Dynamics AX – Meeting Manufacturers Trends and Challenges

Posted on: June 22, 2012 | By: SuperUser Account | Microsoft Dynamics AX/365

I’ll set the stage by quickly reviewing some fundamental and emerging trends and challenges that are impacting manufacturers today. These trends have important consequences for every manufacturing organization striving to run and continuously improve its own unique mix of manufacturing models, across multiple sites and geographies.

Then we’ll take a quick look at the ERP needs these trends have created among manufacturing organizations.

Traditional Challenges
Manufacturing is a mature industry, so today’s leaders are facing some of the same challenges that their predecessors have encountered over the years. These include:

Cost pressures: As companies compete in a global market, they are under constant pressure to reduce end-item manufacturing costs as well as plant operating costs. This requires streamlining processes and increasing production efficiency. There is a continued need for insight into cost drivers of the operations.

Time to market: Getting products to market faster than your competition gives you a competitive advantage. Reduction in product life cycles caused by technology innovation and changes in consumer behavior force organization to focus on reducing time-to-market of products. This requires a good insight into and grip operations.

Product quality: It is no longer acceptable to deliver defective products. Not only does it damage your reputation but warranty and liability costs can quickly escalate to eliminate all profits.

Inventory visibility: The costs of inventory are on the rise due to increasing product assortments, shorter product life cycles, and the importance of a healthy cashflow. The visibility into inventory across distributed organizations remains a challenge and continues to challenge the organization’s grip on inventory.

A world-class software solution should help manufacturers address these traditional challenges – but it needs to do more: it must also help them identify and respond to recently emerging challenges.

On top of the traditional challenges, new challenges face the manufacturing industries.

Recent and Rapidly Emerging Trends and Challenges

Technology is a key catalyst for success in the manufacturing industry. It can empower people and help transform businesses in multiple ways.

While manufacturers face countless emerging challenges, the most important ones are:

Contract manufacturing: As a result of cost pressures many manufacturing organizations specialized in specific functions instead of actually executing end-to-end manufacturing, and outsourced non-core manufacturing activities. This results in networks of organizations that work together to produce goods under the orchestration of a supply chain leader. Efficient manufacturing depends on having a well managed set of global suppliers that can deliver critical sub-assemblies on time and on budget.

Real time information management: The ability to know where you are with production levels, production efficiencies, production-line parameters, staffing, warehouse levels, etc. across your global organization can make the difference between profitable operations and losing money.

Green manufacturing and compliance: Local and regional requirements for sustainability and green manufacturing as well as changing consumer demands are putting increased pressure on manufacturers.

Globalization: This includes managing a diverse workforce, a global supplier base, and a global customer base. Outsourcing to low-cost specialists, consolidation in the industry, and one world marketplace are examples that manufacturing organizations need to deal with.

Others trends and challenges include:

New marketing and sales challenges, such as changing customer expectations, digital marketing, customer acquisition and retention, and emerging competitors.
Evolving business structures, driven by distributed workforces, acquisitions and mergers.
The increasingly digital enterprise, which complicates a variety of issues including device proliferation, privacy, security and risk management, collaboration, mobility, and the multigenerational workforce.
Management issues such as business process improvement, workforce productivity, employee recruitment and retention, efficiency improvement, dealing with new regulations, and the accelerating pace of innovation.
Organizations that outperform the market, facing these challenges, have a few things in common.

These organizations have good insight and grip on their operations across their global organization. They are able to utilize this insight and rapidly introduce new and successful products in the market place. At the same time build a sustainable business that is supported by a global network of partners. IT is a critical part of this!

If these issues sound familiar, you’re not alone. Manufacturers everywhere are facing a complex set of traditional and rapidly emerging challenges.

What tools are available to help meet and overcome these challenges?

Organizations need new systems that will work for them—not against them! Here are our thoughts on what today’s manufacturer needs are:

Business applications that are an asset in the face of change, not a liability. Integrated, easy-to-use applications.
Simplicity and agility without a sacrifice of power. Familiar, intuitive user experiences, shared data that reduces/eliminates duplicated data structures.
Complete, manufacturing-specific solutions, not inflexible software that requires expensive customization. No more spaghetti code, no more cumbersome, costly middleware.
Powerful embedded analytics and business intelligence, not data overload. Business Intelligence moves front and center, no longer an afterthought.
Microsoft Dynamics AX 2012 meets these needs by introducing a generation shift in the way we think about the ERP model.

For additional information please feel free to reach out to us at info@loganconsulting.com or (312) 345-8817.

All the best!

Logan Consulting

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