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Can tough economic conditions actually be a blessing in disguise for businesses?

Vincent Tang, Regional Vice President, for Epicor North Asia at Epicor Software | Aug. 24, 2016
Businesses can overcome difficult economic conditions by better planning and the deployment of agile technology.

Improving visibility

The pressure on manufacturers to accelerate production cycles and become more customer centric is driving change, although perhaps more slowly than people have predicted. A key factor in this is the extent to which companies are restricted by the lack of visibility they have over an organisation's core processes.

Manufacturing generates more data than any other sector of the economy, with an abundance of operational and shop floor data that can be used to increase yields and reduce costs. The problem is that few companies are harnessing it. Last year, one oil-and-gas company was reported to be discarding 99 percent of its data before decision makers have a chance to use it. 

Manufacturers are increasingly realising the need to adopt technologies that allow them to transform their operating models and digitally connect processes, events, actions, internal and external partners.  Introducing software such as ERP can drastically improve the visibility of the whole production process, resulting in efficiency savings across the organisation.

Take, for example, inventory management processes. Central to ensuring inventory usage is maximised is the ability for manufacturers to increase visibility of all inventory levels. This includes static materials and maximising the value of, and gaining real-time visibility into, inventory in-transit.

Dutch solid wood systems manufacturer, Derako, is a great example of data best practice. The company benefits from an integrated ERP system with an intuitive dashboard for wood procurement which improves the purchasing process and saves considerable man-hours. The system makes intelligent procurement recommendations when it is running low on items like foil, nails, and doweling, providing the capability to respond quickly to market changes, customer requests, and stock levels.

ERP has effectively provided Derako with the necessary agility to become more customer focussed and competitive. The fact that the company can make decisions at the front-end of the business (customer) that automatically ripple through to the back-end (procurement and accounting) without manual intervention, ensures that they can provide the economic flexibility required to be truly customer-centric. 

In a world where markets are stagnating or declining, it is the businesses that use technology to combine efficiency with customer-centricity that will prevail. These are, after all, the businesses that can provide customers with maximum flexibility and choice at a low cost.

Ensuring growth through investment

Downturns force businesses to become smarter in order to compete with, and outperform, their competitors. Coming out of the last global economic downturn, the most successful companies have made progress in boosting competitiveness through efficiency and flexibility.

Companies should be looking to invest, drive efficiency, increase productivity, and increase market share now. While the effect may be small during slow times, it could help them survive and the effects will then be magnified as the economy recovers. Companies that wait until economic recovery before they invest could be months or years behind.

 

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