder, then, that the majority consider reducing costs and improving operating efficiency as a critical component of growth strategy.
  • Right product in the right time and in the right place for customer
    Customers today are the focus of manufactures. Market demand for product quality, availability of where and when is getting higher. Customers insist for an instant answer from manufacturers. Therefore a robust business management application is in the spotlight to answer customers questions and needs anytime and anywhere.
  • Supply chain management and stock control
    This challenge comprises of:
    • How to ensure the availability of stock to continuously supply customer changing needs in a finger-tip. Customer prefers to keep their inventory low, therefore their requirementsare prone to constant changes
    • Controlling working capital by avoiding death and slow moving stock, shop floor control and better planning
  • Profitability analysis
    This is a necessary for better pricing decision, marketing decision, purchasing decision as well as operation decision.There are still significant numbers of midsize to low manufacturers do not have a discipline and tool to analyze their consumptions and therefore they do not have a comprehensive knowledge about costing and profitability.
    This situation prevent them to have a comprehensive analysis about their product and what demand and supply levers or initiatives they have to push to improve profitability.
  • Geographical Expansion
    Both organic and non-organic growth is a mandatory for growing bigger.
  • Big Customers
    Big customers are creating high risk for midsize manufacturing, as they will exert their power, among other ways, by controlling access to channels of distribution, exerting their strong buying power leading to lower prices, dictating terms of quality and delivery to at least some extent.
  • Big Vendors
    A similar situation also happens in the supplying side, where merger and acquisitions transform midsize vendors to large companies.
  • The pressure for compliance
    The pressure for compliance at all areas, from operation to financials, is also getting tougher
  • IT Infrastructure
    Growth can also strain a growing company’s IT infrastructure. Many executives feel that their current IT systems do not meet the requirements of scalability, and most of them are making a serious plan to replace obsolescent equipment and software.
    They realize that IT is no panacea. Yet, if managed and used skillfully, it can help mitigate the erosion of speed, flexibility, customer intimacy and other attributes that they used to their advantage as growing, leaner firms.

Key Solutions

SAP understands those challenges and traditionally SAP is considered as the most solid manufacture system management software currently available in the market. It has solid integration from front to the financial analysis, meaning in all areas of manufacturing business: sales, purchasing, inventory management and production cost analysis. It also provides profit center cost analysis for you to analyse costing in any segmentation that you can think of.

But in the first place, there are some key rules we need to make sure for making SAP and IT in general as your key driver to maintain the agility and profitability.

Business Objectives Comes First

Business Objectives Comes First

We should be able to articulate the business objectives and let SAP translates it to help you getting the right measurements and information.

Integrated Business Process

Integrated Business Process

SAP helps companies to change the way of business from silo (Departmental) to integrated where information could be accessed real time and online, decisions could be taken faster and they can response the stake holder requirements in a click.

Customer Relationship

Customer Relationship

As the customer base expands with business growth, some loss of intimacy with individual clients is inevitable. But data analytics helps to develop better insights into customer preferences and behaviour, and customer relationship management (CRM) systems to improve responsiveness.

Supplier and Partner Interaction

Supplier and Partner Interaction

Midsize firms will put effort for having a system to work to improve information interchange with suppliers as well as channel partners. This will entail supply chain management (SCM) and supplier relationship management (SRM) solutions tailored to their size and unique needs. The ultimate objective is to reduce high stack of manual works and to improve transaction speed.

Operations Management

Operations Management

Many midsize firms have bought into the potential of enterprise planning systems such as SAP to accelerate information flow throughout the company, thus helping to boost operational speed and improve co-ordination across departments.

Innovation

Innovation

There are many has been spoken and make clear that IT will be critical in helping their firms innovation as they grow. They will use technology, for example, to improve product design and lifecycle management and thus reduce cycle time. But IT has the potential to impact on innovation in indirect ways as well, in particular from better information flow with customers, suppliers and partners as well as other enterprise departments.
 

Closure

Knowing the critical role of IT and business system in manufacturing industries, Soltius has prepared massive capabilities in terms of expertise and templates to help various manufacturing industries run their business. The manufacturing solution encompasses general manufacturing, food, chemicals, pharmaceutical, consumer products, mills, steel, farm and poultry, and many others

Industry Highlights

Our 15+ year experience provides priceless experience working with various industries. This collection of knowledge, we return it to our existing and our future customers as a solid and powerful industry solution.
Our industry solution, delivered by our experienced consultants will help our customers to quickly address their business needs. It is a constellation of knowledge, preconfigured solution and the use of a state of the art technology solution.