The Manufacturer’s Puzzle
Making products can be a bit of a puzzle. You have to fit the right parts together to create the product. Each of those parts comes from somewhere. Some you need to create yourself, but most of the time there are companies that manufacturers acquire the resources from. The process is called procurement.
Procurement is the first of many puzzles that a manufacturer has to solve. Essentially, the products they create have a purpose. Many small and medium-sized manufacturers tend to make the products that make up larger products (that other manufacturers build). As a result, their revenue typically comes from supplying other manufacturers with pieces that will make up the products they are manufacturing. To streamline the procurement process, many companies have started relying on automated systems to tell them when they need to re-up.
Once the resources have been acquired, now it’s time to make the products. Of course, the costliest part of any manufacturing company is the actual manufacturing of the products. This is mainly because the capital costs of purchasing the machinery needed to manufacture goods, coupled with the operational costs of payroll and downtime caused by machinery malfunction (and the subsequent maintenance required), adds up to a significant investment. Companies today are searching for new ways around these costs. Enhancements in automation have made it possible for the smaller manufacturer to trim their production costs, while keeping their output static.
The last piece of the puzzle for the manufacturer is the distribution of the products to consumers. In many cases the consumers in this scenario are retail businesses. They need the costs to be low enough to be able to offer them to their customers with a markup. Problems with distribution, like problems in the procurement stages, can be devastating to the manufacturer’s ability to create a positive revenue stream.
Where IT Fits
The entire process can be aided by information technology, but manufacturers tend to look at things in stages…like their workflow. Typically, organizations that have leveraged automation through the use of software systems, find that they are able to have more transparency and less overall inefficiency than organizations that don’t. Some software platforms that modern manufacturers are using include:
- Customer Relationship Management – This software helps a company streamline their customer service. It’s used to manage leads, opportunities, and customers.
- Supply Chain Management – This software helps a company control their entire supply chain from procurement to distribution.
- Inventory Management – Manages stock and standardizes and automates replenishment.
- Asset Tracking – Using sensors, every product and resource can be tracked to provide efficiency.
These solutions and more can be found in what is called an Enterprise Resource Planning software. While ERP software is comprehensive and offers organizations a lot of benefits, smaller manufacturers may not need the immersive control that many ERP systems provide. Finding the right software to meet your needs is important to ensure that your business can be as effective as it can be.
The IT professionals at Aspire can help you find the software you need to gain full control over all of your business’ processes. Call us today to learn more at (469) 272-0777.