eBook-WP ERP a Strategic Growth Driver for Manufacturing Firms

January 2013 - 1

ERP - a strategic growth driver for manufacturing firms

January 2013 - 2

Editorial 3The challenges facing manufacturing firms 4Information systems for superior 8productivity and added value Technologies as a driving force for innovation 10and development Sage - the partner for manufacturing firms 12 Our customer testimonials 13 Sage ERP X3 in brief 15


Sage© 2013 – All rights reserved – SAS (simplified joint-stock company) with a share capital of €500,000 - Registered office: North Park, Newcastle Upon Tyne, NE13 9AA - a public limited company registered in England and Wales under company registration number 2231246. The information contained in this document may be modified without prior notice. All logos, product names and companies mentioned in this document other than those belonging to Sage are used for identification purposes only and may constitute trademarks registered by their respective owners - Photo credits: Fotolia, Kerry Harrison -

S787_MME 06-13 -

Contents

January 2013 - 3


Manufacturing firms are in a state of constant change in their effort to keep pace with the ever-developing face of the business environment, such as the increasingly globalised marketplace, growing competitive

pressure and changing business practices. These are just some of the factors prompting companies to review their business strategy and lead organisational change. Changes are therefore required at every level, whether in terms of the range of products and services on offer, the organisational structure and business processes, or the IT infrastructure. At the same time, the use of new technologies is spreading like wildfire and ushering in a wealth of prospects for ramping up business growth and creating value for clients and customers alike.

ERP, the very backbone of the information system, also needs to evolve in a bid to factor in the company’s structural changes and new challenges. In addition to satisfying companies’ traditional needs, ERP system also needs to fuel their development by fostering superior performance and innovation.

Editorial

Isabelle Saint-Martin, ERP Market Manage, Sage Mid-Market

January 2013 - 4

• Automated manufacturing and lean

production, which are essential for

safeguarding profitability in every key stage of

production, picking, planning and analysis.

• Flexible skills and resources, including

temporary staff.

• Increasingly globalised marketplaces, trade,

production and supply chains, requiring

companies to find opportunities away from

home.

• Continuous innovation in the company’s

practices and tools in a bid to sense client

needs and deliver high value-added services.

The challenges facing manufacturing firms

The information system challenges facing manufacturing firms

In today’s world, manufacturing firms have a number of concerns in common, an indictment

of the winds of change sweeping through the sector and the new challenges threatening their

competitive advantage:

Process manufacturing Discrete manufacturing

Raise the bar on operational efficiency

and productivity

Streamline scheduling and manufacturing to reflect demand

Gain a complete insight into

business performance and profitability

Minimise inventory and WIP levels,

and monitor margins

Guarantee product and service quality

for greater customer satisfaction

Performance - Innovation - Development


January 2013 - 5

The information system challenges facing manufacturing firms

January 2013 - 6

Risks and constraints fuelled by the economic climateEver fiercer competition on a global scale is accentuating the trends already mentioned and their

impact on the company’s management constraints. Furthermore, customers are ratcheting up their

requirements and altering practices in response to the economic crisis.

• The onus is on manufacturing firms to achieve a competitive advantage through the quality of

their products and services. To stay in the running, small businesses often have no other choice

than to focus on an increasingly specific range of products in niche or ever narrower markets.

• They need to maintain a solid bottom line, despite seeing their margins eroded by rising costs

and a growing number of lower-cost manufacturers.

• They need to constantly improve their speed of response, flexibility and efficiency in an effort

to meet customers’ expectations in terms of commitments, lead-times and quality of service.


January 2013 - 7

Changing management practices within and between sectorsGlobalised trade, shifts in consumer behaviour,

technical progress and changing legislation

are just some of the factors influencing

management practices across the board,

whether design, production, trade or logistics:

Product lifecycle

Product lifecycles continue shrinking, while

each day yields more new technologies than

the one before.

If companies are going to protect their

margins in such a climate, minimising design

and production costs is a must, but this

approach will hamstring their ability to diversify

their product ranges or take manufacturing

complexity to the next level in their quest to

fend off cut-throat competition.

Keeping technical data under control will have

a direct effect on the profitability of a given

activity.

Compliance

New measures aimed at protecting the

environment have tightened up the standards

that require manufacturing firms to implement

and carry out extra checks and controls at

every stage in the production and shipment

cycle. Compliance with these legal constraints

may be harder to achieve when activities are

spread over several logistics and manufacturing

sites or divided among a group of companies

operating in the same sector of industry.

Globalisation

International development is key to achieving

growth in today’s global marketplace, meaning

that companies need to be more clued into the

different rules and tools.

Furthermore, companies need to step up their

efforts at implementing a global production

process if they wish to pursue a strategy of

extended production chains and distributed

manufacturing systems involving a wider

network of subcontractors.

Silo-breaking

Management practices are morphing across

the entire manufacturing industry and also

spreading into other industries.

Outsourced production, diversified products

and sales channels, and the advent of bundled

services are just some of the reasons why

manufacturers are drawing inspiration from

the practices used by merchants, importers,

retailers and distance sellers.

Such sales professionals and manufacturing

firms alike can secure a major strategic

advantage by improving customer relations

and marketing, streamlining their supply chains

and implementing multi-channel distribution

systems.


January 2013 - 8

New dimensions for supreme performanceManufacturers’ management systems have

often been pieced together over time and

consequently represent a patchwork of

solutions with varying levels of technological

maturity.

The result most often seen is an array of hybrid

solutions that have been added on in response

to the constraints of the moment, sometimes

including specialised tools and sometimes

proprietary developments.

Interfacing and repository consistency issues,

data traceability and reliability problems, and

system maintainability and obsolescence are

the main reasons prompting companies to

abandon their piecemeal system in favour of

integrated software solutions.

At the same time, streamlining administrative,

logistics and production processes may require

specialised solutions, such as PLM (Product

Lifecycle Management), APS (Advanced

Planning and Scheduling), MES (Manufacturing

Execution System), CMMS (Computerised

Maintenance Management System), WMS

(Warehouse Management

System) and CRM (Customer Relationship

Management). A whole range of software

add-ons is available from specialised vendors,

most of which are missing from traditional ERP

solutions, except for solutions designed for key

account customers.

In terms of the benefits of implementing an end-to-

end ERP solution incorporating such leading-edge

functionality, companies can expect to streamline

and control their business processes to produce

superior quality products in accordance with

applicable standards, while improving customer

satisfaction and reining in costs:

• Ramp up product development and

accelerate the time to market.

• Increase production and curb costs.

• Guarantee quality through improved control,

traceability and compliance with inventory

management rules.

• Satisfy legislative requirements using

workflow mechanisms, audit trails and

document management systems.

• Improve supply chain management and

forecasting.

• Raise the bar on customer service by

improving order processing, automating

deliveries and interacting with on-site and

roaming customers.

Information systems for superior productivity and added valueManufacturing firms have absolutely no choice but to raise the productivity bar if they wish to

withstand the pressure in their ever-changing business environment, while constantly breaking

new ground to keep ahead of the competition. The information system and its underlying ERP

solutions represent a major step forward in achieving those aims.

Companies can install an ERP solution to not only meet their operational needs, but also

streamline their IT infrastructure and deliver support when pursuing new strategies.


January 2013 - 9

Today’s ERPs need to offer a broader set of

functionality than earlier-generation solutions

and tick all the boxes with an explicit range of

suitability criteria. The market requires standard,

integrated or consistent solutions featuring

an extensive array of modern technologies

for improving process performance and

management practices, while responding to

the constraints facing small and medium-sized

fi rms.

The need for an open and collaborative system within the company and with its ecosystemERPs raise individual and collective

performance within the company by offering

real-time shared access to the same repository

using a set of tools that meet the business

requirements of each user or area of expertise.

In reality, the ERP’s mission is taken far beyond

the company’s internal business processes due

to enterprise-wide operations and management

practices between companies.

Logistics can be improved by boosting the

global performance of all parties involved in the

same supply chain.

Manufacturing fi rms are required to keep tabs

on their own stock as well as goods held by

partner companies, while sharing the same

forecast and traceability data.

On a different level, fi rms that belong to a

national or international group often run

into management problems that exceed the

boundaries of their own structure, such as

the sharing of standard data, group company

disposals, fi nancial reporting and statements,

and fi nancial traceability.

As the backbone of an “extended enterprise”, information systems must be interconnected

to ensure free-fl owing information between customers or clients, suppliers or subcontractors,

and subsidiaries or groups, as well as improve database synchronisation. To achieve this aim,

processes leverage the solutions’ technical capabilities in terms of supporting add-ons and

collaborative systems, including EDI, cloud-enabled real-time connectivity between systems,

sharing portals and platforms, trading hubs and other marketplaces.

Beyond the functional areas - business oversight and the company’s ecosystem

Purchasing Manufacturing Sales Services

SuppliersSubcontractors

CustomersClients

• Community• Business• Collaborative work

• Communication• Standardisation• Security

InternetEDI

InternetPartners Intranet

ContractsContracts

Logistics

Production

R&D Marketing

WWW EDI

Finance Operational a

nd decisi

onal

resources Management

Human Senioranalysiss

ERP - a strategic growth driver for manufacturing fi rms

January 2013 - 10

Application connectivity, power and flexible use: an example of an ERP with an EDM add-on

Extend the ERP’s scope to encompass

leading-edge functionality, interconnect the

ERP with external systems, software and

hardware, provide third-party access as part

of a collaborative work environment... all of

these examples rely on the solution’s technical

capabilities, especially support for web

technologies, mobility and third-party add-

ons. ERPs built upon modern technological

platforms leverage service-oriented

architectures and standardised protocols

to deliver seamless application connectivity

with hardware and software, as well as the

prospect of pooling developments. As such,

ERPs are composite systems, rather than

monolithic systems, boasting a flexible set of

practical functionality, while losing none of the

advantages of a single, shared repository with

real-time capability.

Embedded technology for seamless uptake and more effective tool useTechnology is an integral part of ERPs and

conducive to superior efficiency throughout

the company. Examples abound, such as

decision-support and reporting tools, electronic

document management and workflow

mechanisms allowing employees to work

together in an orderly and transparent fashion

via the messaging system. Offering users a

personalised area complete with graphical

representations of their commonly-used

processes and functions shortens the learning

curve and promotes higher productivity.

Technologies as a driving force for innovation and development

• Quotes• Orders• Invoices

• Quality reports• Technical documentation

• Delivery notes• Invoices• Contracts

Accounting& Finance

Human resources

After-sales

Purchasing Sales

Production

• CV library• Contracts of employment• Social security statements• Pay slips

• Financial reports• Accounting records Online tax returns

• Callout reports• Orders• Invoices

PDF

Sage ERP X3

ERP documentsInternal and External


January 2013 - 11

Application connectivity, power and flexible use: an example of an ERP with an EDM add-on

Furthermore, the technology encourages company employees

to adopt and use the management tools more effectively.

For a long time, steep learning curves put the brakes on ERP

uptake among users, often meaning that companies had to lay

on extra support and training.

The main culprits were counterintuitive applications often with

no bearing on business users’ needs, and poor knowledge or

even distrust of IT technology.

86%New technologies make life easier

81%New technologies improve working conditions

“Leveraging its insight into the new challenges facing today’s

business world, Sage constantly updates its solutions to ensure

that manufacturing firms can respond to the needs of their

market, their customers and their employees, while finding new

sources of development.”

Isabelle Saint-Martin, ERP Market Manager, Sage Mid-Market

EXPERT PERSPECTIVE

The Internet, social networks, telephones, smartphones and

tablets have become a fixture of everyday life and spawned

a new set of uses that have crept into the workplace. This

phenomenon is accelerating the success of new practices in

companies and the introduction of new-generation tools that

are just as attractive as they are effective.

Drawing on suitable tools and a modernised information sys-

tem, ERPs can put manufacturing firms on the road to growth

and innovation by implementing new solutions, web-based

customer services, mobile workforce devices, new marketing

channels... and many other value-added ways of achieving a

competitive advantage.

Today, the relationship between individual users

and new technologies has changed. 86% of people

believe that new technologies make their life easier.

81% claim that new technologies improve working

conditions (IFOP/Sage, 2012).


January 2013 - 12

Sage has been recognised as an expert in

management solutions for 30 years and is a

long-standing partner to corporations, mid-cap

companies and SMEs, whether independent or

group subsidiaries.

As the world’s number three ERP vendor

(Source: Forrester, The State of ERP in 2011,

May 2011) and the number three management

software vendor in Europe (Source: Truffle 100,

European Software vendors ranking 2011),

Sage ERP X3 helps 204,000 users from 4,000

companies across 60 countries to do business.

Manufacturing firms may have a number

of characteristics in common, but they all

come with a wide variety of profiles, such as

their size, their organisational structure, their

hardware and their IT maturity.

Whatever their profile, manufacturing firms can

count on Sage to power their development

with a broad array of ERPs, software suites and

specialised solutions, as well as a network of

customer-oriented partners with expert industry

knowledge.

Solutions geared towards each company profile

• In response to the strong constraints facing

their sector, SMIs (Small and Medium-Sized

Industries) are looking to leverage an end-

to-end solution that dovetails with their need

for simplicity due to their low IT maturity and

limited manpower.

The challenge with these companies is to

offer a solution that instantly meets their

needs, while boasting a short deployment and

learning curve.

• With a more mature organisational structure

and a more complex set of activities, mid-cap

companies and large SMEs are faced with a

series of strategic challenges. ERPs are the

lifeblood of their information system, and

these companies need to tap into all their

possibilities to support their growth.

• Subject to the same constraints as the

previous two categories, national and

international groups are on the lookout

for flexible end-to-end solutions capable

of representing a solid alternative to their

group ERP for managing their subsidiaries,

controlling their supply chain and sharing

repositories.

Sage, the partner for manufacturing firms


January 2013 - 13

Our customer testimonials

Manufacturer of power supply and current transformer systems

French manufacturing firm specialising in professional electronics

TESTIMONIAL - SLAT POWER SUPPLIES

TESTIMONIAL - ASICA

“

“

“

“

Sage ERP X3 has enabled us to increase production and ultimately double

our revenues, while keeping the same number of people in our support

functions. We have improved our productivity in product development by

25% by automating tasks. Finally, the high level of functional integration -

only accounting and payroll are not included - has created a new driving

force within the company with an array of high-performance tools geared

towards the challenges of today’s world.

André Guinet, Managing Director

Sage ERP X3 has been fully integrated into the company and

guarantees seamless information streams from one department

to another. We have utilised the solution’s automation capabilities

to drastically reduce the time spent on everyday administrative

tasks. Finally, Sage ERP X3 has whipped our production processes

into peak shape and ushered in contracts with new customers

who previously would have refused to work with us, because

our organisational structure was too homespun. It should not be

forgotten that key accounts audit their suppliers. Not only do they

put product quality under the microscope, but they also see whether

you can meet lead-times... They give you a product quality score and

a performance score. Installing Sage ERP X3 is clearly a major asset

that works in our favour and reassures our customers.

Pascal Prenveille, CIO


January 2013 - 14

Our customer testimonials

Expert in mineral extraction and processing (diatomite and perlite)

France’s leading extruder of standard and enhanced thermoplastic plates, sheets and reels

TESTIMONIAL - WORLD MINERALS EUROPE

TESTIMONIAL - GAILLON GROUP

“

“

“

“

We are part of an international group in a specialised business

sector. We need to align with the group’s budgeting, reporting

and consolidation systems. Before, we were simply unable to do

that. With Sage ERP X3, we can fetch and aggregate data from

our various sites with just a single click. This obviously saves

considerable time and gives management access to the information

that it needs to run the company.

Estelle Jacq Leteurtrois, IS Functional Manager

Employees are making intensive use of the new system, because it

provides a wealth of practical information, especially for our logistics

activities. Sage ERP X3 has also improved inventory management

and shaved a substantial 12% off our stock levels. Another major

advantage is that we can now see exactly how much production

is costing, which is prone to wildly fluctuating raw material prices.

Since we use 45 tons of plastics a day in each of our plants, that

information is mission-critical. Furthermore, the information provided

by Sage ERP X3 means that we can easily consolidate accounts

across our three companies and fill in the reporting templates

required by our shareholders.

Régis Béroujon, Extrusion Department Head


January 2013 - 15

Sage ERP X3 in brief

Sage ERP X3 is specially designed for small and medium-sized companies, independent

SMEs and group subsidiaries. The solution gives manufacturing firms a complete response

to all their business needs (sales, production, logistics, services, finance, customer relations,

human resources and management).

Available in 60 countries and supporting a wide range of languages and legislative systems,

Sage ERP X3 can cope with the most complex processes and deployments across multiple

and/or international sites.

Sage ERP X3 builds on the software’s native possibilities and the skills of its ecosystem to

support the specifics of every business with an array of solutions for each sector and industry

(car, food & drink, pharmaceuticals and cosmetics, chemicals, plastics, and much more

besides).

Combining the benefits of an ERP and specialised solutions, Sage ERP X3 is unique with the

ability to extend its scope to encompass expert functions to suit the needs of industry (PLM,

APS, MES, CMMS, WMS and CRM), as well as built-in technical features (decision-support,

workflow, EDM, portals, and so on).

Leveraging the SAFE X3 development and integration platform, Sage ERP X3 features native

support for web technologies, cloud computing and EDI protocols for mobile terminals.

SageValue-added solutions and skills for industry


January 2013 - 16

Call us on0845 485 9800

SageNorth Park Newcastle Upon Tyne, NE13 9AAwww.sage.co.uk

eBook-WP ERP a Strategic Growth Driver for Manufacturing Firms

Documents

Transcript of eBook-WP ERP a Strategic Growth Driver for Manufacturing Firms