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How will technology underpin manufacturers’ growth ambitions?

Author : Nick Goode, EVP Product, Sage

01 August 2019

Nothing demonstrates the changes wrought by globalisation like a trip to the supermarket. Today, shoppers strolling the aisles can find mangoes from India, wild salmon from Alaska, asparagus from Peru and much more from the farthest-flung corners of the world.

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But the shrinking world hasn’t just had an impact on our cooking – it has fundamentally changed our expectations of the products we buy and the companies we deal with. Consumers have become much more discerning and demanding: we’re worried about the provenance of our purchases; we want to be assured that what we buy is ethically sourced and environmentally friendly.

Providing these guarantees is key for manufacturers in today’s competitive landscape. Having the best product or the cheapest price is no longer enough if manufacturers cannot answer consumers’ questions on a range of issues from child labour to the carbon footprint of the supply chain. Manufacturers meanwhile must ensure that they can trace every item from raw material to finished object, knowing that any defect could have disastrous reputational consequences if it results in death or injury.

The future of manufacturing belongs to those businesses that can most effectively harness new technologies to bring these benefits to consumers, while simultaneously reducing operational costs and improving efficiencies. Industry 4.0 and emerging technologies such as AI, IoT and blockchain will deliver greater insight and transparency that will lead to a closer and more trusting relationship between consumers and brands.

But with manufacturers under pressure from so many different directions, and with so many competing priorities, which technologies will underpin their growth ambitions? Earlier this year, Sage spoke with 900 senior manufacturing professionals in the US, UK and Canada to discover their most pressing business challenges – and which technologies they believe will provide the answer. 

Competing priorities 

Every business wants to maximise profits, increase revenue and reduce costs. When looking at the future of the process manufacturing industry, it’s key to look at the specific priorities of manufacturers seeking to achieve these goals.

According to Sage’s research, the most urgent short-term priorities for manufacturers in the UK, US and Canada are improving customer services, investing in technology to boost productivity and R&D to create new products and services for their customer base. Unsurprisingly, investment in productivity and customer services also feature among manufacturers’ top three long-term goals.

With the rise of vegetarian and vegan lifestyles and the rise in litigation when contaminated food hits the supermarket shelves, another key area requiring attention is the need for traceability. As we’ve seen, customers are increasingly demanding transparency from brands; manufacturers clearly recognise this, with over half of respondents from each three countries identifying loss of brand value as the chief risk of failing to incorporate traceability within the supply 

Investing for the future

With so many competing short- and long-term priorities, it can be difficult for manufacturers to know where to start. However, Sage’s research found that investing in emerging technologies can solve many of the pressures facing manufacturers. The top benefits of such an investment include reduced operational costs, increased visibility or traceability across the supply chain, and automation of repetitive tasks. 

While manufacturers labour under a wide variety of pressures, and although there are many technologies that promise to transform their operations, enterprise resource planning (ERP) is the answer to many of the most pressing priorities. ERP supports the connected business like no other technology, linking the front office to the back office and providing instant insight into day-to-day operations which in turn aids strategic decision making.

While it’s encouraging that process manufacturers are embracing the opportunities afforded by new technologies, at a time when many organisations are preparing for or undergoing major digital transformation initiatives, it’s crucial that IT is in sync with other departments.

Globalisation, its challenges and its opportunities are not going away. One of the big finds in our research is that 99% of manufacturers are preparing for growth – and their adoption of new technologies means they are right to be confident. It’s vital, however, that manufacturers are taking a strategic approach to the huge changes that they must make to remain competitive in tomorrow’s business landscape. 

If business and IT can work more closely together to align technology with wider organisational strategy, the outlook for the manufacturing sector looks far more positive than the doom-mongers suggest.

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