The Changing Face of ERP Solutions

Something strange is happening to companies across the U.S. They’re being infiltrated by new ideas about what devices they should be using, what their software should be capable of, and how their employees should be working.

As a new generation of workers, raised in a high-tech environment, is joining the workforce, they’re bringing their iPods, Androids and other gadgets and expecting programs they use at work to function on those devices. This is a serious challenge for IT staff. How do you get highly specialized programs (like enterprise resource planning systems) to work across the board on different devices?

Derek Singleton, an ERP Market Analyst for Software Advice, found the answers to this and several other questions in an interview with an ERP expert in the article “The Consumerization of ERP Software.” I’ll discuss the highlights of that video and offer my own perspective on them.

A Hodgepodge of Hardware

There’s quite a dichotomy in technology today with many people fiercely loyal to a particular browser, operating system and mobile device, and they absolutely hate it if they’re forced to use something they’re not familiar with at work. Increasingly, employers are doing their best to accommodate employees’ preferences when possible. The trouble is that having a big jumble of products and operating systems makes it difficult to standardize processes and software. New solutions need to be able to work across several systems.

Making It Work

The very definition of what an ERP is evolving. Many employees who are used to communicating through social media or who want to use the same format they’re used to using in another program are demanding that these things be added to an existing ERP system. All of this customization is taxing IT resources and abilities. It’s also leading to new opportunities for companies to innovate and come up with new ERP solutions that are even more useful to companies.

Is There an App for That?

People who perform specialized tasks in accounting software, inventory management systems, etc. are asking their companies to provide specialized apps in their ERPs. This makes their lives easier and it can increase their efficiency. However, companies need to weigh the costs and benefits of upgrading their ERPs and providing these new apps.

As ERPs continue to change in order to meet the demands of companies and hardware, you can bet we’ll see a lot of surprising developments. Keep an eye out for them!

Infographic: U.S. Manufacturing Grows for 32 Straight Months

For nearly three years, America’s manufacturing industry has enjoyed steady growth. Despite international economic uncertainties and all the domestic challenges that seem to keep popping up, manufacturing remains the poster child of the recovery. Whether you run a manufacturing company, need a job, or just want to hear good news for a change, you’re in for a treat with this in-depth infographic on the current state of the manufacturing industry:

Learn more about Fishbowl’s Manufacturing Software.

What Is Apple’s Inventory Management Secret?

How did Apple become a $600 billion company? It’s not just by having hot products and constantly innovating. It’s something much more basic – something every company should strive for.

It has the best inventory management in the world. That’s right. Better than Dell, Hewlett-Packard and other technology companies that have been synonymous with top inventory management in the past.

Impressive Numbers

According to a Motley Fool article, Apple averages just 5.3 days worth of inventory on hand at any given time. That’s almost half of the closest company Dell’s 10.2. What this means is that every five days, Apple needs to replenish its inventory to prevent stockouts. Apple is able to pull of this incredible logistical feat because it has invested so heavily in its supply chains and inventory management.

Losing Value Fast

Why is it so important to keep as little inventory on hand as possible? Because it costs companies money every day they store products in their warehouses. Not only that, but with technology always improving, high-tech manufacturers can’t afford to keep too many products in stock because a sudden announcement from a competitor or a new innovation could change everything and suddenly bring down the value of their products. It’s important to remain flexible.

Apple’s Secret Sauce

The secret to Apple’s success is their obsessive control over their inventory. They’ve discovered that the best way to control costs and meet their customers’ needs is to find the right balance of inventory in locations across the country and the world.

Few companies reach Apple’s size and complexity. They have to manage thousands of locations and supply chains. You probably only have to worry about a fraction of that number. Even though you’re smaller, you can see just as many benefits to your business as Apple enjoys by using inventory management to your advantage. Get started by finding solid inventory management software.

Who knows – maybe you’ve got an idea that can make your business the next Apple. To get there you just need the right focus and the right inventory management tools.

New iPad Tests Manufacturers’ Flexibility

To wait or not to wait. That is the question for many manufacturers that are eager to profit off product accessories. Jumping the gun is dangerous for any business, but so is acting too slowly.

Risks and Rewards for iPad Case Manufacturers

For example, manufacturers of iPad cases aren’t given any advanced warning about the timing of a new iPad release or the new dimensions and button placements they have to work with. But some manufacturers hope to get a big advantage over their competition by making an educated guess weeks before the official announcement comes from Apple. If they’re wrong even by a couple of millimeters, they could wind up with a lot of unsellable products. But if they’re right, they’ll be in a perfect position to sell their cases on Day 1 of the new iPad’s release.

Other manufacturers are more cautious. They wait until they are able to purchase a new iPad and redesign their case to fit it exactly. However, waiting has its own risks. Manufacturers who delay will likely miss out on a lot of initial buyers who want to get an iPad case right when they buy the new device. They need to act quickly to make up for this handicap and get their cases in stores. Despite these disadvantages, this strategy could help these manufacturers in the long run because they could earn a reputation for high quality and craftsmanship while other brands are mainly trying to be faster.

Which Strategy Is Better?

So which of these manufacturers is using the smarter strategy? On the one hand, the greater the risk, the greater the reward. On the other hand, slow and steady wins the race. No matter how good you are at guessing, you’re bound to make mistakes from time to time. And those mistakes could cost a lot of money and time.

Probably a more reliable business strategy is to be flexible enough to jump on opportunities when you have all the facts you need. If you can get that information before your competitors, then more power to you. You can still use intuition, but you need to temper it with facts. Businesses often enjoy long-lasting success by finding a happy balance between these two things.

The Tortoise and the Hare

It comes down to Aesop’s old fable “The Tortoise and the Hare.” If you want to be more like the Tortoise (steady and successful) and less like the Hare (fast but sporadic), you should definitely use manufacturing inventory software. With this software, you’ll be able to speed up your production lines and make sure that when you make a design decision, you can put it into production quickly. Learn more by clicking the link above.

Manufacturing Inventory Software Pays Off for U.S. Producers

Manufacturers who wisely invested in manufacturing inventory software over the past few years are being generously rewarded for their foresight. As the economy recovers, these manufacturers are poised to take advantage of growth opportunities because they’ve slashed costs without hampering their production capabilities.

Ready for the Recovery

There are several signs that the manufacturing industry is really picking up, such as the amount of non-defense equipment increasing 2.9 percent in December after two straight months of declines, according to the Wall Street Journal article “U.S. Market Shines Brighter.” Plus, engine makers, construction firms and equipment rental companies are getting a higher number of orders than usual.

These companies are gearing up for action, thanks to their smart planning. “After keeping a tight lid on costs for the past few years, many other companies are expanding capacity to meet rising demand,” the article notes.

Competitive Advantages

The big test for manufacturers during the recession was to keep costs down while retaining valuable employees and equipment. Many manufacturers used manufacturing inventory software to save money by bringing their inventory levels way down and streamlining production processes with automatic work orders, bills of material and more.

Now that demand is beginning to pick up, these manufacturers have the tools to produce goods faster and to make sure they always have the right amount of inventory to meet demand. These are big competitive advantages.

Good News, Bad News

As it becomes less cost-effective to produce the majority of their goods in cheap-labor countries like China, manufacturers are changing their strategy. Instead of bringing all the jobs back to the United States, many are simply using their manufacturing plants in China to make goods that will be sold to the Chinese while using their American plants to make goods to sell to Americans. This saves on transportation costs and avoids the trouble of relocating workers and building new facilities.

The good news is this means some jobs are coming back to America, but the bad news is others are permanently gone. Hopefully workers in the manufacturing will continue to adapt to these changing conditions and thrive in a more high-tech environment that demands new skills. If companies can do it with new technology, people certainly can with more education and job skills.

Make sure your manufacturing company can take advantage of the economic recovery by using manufacturing inventory software. Sign up for a free inventory software demo today.

Low Inventories Are a Boon for Manufacturers

You might ask how I can say that low inventory levels at retailers and other businesses is a good thing for manufacturers. Isn’t the fact that companies have smaller inventories than usual a bad thing for manufacturers, who depend on new orders to keep money flowing into their pockets?

In the short term, sure, it sounds like a bad thing. But over time it actually leads to better results for manufacturers for several reasons:

1. Because companies have lower-than-normal inventories, they have to place larger-than-normal orders to replenish them quickly.

2. Holiday sales were stronger than expected in 2011, which partly explains why inventories are so low right now. Retailers didn’t have enough products to meet demand. This bodes well for consumer spending in the future.

3. Retailers’ oscillating inventory levels could inspire them to invest in retail inventory software to help them stabilize their inventories and keep the right amount of products on hand at all times. This will, in turn, help manufacturers avoid the feasts and famines that punctuate poor inventory management.

I hope that explains how a seemingly negative thing can actually be extremely positive.

As a little aside, according to a Bloomberg article, manufacturing orders fell 1.2 percent in November 2011, which is a good indicator that they’ll recover in early 2012. Tax incentives encouraged companies to make a lot of purchases early in 2011, so that might hurt sales in 2012 a little.

Manufacturing Technology Orders Nearly Double in 2011

This is the last blog post I’ll publish on the QuickBooks Manufacturing Blog in 2011. It’s been an amazing year, full of ups and downs, and 2012 will probably be an even wilder ride. I’ll end this year on a high note, and I’ll let you know what you can do to prepare for whatever lies ahead.

What Manufacturing Technology Is

I recently read in a Quality Magazine article that manufacturing technology orders have grown immensely over the past year. They were up 80.5 percent in October compared to 2010, reaching $4.53 billion.

You might be wondering what “manufacturing technology” is. I wondered the same thing when I first read this article, so I’ll just take a minute to define it so we’re on the same page. Manufacturing technology is anything that helps the manufacturing process run smoothly. It’s not the actual products that a manufacturer builds; it’s made up of supporting hardware (like drills, wheels and other tools) and software (like automated systems and manufacturing inventory software).

What It Means

This huge increase in spending on manufacturing technology is a good sign for the future of the manufacturing industry. It means manufacturers recognize that they need to be more efficient if they want to stay competitive.

Of course, I should note that companies have a strong tax incentive to purchase new technology for their operations before the end of the year. So these decisions to buy are probably based not just on a long-term perspective, but a short-term gain, as well. This will likely lead to slower sales in early 2012, as the article notes. But still, the end result is manufacturers have more advanced tools they need to overcome challenges and be more profitable.

What’s Most Important

While it’s essential to get tools to help in your business, the most important manufacturing technology that you should invest in is manufacturing inventory software. It can help you coordinate your production processes, balance your inventory levels, lower costs, and much more. Find out all of the ways this software can help your business by clicking the link above.

And have a happy New Year!