This is inevitable with the “ebb and flow” that comes with the cyclical nature of manufacturing. We’ve been working with a mid-market manufacturer who has run into a downturn in their business activity.
Even as the Institute for Supply Chain Management reports that the U.S. manufacturing sector expanded last month at its fastest pace in almost 2-1/2 years, many companies grapple with uneven customer demand, material cost increases, uncertainty stemming from the recent government shut-down and other challenges that lead to less than optimistic business forecasts.
Our team understands the cyclic challenges of a rapidly changing economy. Yet we also see the advantages of a continued focus on business process improvement (BPI) to become more modern and efficient while providing better quality products to customers.
Staying the Course
Even when business is in a downturn, we suggest companies stay the course with BPI as that often times allows business to recover more quickly as efficiencies are put into practice.
This suggestion points to Ultra’s best practice sequence of conducting BPI before ERP and then following on with Business Intelligence to drive the business to new levels of performance with robust and accurate data, forecasts, and process controls.
With a downturn in business forecast, it certainly is true that an investment in ERP technology can be daunting. However, a small investment in BPI as a prerequisite approach should be seen as a priority investment to get a company’s current state “house in order” and drive efficiencies and cost savings before embarking on ERP.
Numerous case studies and Ultra’s experience shows that the best time to invest in process BPI and business process reengineering is when business is down and the priorities are high to drive efficiencies into the business. By streamlining steps in key business processes, companies’ drive down the time it takes to complete the process, reduce risk and save on costs.
A Confident Business Case
Ultra’s BPI methodology is placed before ERP selection for this very purpose – clean up the current state, implement process improvements, and deliver a confident business case that justifies moving forward with ERP.
This approach ensures that when business comes back, the operational efficiency can be already positioned at a new level of performance which will reduce the need for adding resources to handle the incremental demand.
Further to that point, Ultra’s manufacturing clients consistently report that the tangible benefits in Ultra BPI services far outweigh the costs several times over and are realized in a short period of time (typically a matter of days/weeks).
With these factors in mind, and as independent ERP consultants with decades of specific experience in this sector, we encourage our clients to stay engaged in BPI to drive efficiencies into the business and continue the progress until the forecast improves.