Managing Digital Change in Manufacturing

David Morley, VP Manufacturing Practice at Gerent LLC

M&As in the Horizon

Manufacturing is about to see a large increase in mergers and acquisitions. Q3 saw the start of a rise in activity as businesses looking to grow through acquisitions of strategic targets with low liquidity. This should be followed by a bigger increase in deal activity for Private Equity deals post-election.

Regardless of the deal type, size, and strategic fit, poor integration can kill the best deal. The inability to communicate and report progress efficiently is important. Manufacturing, in particular, has struggled with the effective integration of acquisitions. A lot of manufacturing  businesses have not kept up with technology, data exists but in many formats, and the fear of changing and upsetting the way it is now can be overwhelming.

Digital as a Solution

The truth is there is no silver bullet. Technology has moved faster than adoption has taken place in the manufacturing vertical, making good acquisition targets unattractive, in some cases lowering the offers or resulting in no offers, as buyers view technology upgrades as expensive and problematic.

Quick start solutions can be utilized in some cases but without talented discovery work on the front end, it’s likely to be unsuccessful. The biggest issue with poorly implemented change can be team adoption and the value of the output is unusable.

If the current ERP system or systems function, there exists a wealth of data that is growing daily. With the correct approach, this data can be collected and analyzed in real-time to provide high-value cross-functional reporting, dashboards, and insights.

Looking into the costs of standing still versus selecting the correct approach to data and digital analytics is easy to define. Real-time analytics empowers better decision making and actions around executing the plan and reacting to market conditions. Through the Pandemic, you can find examples of publicly traded businesses that are growing against market conditions. You can also find examples of companies in areas of the market that are thriving, fail to take advantage. With little research, it is possible to conclude which companies were able and agile enough to pivot and react and others that simply could not react and are relying on liquidity to survive until conditions improve.

Digital as a Strategy

Change does not happen overnight but it is possible to build a digital strategy that is effective and matures over time, with key milestones along the journey recognizing the value to each business and prioritizing goals. Without an end goal and strategy, you are just creating the potential for a whole solution down the line. Having a clear vision and strategy for the business and investing in data cleansing is a great starting point for the leadership team. Making the goals smart and measurable; understanding the interconnectivity of goals is also important.

For example, having a goal to reduce inventory is a measurable set of data. Does this tie into the sales forecast of demand? Will the supply chain react with pricing? And can operations process orders faster if materials are not on the shelf? Without solid data and analysis, it is almost impossible to imagine that the customer experience will be diminished, creating more downside than reducing capital in inventory.

The Salesforce platform is a solution with the ability to integrate with multiple inputs that can deliver common reporting. Companies that adopt the Salesforce platform can more easily integrate and divest business units without big disturbances to existing systems.

The key to change in this environment beyond selecting the right Salesforce partner are:

● Management support

● Training the team

● User adoption

● Building a system of value

The benefits are huge from a business perspective, having information and insights from Sales Operations, Supply Chain, and Finance.

Call Gerent LLC today and set up a call with our manufacturing team. We can quickly evaluate your individual needs and start working toward your digital solution.

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