Opportunities in any industry are molded by the challenges they face and how the stakeholders choose to react to them. The manufacturing sector is no exception to this phenomenon. When manufacturing sector faced stagnation, assembly lines renewed the industry’s approach accelerating production to the level as we know it now. Similarly, there are a new set of challenges that are defining long-term competitiveness. Uncover the details of what these challenges are and how they can be turned into opportunities with the right approach.
From adapting to the consumer perspective to technological limitations, there are various reasons that are limiting a manufacturing company’s competitive advantage in the market.
Supply chain volatility: Global markets faced sudden turmoil due to disruptions in the supply chain more than once in the last 2-3 years. COVID and intergovernmental relations emerged suddenly, disrupting supply. however general demand/supplier volatility can also prove to be detrimental. When businesses rely on specific suppliers to limit management burden, they expose themselves to a greater risk of disruption. The need to engage with multiple suppliers is clearly visible as ascertained by global leaders. In order to effectively manage such a diverse and extended supply chain and resulting fatigue, manufacturers should facilitate dedicated applications that can easily be integrated into the existing framework.
Carbon emissions: The traditional approach to manufacturing continues to leave an enormous carbon footprint that includes emissions made by the supply chain, vendors, suppliers, and how the end-products are consumed and disposed of. Most organizations do not keep a track of this effect on the environment. But consumer interest to engage with carbon-conscious businesses is increasing and organizations must work to identify and neutralize their footprint to remain desirable.
This could be the right opportunity to enable a mechanism to track and identify emissions, i.e., industrial wastage, CO2 & NOX emissions, etc. An intelligent enterprise resource platform that is connected and analytically sound offers visibility and insights that could lead to corrections at the root cause. This could gradually pave way for moving toward sustainable practices. They also offer scope for improving efficiency while addressing emission challenges thus offering profitability as a benefit.
Energy costs: Various geo-political reasons are affecting the costs of energy sources which has a direct impact on business revenues. While some companies plan on migrating site locations, the additional cost of moving is not financially viable for all businesses as it affects established supply chains and supplier relations. Utility management is therefore essential more than ever before.
Shifting the source of energy could provide relief in the long run; however, it is essential to monitor, gather and analyze energy data to spot lapses in efficiency and thus responding to them. As resource (electricity, oil, and gas) costs continue to rise, it is incumbent on manufacturers to closely observe asset utilization and reallocate them, and thus spend them judiciously. Asset management tools customized to track assets can unlock critical insights into energy consumption allowing stakeholders to make informed decisions to conserve them.
Skill shortage: While there are multiple reasons leading to skill shortage, ineffective change management and lack of succession planning are playing a key role for lack of talent in the manufacturing sector. As organizations evolve, new tools and processes come to play which require that employees be trained. Human capital management must be supplemented with well-planned change management and inclusive development plans. To bring in a transparent approach, information must be disseminated consistently from a single source to help them understand the need for growth. This in turn can prepare them for succession and strategic cross-boarding to fill new roles while making efforts to acquire new talent.
With so many opportunities for change, manufacturing companies can benefit the most by choosing to make an organization-wide transformation. The move to become sustainable, resilient, efficient, and employee-centric will strengthen the desirability of the business and attract more customers and clients.
Talk to an expert to gain a deep understanding of current challenges and how they can become an opportunity for profitable change.
Widely acknowledged for offering extensive transformation for many industries, manufacturing businesses stand to benefit by implementing SAP’s Cloud ERP solution - SAP S/4HANA. While allowing the advantage of cloud hosting, it offers a natural progression with built-in modules for analytics, supply chain management, inventory management, warehouse operations, and many more. SAP SuccessFactors, a custom-built human capital management tool helps to manage and acquire talent amidst challenging scenarios. The solution is built with care to enable sustainable practices leveraging its features. As a renowned partner in MEA for SAP solutions, Exalogic’s consultants can help with gap analysis, fitment planning, and process maturity consulting along with expert implementation support.