Enterprise resource planning systems, CRMs and other tech such as RFID, barcoding, customer and supplier portals, blockchain, IoT, and GPS tracking all support this goal.

Modern ERP systems are no longer just about transactional processes and standard business processes. They are now pivotal in meeting customer requirements, supporting automation, and integrating other essential technologies like AI, IoT, CRM and e-commerce.

Companies must stand out from the crowd with a superior customer experience to sustain profitable growth during these turbulent times; however, service alone will no longer suffice. Companies must contain cost and mitigate risk. ERP and related technologies are key to achieving these objectives.

During these turbulent times of supply chain disruptions, geopolitical risk, and stubborn inflation, companies must take bold action to mitigate risk, stabilize the supply chain, provide a customer service edge, and contain costs. As wars rage across the world, geopolitical risk has skyrocketed. If there is a disruption at one node in the end-to-end supply chain, the disruption can ripple throughout the entire chain. Executives realize that the risk is simply too high to count on the supply chain remaining stable without securing and gaining visibility to their full supply chain.

Similarly, as the world struggles with limited resources, high inflation and interest rates, there is an intense focus on cash flow and cost containment. Only those companies that automate, digitize, and utilize advanced technologies across their supply chains will be able to support customer requirements while maintaining and increasing profitability, productivity, and working capital. This will become even more critical as those companies that do not invest in their future will not be able to meet customers’ needs, leaving a vast opportunity for those ready to scale and meet customer requests.

Not enough to use your old ERP in new ways

Better utilizing an old ERP system will no longer suffice. To stand out from the crowd, you must go beyond these fundamentals and offer a differentiated or personalized customer experience.

For example, your ERP system must allow for progressive e-commerce capabilities that support not only B2C consumer expectations but also provides advantages for B2B customer ordering and status visibility with ease and effectiveness. Your ERP system should support customer personalization as well as product and service customization.

Similarly, a customer relationship management (CRM) system should be robust in tracking your pipeline, building relationships, and providing relevant insights and statistics of where to focus. Our most successful clients focus on analyzing CRM data, forecasting future customer needs, and utilizing these insights to build customer relationships.

The best clients combine CRM with a powerful business intelligence system to create predictive analytics and assess what if scenarios. The best companies connect directly with their customers’ data and provide proactive insights and differentiated value to their customers.

In addition to gaining sales, companies should utilize ERPs to take customer service to the next level with collaborative customer ordering programs and vendor managed inventory programs. By utilizing demand planning and sales forecasting including the use of AI and predictive analytics as well as replenishment planning and advanced planning functionality, clients can solidify their preferred partner status.

For example, a health care products manufacturer grew the business by outperforming their key customer’s resources in determining what to stock where. Not only did they increase their customer’s fill rate and shorten lead times, but they also reduced their customer’s inventory levels. The customer responded by expanding business and suggesting additional opportunities. In addition, the manufacturer reduced inventory levels and improved their production, warehousing, and transportation efficiencies. Profitability and cash flow increased.

Manufacturer technology that supports supply chain visibility

End-to-end supply chain visibility is essential to responding quickly to changing conditions and in providing Amazon-like status updates to your customers. Several technologies support this type of visibility, including RFID, barcoding, customer and supplier portals, blockchain, IoT, GPS tracking, and more. Smart companies are collaborating with supply chain partners to gain access to status information and to connect, plan, and optimize efficiencies across their supply chain.

For example, if you know the status of key materials, you can better plan production to minimize costs while meeting customer expectations. If you know the status of incoming goods, you can optimize truckloads and modes of transportation to mitigate costs while improving delivery performance.

The metaverse can bring together what customers ask for with what customers need. In essence it can accelerate your SIOP (Sales Inventory Operations Planning) process. In a metaverse collaborative room, any set of customers, consumers, and suppliers can meet virtually to review sales forecasts, projected production plans, and possible supplier/capacity limitations that could affect manufacturing volume. They also can visualize an immersive supply chain network map, see where inventory is, identify issues, and model possible solutions. These types of proactive solutions will upgrade your ability to secure your supply chain, enhance margins, and provide end-to-end visibility.

The ever-increasing importance of automation

In addition to automating repetitive tasks, ERP systems and related technologies can keep facilities running at night without people. Since most clients have consciously prioritized which customers to serve due to limited resources, taking advantage of lights out capabilities is quite appealing.

For example, an aerospace manufacturer had a bottleneck in a critical area of the shop that required high-skilled resources to function which created significant past due and unhappy customers. This client purchased a robot and invested in high-skilled talent to modify the robot to work for their needs and connect it to their systems. They were able to program the robot during the day and run lights out on second and third shift, quickly resurrecting their customer service and supporting future growth.

As companies expand and upgrade the use of ERP and related technologies, they can create unique value for customers and in their supply chain. Taking it a step further, to thrive during these turbulent and inflationary times, it is important to automate, digitize, reduce repetitive labor requirements, increase efficiencies, and standardize so that more can be achieved with fewer resources. The best companies engage their people and connect with customers and suppliers to upgrade the end-to-end customer experience.

Originally published on Smartindustry.com on November 17, 2023.

The post Leveraging ERP and related technologies for a diverse customer experience appeared first on LMA-Consulting Group, a supply chain consulting firm.

According to Polaris Market Research, the market size of artificial intelligence (AI) in manufacturing is predicted to grow more than 41% during the next decade. Although the latest Sikich Industry Pulse found that less than 20% manufacturers have started to implement AI, the ones that want to thrive in the next decade are pursuing AI strategies that make sense to support their business objectives. AI can help manufacturers target where to focus and automate mundane tasks.

There are many uses for AI in manufacturing. A classic example is predictive maintenance. Instead of preventative maintenance, target where to maintain with predictive maintenance to maximize your efforts. Collaborative robots (cobots) work alongside people and often can perform tasks such as those requiring heavy lifting. Digital twins are virtual models of physical objects or layouts, and they can receive information about the object through sensors to get information about maintenance needs etc. On the software side, manufacturers are using robotic process automation (RPA) to handle high-volume, repetitive tasks that can be automated. 

For example, in working with a water tank manufacturer, we wanted to upgrade the use of ERP and start using MRP (material requirements planning) recommendations for purchasing. Before turning MRP on, we had to perform a cleanup of data and add routing data steps in the system. The team was lean, and it was estimated to take a few months to prepare for go-live. The executive team did not want to wait to improve service and increase efficiencies, and so a technical expert on the team used RPA to write a code to automate the setups. We completed the preparation in three days instead of three months and started gaining results.

Another application for AI in manufacturing is a lights-out factory which runs with robots. Although full lights-out factories are rare, this application is gaining momentum across the globe especially as workforce participation rates remain low, manufacturers realize they need to gain control of their success and are reshoring, and margins remain tight with high material and labor costs. Robots can operate around-the-clock without lunches, breaks, and workers compensation claims.

For example, an industrial manufacturing client struggled to find the talent to run its manufacturing operations. They couldn’t keep up with demand, employees were frustrated, and customers were unhappy. They purchased a robot to perform production in a key bottleneck area of the facility; however, the robots couldn’t produce around-the-clock because there was nowhere to store finished product on second and third shift without material handlers. Thus, the engineering team developed an automated way for the product to be moved from the point-of-production. Past due deliveries plummeted as the system came online.

AI is also prevalent in supply chain applications that support manufacturing success. For example, sales forecasting and demand planning is supported with AI algorithms to better predict demand. Even in the most industrial of manufacturers, demand patterns have been difficult to predict, creating a need for AI to get in front of demand. AI is also used in inventory management and to prevent bottlenecks and predict what’s needed.

AI requires proactive design so that you can limit expense and minimize the high-skilled resources required to go live. Start with a rapid assessment of your business requirements, process and technical infrastructure and resources. Select a pilot to test your plans and results will follow.

Originally published in Brushware Magazine, January / February 2024.

The post Integrate AI in Manufacturing to Raise the Bar appeared first on LMA-Consulting Group, a supply chain consulting firm.

Lisa Anderson was quoted in a SelectHub article when she warned that, in the area of attracting and retaining workforce talent, competitors will always try to steal your best employees.

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Manufacturing Trends 2024: Maintaining A Competitive Edge

What are the most essential manufacturing trends of 2024? I hate to burst your bubble, but this industry doesn’t just focus on AI, IoT, data mining or advanced manufacturing software.

We’re talking about the big-picture patterns that are shaping the future of manufacturing as we speak. This guide will tell you how to retain labor, keep a carbon-neutral work environment, maintain a positive reputation and more.

Key Takeaways

• Some ideal technologies for manufacturing include IoT, IIoT, AI and data mining.
• When adopting smart factories, there should be a harmonious balance between machines and humans.
• Top manufacturing process types include repetitive, discrete, process, continuous, job shop, 3D printing and more.
• Ideal ways to attract and retain manufacturing employees are giving them satisfactory work environments, liveable pay and benefits, training opportunities. and more.
• Because of the digital twin market’s resourcefulness across the manufacturing and PLM sectors, this market could hit $155.84 billion in value by 2030.

Top Trends for 2024

1. Attracting and Retaining Workforce Talent

Lisa Anderson, founder and president of LMA Consulting Group Inc., warned that competitors always try to steal the best employees.

Pay alone will not suffice. In our experience, the most important priority to retaining top talent is company culture and leadership. People do not follow companies. They follow leaders. Clients with leaders who appreciate talent, offer training and advancement opportunities, and are willing to address poor performers and tough topics are respected and successful. On the other hand, clients with volatile leaders are losing talent at a quick pace.”

To read the full article, click here.

The post Manufacturing Trends: Maintaining A Competitive Edge – SelectHub appeared first on LMA-Consulting Group, a supply chain consulting firm.

As the labor market tightens with changing demographics, companies will need to leverage technology and digitize their supply chains.

The world has never experienced a labor shortage quite like the one we are experiencing. According to the Bureau of Labor Statistics, employment growth will average .3 over the next decade; however, labor participation will drop from 62.2% to 60.4%. In essence, we have entered a secular labor shortage. Similarly, according to the German Chamber of Commerce and Industry, half of German companies are struggling to fill vacancies due to labor shortages. Thus, the only companies that will thrive in the next decade will leverage technology and digitize the supply chain.

The use of technology and automation will be of paramount importance to not just supplement the labor force, but also to meet ever increasing customer requirements and provide visibility across the end-to-end supply chain. Companies must be faster, focused, and perform with lights-out manufacturing and logistics to succeed. Thus, a modern ERP system will be an assumption, not a differentiator. In addition, companies must pursue advanced technologies such as business intelligence and predictive analytics to forecast the future and determine where to focus, artificial intelligence, and IoT solutions to support items such as predictive maintenance, and digital twins to optimize process and product performance.

Pertinent Examples

An electrical power solutions manufacturer struggled with an ERP system upgrade, and it impacted every aspect of the business, requiring additional resources to support customer requirements. A base ERP system is no longer acceptable. Instead, a modern ERP system that supports customer expectations such as configure-to-order (CTO), customer relationship management (CRM), and customer-related functionality — including customer portals, order fulfillment visibility and backlog management — is essential.

Since the ERP team didn’t have the time required to fully prepare, the executives quickly supplemented with additional consulting and temporary resources, developed interim solutions for tracking backlog, and ordered ahead to support the transition. Even with one of the best management teams in the industry, until modern ERP functionality was available, they had to implement several stop-gap measures to avoid significant customer impact.

An industrial manufacturer struggled to forecast revenue accurately one month ahead, causing frustration with their board of directors. An assessment of their business processes and use of technology showed that their sales and order entry systems did not talk with their production and inventory control systems. Although Sales could estimate revenue, Operations had no idea which products would be required to support that revenue until Engineering completed design. Thus, although performing above expectations, the two rarely met.

To turn this situation around, we had to build a bridge between the two systems with a data model. However, that alone wouldn’t resolve the issue, as the product details were not known soon enough to ensure seamless delivery and revenue predictability. Thus, in addition, the team created a digital-twin-type capability to predict the product grouping and model information with a SIOP (sales inventory operations planning) process so that materials could be purchased and capacity planned. Once this information was built into automated dashboards, Production was able to transition from reactive to proactive, thereby creating predictability in shipping plans and taking it a step further with proactive margin enhancement strategies.

An aerospace manufacturer continually struggled with on-time delivery, and customers were losing patience. The issue was a bottlenecked area of the manufacturing process that simply could not keep up. They could not find enough high-skilled resources to run the machinery on second and third shifts, and overtime was maxed out. The team pursued an alternate strategy to employ a technological solution to run lights out around the clock.

They purchased a robot and focused their most advanced resources on modifying the robot to work in their manufacturing environment. With the upgraded robot, their high-skilled resources refocused attention on setting up the machinery during day shift, which allowed the robot to perform the repetitive tasks on second and third shift. Order delivery performance improved rapidly, and customer complaints disappeared as the bottleneck was removed. Later, they focused on upgrading their distribution processes with lights-out capabilities as well to further differentiate performance.

Forward-thinking companies will pursue smart technology upgrades while their competition focuses on containing cost. The companies that figure out how to do more with less and digitize their supply chain will thrive while the rest struggle. Resources will no longer be plentiful, and so pivoting with technology will be the only route to executing successfully while meeting ever increasing customer expectations.

Originally published in Adhesives & Sealants Industry.

The post Automate, Digitize, and Thrive in the Supply Chain appeared first on LMA-Consulting Group, a supply chain consulting firm.

Lisa Anderson was quoted in a SelectHub article on automation changing the supply chain landscape: “Automation is coming, whether or not we get on board. To thrive in today’s Amazon-impacted business environment, customers expect rapid deliveries, 24/7 accessibility, last minute changes and easy returns with innovative service options such as Amazon Key In-Car Delivery. To meet these ever-increasing expectations while increasing profitability and cash flow, executives are looking to technology such as robotics, IoT, artificial intelligence, automation equipment and predictive analytics to accomplish these objectives.”

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When the term automation comes up, most people experience a brief sci-fi laden slideshow in their heads. It’s the year 2021, humanoid robots take to the streets disrupting life as we know it and clashing with their old human masters. Lucky for us, when it comes to the world of supply chain automation, robots are more about increasing efficiency and less the whole enslaving humanity angle.

It’s no secret that demand for flexible, accurate and nimble supply chain logistics is on the rise. As consumer and client bases continue to grow at rapid rates, supply chains will need to adapt to larger, more complex methods of information and product transportation. However, there are many time-consuming processes that go along with managing a successful supply chain.

Here is where automation steps in. Time-wasting processes can fall into automated workflows, and human employees can spend more time forecasting, analyzing trend data and developing relationships with clients.

We spoke to Lisa Anderson, the founder and president of LMA Consulting Group Inc., about her thoughts on automation in the supply chain.  “Automation is coming, whether or not we get on board. To thrive in today’s Amazon-impacted business environment, customers expect rapid deliveries, 24/7 accessibility, last minute changes and easy returns with innovative service options such as Amazon Key In-Car Delivery. To meet these ever-increasing expectations while increasing profitability and cash flow, executives are looking to technology such as robotics, IoT, artificial intelligence, automation equipment and predictive analytics to accomplish these objectives.”

Anderson also had this to say on the subject of the cost of automation: “Most executives do not want to be the guinea pig for new technology as they cannot afford disruption and risk. Thus, as new technologies such as robotization and AI advance, they are starting to put their toe in the water to test these technologies and partner with experts to find ways to utilize these technologies to achieve bottom-line improvements. Most executives are so busy trying to keep up with Amazon-like customer expectations while meeting Board financial objectives, they are waiting until these concepts are proven and implementable before jumping in. Yet, we are seeing a definite uptick in interest, trials and small implementations in the last six months.”

To read the full article, click here.

Did you like this article? Continue reading on this topic:
Manufacturing and Supply Chain Technologies: From 3D Printing to AI

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Lisa Anderson was quoted in a SelectHub article recently on the best production planning software for the manufacturing industry in 2023. She says a wishlist of key features for your facility is key.

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Best Production Planning Software

Production planning software is a manufacturing solution that helps you plan for and supervise essential workflows in the production process.

Our analysts compiled a detailed list of the best production planning software with the top benefits, features and limitations. We’ll also discuss top benefits, must-have features and the best way to choose the right manufacturing planning software for your business.

Key Features

When you shop for new solutions, you must have a wishlist of features needed for your facility.

Lisa Anderson, founder and president of LMA Consulting Group Inc., discussed sequencing similar items during production as an essential capability.

“If you think about it in terms of colors or flavors, you would want to run all the dark flavors together. You would want to not run them before you go to a light flavor. So basically, the ability to tie together like items in a production run, and know how much time you’ll need for that category of items.”

Anderson also elaborated on the importance of what-if scenario planning.

“You want to be able to see, ‘Well, what if I have a second shift? How can I rearrange my production plan? Can I find a more efficient way to do it where I can minimize waste or maximize efficiencies? What if I have this situation or that situation?’”

Here’s a helpful list of the best production planning software features to consider when browsing vendors and resellers.

To read the full article, click here.

The post Best Production Planning Software – SelectHub appeared first on LMA-Consulting Group, a supply chain consulting firm.

Medtech companies’ focus on supply chain resiliency and mitigating supply chain risk has increased over the last few years as the pandemic triggered extended lead times, delays, and rising costs. Executives must now be able to pivot quickly to changing conditions, and they want to be in control of their ability to successfully serve customers. In reviewing options to meet these objectives, the critical importance of enterprise resource planning (ERP) and related manufacturing and supply chain technologies has risen to the top.

Taking Control of the Customer Experience

One way to take control of manufacturing and the supply chain as well as build resiliency into the customer experience is by focusing on expanding manufacturing and reshoring manufacturing closer to customers. Reshoring Initiative data show the combination of reshoring and foreign direct investment (FDI)-related job announcements last year reached record high levels—a trend that is expected to continue. As companies reshore, there is a significant emphasis on automation, robotics, 3D printing/additive manufacturing, and other supply chain technologies to reduce costs, minimize hard-to-find talent, increase quality, and keep abreast of customer requirements.

Nearshoring also remains popular for companies that want to improve customer performance by moving manufacturing closer to customers. Mexican exports, for example, rose 5.8% to $52.9 billion in May 2023, the second highest reading on record, according to Bloomberg. Mexico is also automating, digitizing, and employing advanced manufacturing methods. Case in point: Global automotive technology firm Luminar announced in April the build-out and ramp up of a new highly automated, high-volume manufacturing facility in Monterrey, Mexico. Moreover, Nuevo León Gov. Samuel García, said at the World Economic Forum in January that an “advanced manufacturing platform” would soon be launched in the state to focus on process digitization and automation.

Besides supporting reshoring and nearshoring initiatives, medtech firms also are interested in deploying advanced manufacturing techniques to augment their competitiveness. With skyrocketing inflation, manufacturers are paying more for materials, components, labor, and freight. In addition, the cost of capital has increased significantly, further decreasing margins, and limiting cash flow. Thus, manufacturers are searching for opportunities to increase efficiencies, automate repetitive processes, utilize robots, and embrace digitization as much as possible to decrease costs, increase margins, and better control customer pricing.

To grow their business, manufacturers are focusing on providing customers with a superior experience. In the current Amazon-impacted business environment, customers expect rapid deliveries, 24/7 service, and quick responsiveness—elements that once were considered forward-thinking and innovative but have now become essential. To stand out from the crowd, companies must go beyond these fundamentals and offer a differentiated or personalized customer experience. Thus, using a modern ERP system is essential to success because it will support these basic needs and augment them with such related technologies as customer relationship management, order fulfillment visibility, warehouse management system, transportation management system (TMS), e-commerce, advanced forecasting and planning, artificial intelligence, and predictive analytics.

A healthcare products manufacturer that distributed products throughout the United States wanted to improve their service levels, lead times, and inventory levels across its various facilities for customers. The manufacturer accomplished this goal by rolling out a vendor managed inventory system with suppliers and set aggressive scorecard metrics. The manufacturer used an ERP system to connect to its key customer’s demand and inventory data, and developed a forecasting and replenishment planning system. Hence, the manufacturer was able to establish an efficient system to maximize service levels for its customer while minimizing inventory levels and costs by utilizing business intelligence reporting to identify forecast exceptions and advanced planning functionality to proactively manage service levels. The software provided visibility into key customers’ distribution centers so the manufacturer could decide how to reallocate inventory to improve service while reducing inventory. Additionally, by integrating the replenishment orders to its customers’ locations with ERP and TMS systems, the manufacturer maximized multiple-stop truckloads and route in an optimal sequence to minimize freight costs.

Manufacturing and Supply Chain Technologies

There are numerous manufacturing and supply chain technologies that yield a substantial return on investment. 3D printing is providing a distinct advantage to manufacturers interested in providing quick prototypes to customers, and it is being used in several medical and industrial applications. According to G2 and Oxford Performance Materials, more than 75% of American patients with damaged skulls from disease or trauma received implants made by Oxford Performance Materials’ 3D printer. GlobalData predicts that customization, lower production costs, and quick turnarounds will drive the medical 3D printing market’s growth. Such benefits, along with the sector’s 23% compound annual growth rate (IndustryArc data), is prompting smart manufacturers to increasingly pursue clinical trials for 3D-printed products.

Augmented reality (AR), virtual reality (VR), and digital twins (a digital representation of an intended or real-world physical product, system or process) are some of the promising technologies in manufacturing and supply chain circles. They are particularly valuable in the current business environment as companies grapple with limited high-skilled resources, cost management concerns, and delivering a superior customer experience. AR/VR is used to train employees on ways to use and maintain equipment, about trials and simulations responsibilities, in collaborative product design, and in remote monitoring and factory audits. Digital twins can be used to evaluate “what if” scenarios to optimize the plant floor or data sets. An engineer-to-order manufacturer, for example, can utilize a digital twin to evaluate capacity with various configuration forecast models to stay ahead of customer requirements and result in a more efficient and responsive supply chain.  

The Metaverse can bring together customers’ wants and needs. In essence, it can accelerate the SIOP (Sales Inventory Operations Planning) process. In a metaverse collaborative room, retailers and their suppliers (or any set of customers, consumers, and suppliers) can meet virtually to review sales forecasts, projected production plans, and possible supplier limitations that could affect manufacturing volume. They can also visualize an immersive supply chain network map, see where inventory is, identify issues, and model possible alternatives.

The internet of things (IoT) and artificial intelligence (AI) are transforming the supply chain as well. As ERP systems, machines, and vehicles capture data with IoT, AI will learn how to predict breakdowns and recommend predictive maintenance plans, making preventative plans obsolete. Forklifts and autonomous vehicles will capture many signals and provide alerts to prevent impending safety incidents, and advanced planning systems will utilize machine and operational performance data to predict run rates and provide insights on how to minimize usage.  

Robots are bringing a new level of efficiency and repetitiveness to manufacturing. Industrial manufacturers are using welding robots to produce parts around the clock to minimize labor costs, quality issues, and injuries. Similarly, an aerospace manufacturer developed a robot that could produce on second and third shift with lights-out manufacturing a complex process to address a critical shop bottleneck. The aerospace firm quickly alleviated past due orders and got in front of its customer’s needs.

Manufacturers are also pursuing visibility across the supply chain so that customers can check status around-the-clock and supply chain partners can gain visibility and respond to changing conditions. Thus, digitizing information in the supply chain is a priority. This can range from simple concepts of barcoding/ RFID, lot tracing, and electronic data interchange to complex and collaborative topics such as customer portals, supply chain control towers, and port optimizers. Taken a step further, companies are investing heavily in blockchain to gain an immutable ledger of product and financial transactions across the supply chain.

The Bottom Line

Smart executives will leverage ERP systems as well as manufacturing and supply chain technologies to create a customer service edge. Equally important, they will automate, digitize, and turn data into insights to help their organizations become forward-thinking, resilient, efficient, cost effective, and predictable. Since only these uniquely positioned, innovative manufacturers that can scale up or down rapidly will be prepared for the change and volatility in the global supply chain, they will have the unique opportunity to leapfrog the competition, capture market share profitably, and be in the position to thrive for decades to come.

Lisa Anderson is founder and president of LMA Consulting Group Inc., a consulting firm specializing in manufacturing strategy and end-to-end supply chain transformation that maximizes the customer experience and enables profitable, scalable, dramatic business growth. She is president of the Inland Empire Chapter of APICS, the leading trade organization of supply chain management. Anderson recently released Future-Proofing Manufacturing and the Supply Chain Post COVID-19 as an e-book. 

Originally published in MPO November/December issue.

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CLAREMONT, CALIFORNIA – September 29, 2023 –  Manufacturing and Supply Chain Consultant Lisa Anderson, MBA, CSCP, CLTD, known as the Strongest Link in Your Supply Chain® and President of LMA Consulting Group Inc.,  underscores the pivotal role of Enterprise Resource Planning (ERP) systems in modern business strategy. LMA Consulting Group specializes in supporting manufacturers and distributors in strategic planning and comprehensive supply chain transformations, focusing on enhancing the customer experience and facilitating robust business growth.

In a rapidly evolving digital age, the emphasis on ERP systems has never been more pronounced. More than just supportive tools, these systems are integral for sustaining profitability and addressing evolving customer needs. “Modern ERP systems are no longer just about transactional processes. They are now pivotal in meeting customer requirements, supporting automation and integrating other essential technologies like AI, IoT, CRM and e-commerce. The real question today is not just about possessing an ERP system but ensuring it aligns seamlessly with business aspirations and customer expectations,” stated Ms. Anderson.

Given the hefty investment ERP systems often represent, their implementation requires meticulous planning and strategic alignment. “A roadmap is essential for achieving desired outcomes. I’ve seen instances where the urgency led to ERP implementation without data migration causing elongated post-implementation recovery phases, resulting in lost customers and revenue,” she added.

A strategic evaluation, coupled with a thorough ERP assessment, can guide businesses in identifying core business requirements, discerning profit-driving factors and ensuring that their ERP system aligns with their overarching goals. With the complexities of ERP solutions, where each provider is touting unique features, seeking external expertise provides an unbiased perspective, allowing businesses to navigate the complexities with clarity and confidence. 

For deeper insights into navigating the complex landscape of ERP and global supply chains, download Ms. Anderson’s special report The Road Ahead: Business, Supply Chain & The World Order. Additionally, her resource SIOP (Sales Inventory Operations Planning): Creating Predictable Revenue and EBITDA Growth offers invaluable strategies for organizations. Download it at LMA website,  Amazon and Apple.

About LMA Consulting Group – Lisa Anderson, MBA, CSCP, CLTD

Lisa Anderson is the founder and president of LMA Consulting Group, Inc., specializing in manufacturing strategy and end-to-end supply chain transformation.  Ms. Anderson is a recognized Supply Chain thought leader by SelectHub, named a Top 40 B2B Tech Influencer by arketi group, a Top 16 ERP Expert to Follow by Washington-Frank, in the Top 10 Women in Supply Chain by Warner PR, in the top 55 Supply Chain & Logistics Experts by flexport, and a woman leader in Supply Chain by RateLinx. She has been interviewed by Fox News and published the ebook, Future-Proofing Manufacturing & the Supply Chain Post COVID-19, Her primer, I’ve Been Thinking, provides strategies for creating bold customer promises and profits. An expert on the SIOP process (Sales, Inventory Operations Planning), advancing innovation, and making the supply chain resilient, Ms. Anderson is regularly interviewed and quoted by publications such as Industry Week, Bloomberg, and The Wall Street Journal. For information, sign up for her Profit Through People® Newsletter or for a copy of her book, visit LMA-ConsultingGroup.com.                 

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Should ERP & Related Supply Chain Technologies Be a Priority?

ERP and related technologies should only be a priority if you want to grow and succeed for decades to come. By utilizing ERP and supply chain technologies, you’ll maximize your efficiency and drive customer satisfaction. If not, it will be the same as if you said you wanted to stick with the horse and buggy instead of leaping into a Ford.

To put this into perspective, according to Deloitte Insights (from 20220), manufacturers’ average IT budget as a percentage of revenue is 2.14%. Of course, it depends on whether you are small or large, but the ballpark remains valid. If focused on ERP (as a modern ERP system is vital to success), a rule of thumb is that you’ll spend 5-7% of revenue (for the full project price and implementation cost). How do these compare with your budgets?

Why Should ERP & Related Technologies be a Priority?

The future will be for those who are innovating and using technological advances. Manufacturers and distributors are navigating a mountain of geopolitical, natural resource and rare earth issues in addition to navigating interest rate impacts and a host of other economic challenges that create negative headwinds on preparing for profitable growth and contributing to key financial indicators. Instead of pushing a boulder uphill, it makes sense to look for new solutions and strategies to solve old issues. One of these strategies is to maximize the power of ERP and related technologies.

Will my ERP System Suffice?

Of course, the answer to whether you should upgrade your ERP system is that “it depends”. Upgrading your ERP system isn’t for the faint of heart. 80% fail to achieve the intended results. Yet having a modern ERP system that supports your needs is absolutely essential to support growth plans.

No matter your situation, you can start immediately by better leveraging your underutilized asset. In almost 20 years of consulting, I’ve yet to find a client that couldn’t better utilize their ERP system to attain bottom line business results. Read our comprehensive article to find out how – The MacGyver Approach: Leveraging Your Underutilized ERP Asset. For example, an aerospace manufacturing client was struggling to provide high service levels to their customers while dramatically reducing their inventory levels with a wide breadth of products to support their growth goals. In addition to process improvements and common goals, a key ingredient to success was leveraging additional ERP functionality to improve their production and inventory planning processes across their production facilities.

However, as customer expectations have increased, supply chains have become increasingly complex, and margins have been squeezed with rising costs, having a modern ERP system is the only viable path forward for sustainable success. How do you know if your ERP system will suffice and whether an upgrade should be a priority? Read our article on find out the answer. If you determine you should modernize your ERP system, check out our guide for selection and implementation success.

What Technologies are Required to Support Success?

Again, of course, the answer is “it depends”. With that said, the answer is NOT that you can afford to sit still. What is absolutely clear is that only manufacturers and distributors that pursue advanced technologies will thrive in today’s volatile and complex age.

There are countless technologies that might be appropriate. No client should pursue all of them. If everything is a priority, nothing is a priority. The key is to review your growth plans and assess your SIOP (Sales Inventory Operations Planning) process results to set your technology priorities. A few of these technologies that pop to mind include:

• Robotics: Almost every client is testing, trialing or using robots. There has been controversy over people vs robots in some circles although manufacturers are flipping that equation to people and robots. Read examples in our article, People vs Robots. It doesn’t make sense in every situation. In fact, one equipment manufacturing client chose not to pursue a specific robot because it didn’t provide a return on investment and slowed down the process after thorough testing. On the other hand, another client continues to add welding robots which automates repetitive tasks.
• Artificial intelligence: Demand planning, also known as sales forecasting, is important for every company, and artificial intelligence can always add value to the forecast yet is especially key for hard to predict patterns such as those in consumer products industries. AI is used in countless manufacturing and supply chain technologies. Check out our recent article on AI, titled “ChatGPT & AI: Good or Bad?“.
• Predictive analytics: Business intelligence, big data, and predictive analytics are proving essential. Every ERP system can provide you with an overwhelming amount of data. The issue is sifting through the data to get meaningful information for decision making. Read our article to get strategies to turn data into insights. Taking that a step further to using your data to predict the future can give you an advantage over your competition.
• E-commerce (B2B and B2C): Consumer expectations continue to increase. After all, who doesn’t expect immediate deliveries from Amazon? What goes on behind the scenes to make that happen isn’t a no brainer. Read our articles on manufacturing opportunities in e-commerce and B2B, B2C & Associated Technology.
• Digital twins: What could be better than simulating your factory, products, your supply chain etc.? Digital twins enable better designs, planning, and much more to contribute to customer success and EBITDA growth.
• Autonomous capabilities: These capabilities are used widely in manufacturing environments to supply or move materials and components; in logistics and distribution environments to move items and in transportation and goods movement to move products.
• And many, many more such as drones, blockchain, additive manufacturing, mixed reality/ metaverse, internet of things (IoT), 5G, etc.

The Bottom Line

Jump into the world of technology. Bring on experts and deep dive into those areas that will provide significant benefits to your business. Minimally, you should test and trial the use of advanced technologies. Perhaps you’ll even combine technologies in a new way or develop a new technology to support your profitable growth.

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Modernize Your ERP System: A Guide for Selection & Implementation Success

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