The past decade has seen huge changes in the way that much of the business world operates. Together with more home-working, flexible hours and rapid technological advancement has come smaller office spaces and a greater proportion of work done while on the move. This has brought particular challenges to the manufacturing sector, says Statii Director Mark Thornhill. Here Mark gives his advice on how to recognise today’s unique pitfalls, and how to combat them with the help of solutions such as MRP software.
The times they are a changin’ – and Sir Bob Dylan’s immortal words are as true now as ever they were, particularly for manufacturers. Over the past ten years there have been enormous global changes to the way we operate in the business world; as we begin to thrive on the ability to communicate easily at the touch of a button, and technological whizz-kids can invent ever-more smaller and efficient ways of doing things, so must manufacturers keep up with the tide of change to avoid being washed beneath its surface.
Over the past 30 years I have been involved in many different areas of British manufacturing, and now run two companies which operate in different sectors of the business: one, Synergetix, specialising in engineering sourcing, and the other, Statii, providing cost-effective software solutions for SMEs. As a passionate advocate of British manufacturing in whatever form it takes, from cutting edge technology to hand-carved oak furniture, I have seen first-hand that the most important quality any manufacturer must have in order to succeed is the ability to adapt.
Despite the global business environment and the influx of technical advances to help aid the growth and day to day processes of businesses. Many businesses, especially in the manufacturing industry have not adapted modern technologies to help. The creation of the internet made it easier than ever to find both customers and suppliers and allow purchasing instantly, not to mention to dramatic changes in logistics and automated delivery systems.
Which begs the questions, if manufactures are sourcing customers and suppliers using web based application. Why are they still quoting using original methods such as written and spreadsheets? Raising the question, why so much resistance to adapting systems such as material (MRP) and enterprise (ERP) resource planning solutions?
One of the biggest changes in the manufacturing sector in recent times is the fact that companies no longer want, or are no longer able, to carry stock. This has had a big knock-on effect to manufacturing providers when it comes to ordering timescales. Rather than having a long period of time to work through their order books, reaction time is now key. But with this added time pressure comes financial bonuses: countries like China and Taiwan – despite their status as the great making nations of the world – are not able to compete on reaction times in the western market, so this is a key point of difference of which British manufacturers should be making full advantage.
Resulting in yet another daily task for a manufacturing owners to contend with. With techniques being adopted such as JIT (just in time) and lean manufacturing processes, the need to manage stock is crucial. Paper filing however does not cut it these days and the loss of time using these methods are costly. Once again moving manufactures towards solutions that help aid and manage processes and stock control MRP (material resource planning). Allowing the ability to track all stock in and out of the shop, with automated responses so your never caught short!
It’s all about profit
Because of the more rapid nature of business transactions as the marketplace continues to move, having the financials in place has become far more important for manufacturing companies. Firms simply cannot afford to be unable to access funds when speed is of the essence in sourcing materials from suppliers and paying bills on time. It’s vital that manufacturers should not fall into the trap that many other businesses have made when they focus on turnover rather than profit. It may be very exciting for a new start-up to receive an order from an impressive client, but if that order is going to cost more to make than it will make back in profit, it would be better to take smaller, less expensive orders which will have a more positive effect on that all-important bottom line. It is all about profit – if there is no real money to be made, don’t do the job.
All businesses regardless of industry or sector rely on data and reports, displaying the functionality of a business. Identifying the core areas that create profit and more importantly loose profit, without this insight the business may never develop or grow as the owner may wish.
There are many ways to visualise profit in a business, manufacturing however is unique in the way it functions. In a fast passed business environment when a situation on a job can change on a daily business, so can the profit. Which is why it has become crucial for engineers and manufacturers to use solutions that you can either find or it gives this information. MRP solutions often offer a real-time reporting system allows owners and managers to view the job costings on a live basis as the job develops.
Keep an eye on the tech
Remaining competitive can often mean keeping an eye out for the very latest technology in whatever industries are most relevant to your business. It is of vital importance that you are not left behind in this area, whether it’s the latest tech which will enable you to create elements of your product faster and quicker, or a new, cheaper software solution which will save you huge amounts of time in your internal business processes. Here at Statii, for example, we have seen our clients increase by more than 450 per cent over the past year alone – as companies in the UK and abroad like our cost-effective software solutions which have been proven to help increase SMEs’ profitability.
Allied to the necessity of keeping your eye on the technology market is the willingness to adapt your own business processes in order to keep abreast of changes. Getting consistency in your own processes is key to success.
Adapt to survive, react to succeed – would be my mantra. Here in Great Britain we have a proud tradition in using our hands and making things, let’s see it flourish and thrive as we move into the future. It is clear that the most efficient and successful manufacturing economies are those that are most efficient and therefore offer the highest quality and above all, most reliable. Countries such as Japan and Germany spring to mind with high quality production and innovative thinking. Such as lean manufacturing and just in time (JIT manufacturing) purchasing, all processes that are managed with modern technology.
Resistance to change?
No doubt the manufacturing industry has undergone a variety of changes, especially in the last decade. Core factors driving this change? Technology. Technology and the advancement of technology have changed every industry; the manufacturing industry however has not only been impacted heavily by technological change. But often is the guiltiest to resistance to change.
Manufactures no longer have to open a directory book and phone customers and suppliers, they adopted spreadsheets to hold information digitally. Now there are complete customer relationship management systems, logging all contact increasing traceability and transparency through the entire company. Same for production control, once written on a board evolving to spreadsheets and quick books. Now there is complete MRP systems, allowing businesses to input data, automatically creating schedules, allowing tight control over a business performance.
Technology make life easier, why fight it?
Old habits die hard –
Generation cross over is a core barrier to implementing new technology. Simply when many manufacturers learnt there craft the technology available now, simply didn’t exist. Learning new skills and new processes can be timely and stressful, outcomes that business owners simply don’t want when running a busy work shop.
How much? –
Money is a crucial to any business and the allocation of this resource is crucial. Many manufacturers always need something, this could be new machinery or new personnel, but its apparent that new technologies such as software’s often make its way way down on the list of priorities. Misconceived ideas however, as software’s can not only have the impact of multiple employees but create more time and then more money for future expansion.
Time is money –
Implementing technology and creating new processes for a business can be a timely process. Time is often then most important resource, when running a business there simply isn’t enough time in the working day to complete every task. A software however is an investment both in money and time, although there is the inevitable up front cost, so is a return.