By: Hesham El Komy, Senior Director, International Channels, Epicor Software
According to a recent article in Emirates Business, manufacturing is already the second largest contributor to the UAE’s economy. Given the government’s focus on continuing to diversify the economy in line with the Vision 2021 Agenda, manufacturing is on a strong growth trajectory and is expected to contribute close to 25% of the GDP by 2025.
Risks to manufacturing growth
While most regional manufacturers consider this growth to be positive, there’s no escaping the inevitable challenges that come with it- hence the familiar term “growing pains.” Business growth can indeed be difficult and overwhelming, especially when you’re not prepared or have a plan in place to manage it. Of course, failing to plan is planning to fail. As a manufacturer, you face serious risks to your business when you don’t plan for growth or have the necessary tools to plan properly.
A recent survey commissioned by Epicor and conducted by MORAR Consulting revealed five key risks that manufacturers believe threaten their growth ambitions. And a recent Aberdeen paper confirms that these issues are exacerbated if growth is largely unplanned. The risks include:
1) Excessive pressure on operations, damaging quality and customer satisfaction - If your operations aren’t geared up for growth, Overall Equipment Effectiveness (OEE)and throughput may fall, scrap may increase, and manual data gathering processes may hamper productivity. Service could slow down, causing dissatisfied customers to turn to your competition.
2) Lack the skillset and technology to deliver effectively, and damage our brand reputation - If you can’t get the right information to the right people at the right time, or accurately track statuses of raw materials and orders, it can take a serious toll—by reducing operational capacity and efficiency, and damaging customer service.
3) Management – Sometimes senior executives in the business may not be fully prepared for the challenges of managing a larger, more diverse business. If senior management isn’t able to get an overall view of the business and make good decisions quickly, they may struggle. A lack of real-time, relevant information will force executives to rely on gut-feel for decisions, leading to mistakes.
4) Negative consequences of unplanned business growth - Manufacturers who don’t plan for growth will find that problems occur more often and take longer to resolve. Without accurate forecasts you won’t be able to prepare for growth. If you can’t respond quickly, you might end up losing opportunities to competitors.
5) Pressure on Staff - If you’re not prepared to help employees manage their growing workloads, the pressure they’re under could start to show. They may spend more time on manual processes and less time on value-added tasks. Difficult-to-use systems will increase their frustration, reduce morale and may ultimately prompt key people to leave the organization.
Leveraging ERP to fuel growth
While the concerns of planned (or worse still, unplanned) growth are significant, successfully navigating the challenges of growth in order to reap its rewards is entirely possible when you’re outfitted with the right enterprise resource planning solution (ERP). An agile, scalable, easy-to-use ERP solution can help you grow your business faster and more profitably, by enabling you to:
1) Eliminate inefficiency. ERP solutions can help you optimize internal efficiency, increase the speed and standard of execution, and make and deliver quality products on time and at the right price. It helps connect everyone in real time, so your operations can run faster and less expensively while maintaining high product quality. In this way you can build a more productive manufacturing operation, as well as cut costs and improve margins.
2) Improve decision-making. It’s clear that the key to maximizing decision-making is having full visibility of the business, as enabled by on-demand access to the right information at the right time. An ERP that delivers accurate and timely information, gives you the insight needed to drive operational efficiency and effectiveness. More accurate insight means better decisions more frequently—and better decisions mean faster growth.
3) Increase agility and responsiveness. The right kind of ERP can provide accurate information and insights in real-time, and therefore enable greater responsiveness to opportunities as they arise. Driven by industry best practices, it must adapt to easily accommodate your expanding user base, product lines, and geographic range. It must also provide great choice and flexibility—whether you choose to deploy on premises, hosted, or in the cloud, with access from your PC, tablet, or mobile device.
4) Deliver a better customer experience. An ERP can help you deliver the right high-quality product to the right customer at the right time, every time. It must enable you to quickly adjust to meet the demands of your customers, whether it’s to add new products to your offering, or change schedules for existing orders. And it empowers employees with tools and information to respond to customers efficiently and deliver a superior customer experience.
It is clear that some manufacturers in the region are already benefitting from ERP solutions. Saudi Mechanical Industries, a leading manufacturer of fluid flow and control equipment, for example, has leveraged ERP to streamline processes and increase efficiency and productivity across all functional areas including manufacturing, sales and finance. This has not only translated in to significant reduction in cost and increased profitability but has also allowed SMI to offer its customers a much higher level of customer service. The technology’s versatility enables complex processes, giving manufacturers access to information in real time and allowing them to plan accordingly, make better business decisions, and enhance their competitive advantage in an increasingly dynamic market.
With the 2021 deadline now just five years away, the investments made today are already laying the critical foundation for success. And if the region is to establish itself as an international manufacturing hub, more manufacturers need to make better use of the latest technology available to them, to effectively increase production and efficiency.
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