The Changing Manufacturing Landscape: Why Corporate Performance Excellence is No Accident

Excellent corporate performance seldom happens by accident. In order to excel in performance you need a good plan; you need to monitor, analyze and manage performance against that plan and you need the agility to adjust as business conditions change. This is tough in any type of business, but the complexities of manufacturing are even more challenging, where you are likely dealing with global supply chains, pressures to reduce cost and cycle times, and a new competitive landscape.

This requires planning and reporting applications and analytics. And if you operate in any sort of distributed environment (and most companies do), you need to consolidate across multiple sites/divisions/operating locations.  While most manufacturers have been forced to implement applications like Enterprise Resource Planning (ERP) just to survive, planning and performance management largely remains buried in spreadsheets. With more choices for solutions and the option for convenient cloud deployment today, there is no longer any excuse for ignoring this need.

Sound Familiar?

Do any of these scenarios describe your current state?

  • Are you operating across multiple manufacturing plants, but only have tools that allow you to plan and manage at a corporate level?
  • Or are you planning and managing at the operating level but unable to consolidate to get the big picture? Does this cause redundancy of capacity even as you struggle to meet customer demand?
  • Are you completely reliant on IT for consolidation and reporting and therefore unable to simulate the potential effect of different scenarios?
  • Is your “plan” still in spreadsheets?

If you answered “Yes” to any of the above, it may be time for a change. While Mint Jutras research indicates the vast majority of manufacturers prefer a suite-based approach to their enterprise solutions, 61% will be cautious before sacrificing functional requirements for either ease of integration or to stay with a single vendor (Figure 1). Planning, performance management and analytics are likely candidates for these “add-on” solutions providing they can effectively interoperate with ERP and the data residing within.

Figure 1: Preferences for a Suite?

Adaptive Fig1

Source: Mint Jutras 2014 Enterprise Solution Study

Most manufacturers today operate across multiple locations, requiring the need for a consolidated view. While rolling up financials is a one-way street, relationships between manufacturing locations can be far more complex and therefore it may actually be easier to plan in a corporate performance management system that is ERP neutral.

While these types of tools used to be only within the reach of very large enterprises, with deep pockets, the good news is that today there are many more options. The overriding goal is to put the right tools directly in the hands of the business decision makers responsible for formulating and executing the plan. Because these solutions may potentially need to interoperate with a variety of different solutions at the corporate level, as well as at various divisions, a cloud-based solution may be the best way to go.

In a study dedicated to understanding perceptions and preferences for SaaS solutions (the Mint Jutras 2012 Understanding SaaS survey), we asked survey respondents to prioritize the various potential benefits of SaaS.

Cost savings remain at the top of the list of perceived benefits, by a significant margin. Reducing the cost and effort of upgrades is second. Next is the support of distributed environments. Sixty-six percent (66%) of manufacturers participating in our Mint Jutras 2014 Enterprise Solution Study operate in a distributed environment with the number of different operating locations increasing with annual revenues, so this is a very common need. It is an aspect particularly relevant in the context of planning and performance management, especially during the process of planning and executing a merger or acquisition. A cloud deployment breaks down the barriers created by existing (or nonexistent) on-premise solutions at remote locations, including those newly acquired.

The fact that no hardware purchase is required, and the on-going maintenance associated with that hardware, is marginally more important than the need for less Information Technology (IT) expertise and staff.

So….

What’s in your plan? Is it a pure macro financial plan or does it dive into the realities at the operational level? Does it incorporate plans for growth? Are those plans just a result of a board level decision to set goals or are they reflective of the capacity required to deliver against the plan? The planning and performance management of a manufacturer requires a delicate balancing of many different moving parts across a potentially distributed environment:

  • Actual and forecasted demand
  • Supply from trading partners and sister divisions
  • Logistics and cycle times
  • Headcount
  • Travel and expenses
  • Facilities and equipment, including factory automation
  • Etcetera….

What level of confidence do you have that you will be able to roll with the punches thrown at you through the course of the planning period? What tools do you have at your disposal to boost that confidence, along with your ability to deliver? If…

  • If your plan is just based on numbers handed down from the top…
  • If it is not reflective of operational realities…
  • If it doesn’t allow for change that is bound to occur during the planning period…
  • If you are still working in spreadsheets…
  • If you are waiting for added features and function from your ERP solution provider…
  • If you assume you can’t afford better tools…

Then you are leaving a lot to chance.

Interested in learning more? Click here to register for an informative webinar sponsored by Adaptive Insights.

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