Columbus Manufacturing
How ERP
changes the
competitive
landscape for
small and midsize
manufacturers
Manufacturing sector
Article
Small and midsize manufacturers used to manage all of their operations
through spreadsheets or accounting software. For a while, that
solution worked just fine, but as better technologies have been
introduced to manufacturing over the past few decades, many of those
smaller manufacturers have found that management method lacking.
Manufacturers in today’s markets need more than a basic knowledge of
what’s happening inside their organization. They need global reach and
detailed understanding of internal processes.
An enterprise resource planning (ERP) solution has always been the
tool that helps a company move from the small and midsize business
(SMB) market into wider, more global competition, but the commitment
to install ERP software was one that no company could take lightly. It
required a solid commitment of both time and money to ensure that
the implementation was successful, and most SMBs couldn’t afford to
make that move. The commitment of time and resources was more than
any justifiable return, and often, the SMB made the investment only to
abandon it later because it was too complicated or too costly.
Technical Confidence
Times have changed. Today, small and midsize
manufacturers that still use spreadsheets and
accounting software as the backbone of the
organization will find themselves left in the
dust of companies that choose to implement
an ERP application, whether it’s an in-house
suite of functionality or a cloud-based
Software as a Service (SaaS) application. ERP
has become such an essential part of doing
business that it’s changing the competitive
landscape for SMBs. Those organizations that
choose to ignore the capabilities that ERP
enables will likely not be around a few years
from now.
Fortunately, ERP has changed along with the
times. With the availability of SaaS and cloud-
based ERP applications, small and midsize
manufacturers no longer need to commit a
large chunk of time and financial resources to
implement an ERP application. A typical SaaS or
cloud-based ERP application can now be fully
rolled out in a matter of months at a cost that is
probably less than the investment required to
keep manual tracking methods updated.
Adding ERP as a service also gives small
and midsize manufacturers the technical
confidence to strive for excellence in all
areas of manufacturing, from planning
and procurement to manufacturing and
distribution. This means that small and midsize
manufacturers can compete even with
enterprises in markets that were previously
unavailable. The result is rapid growth and
expansion for some smaller manufacturers.
Global Reach
Of course, along with expansive growth
come challenges. One particular challenge
for small and midsize manufacturers is the
ability to gain global reach. Not only are
today’s small and midsize manufacturers
faced with customers who might reside in
other countries, but suppliers and vendors
may, as well. This introduces a new set of
complications that organizations that don’t
have an ERP system will find nearly impossible
to navigate.
With an ERP system, however, even small
manufacturers can access global customers
and vendors. Small and midsize manufacturers
can navigate these international relationships
without concern for the multinational
or multicurrency nature of transactions,
because the right ERP system will be
designed to manage global relationships,
including accounting issues, logistics, and
regulatory issues.
Lean and Agile Manufacturing
Competing in today’s market isn’t just about
creating the appearance of being a large
company or having global reach. Small and
midsize manufacturers that want to remain
competitive in this market also need to be
able to respond quickly to market shifts and
customer demands, and they need to be able
to reduce costs while being responsive. Lean
and agile manufacturing is no longer wishful
thinking: it’s a critical requirement.
Small and midsize manufacturers in today’s
market that want to be here tomorrow need
ERP to have the right planning, forecasting,
and insight capabilities to be flexible while
operating on less. Spreadsheets and
accounting programs can’t provide that kind
of insight. It takes a robust ERP application
that can tap into both historical and real-time
customer, vendor, and manufacturing data to
provide detailed insight into changing trends,
efficient processes, and customer demands.
If this market sounds tough, consider this:
competition is only going to increase. More
small and midsize manufacturers have the
ability to access the functions and capabilities
of ERP applications. The availability of ERP in
the cloud or as SaaS offerings means that it’s
no longer just an option for enterprises. The
landscape of this competitive market makes
ERP a requirement for small and midsize
manufacturers and those that choose to
ignore that requirement are risking their
very future.
At Columbus, we help our customers digitally transform their businesses
and improve the value realization of their business application investments.
We mitigate the inherent risks associated with implementing, upgrading
and replacing legacy ERP systems. We lead our customers with best-practice
consulting services we have refined over thousands of engagements. We take
care of our customers and aspire to keep them for life.
To learn more about how Columbus
can help you get the most out of your
Microsoft solution, contact your local
Columbus office.
www.columbusglobal.com
