As I shared in a previous post, the Ultra team is in the midst of partnering with a US-based metals component supplier.
The manufacturer operates 10 facilities strategically located near their customers, serving steel service centers, automotive and truck, construction and agricultural equipment, machinery and appliance OEMs.
Through the partnership, we’ve uncovered both the business issues commonly faced by many metal component manufacturers and suppliers, as well as key trends that now shape this sector.
This post is a continuation of the series, and shines the spotlight on trends faced by the metals fabrication industry.
About the ERP Project
To recap, one of the main goals of the ERP project is for the company to better track and manage operations at each of their 10 facilities in North America, as detailed in my previous post about ERP selection in the metals manufacturing sector.
The fabricator undergoes many work-arounds and wasted effort to coordinate and manage operations throughout the ten geographically dispersed manufacturing facilities. It’s difficult to generate real-time reporting, consolidated financials and other aggregated metrics
The company also seeks to reduce the use of standalone spreadsheets, and to better manage version control while standardizing on one ERP system throughout the enterprise.
An Overview of Metal Manufacturing Trends
Many industry reports have taken a close look at trends facing metalformers and others. Most experts agree: advanced technology and automation will keep this business sector strong overall and growing
Through our work with this supplier, we discovered the following trends that have played a specific role in their search for a more advanced and robust ERP solution.
- Rapid globalization via emerging markets: It is becoming increasingly important for metals manufacturers to truly integrate operational performance planning in order to meet the demands of the global market place. That’s why the cloud-based model is increasingly attractive to subsidiaries and service centers.
- Volatile raw materials and energy prices: The volatility of raw materials and energy pricing is expected to continue in the years ahead. To that end, commodity trading and risk management are all deserving of a close look by metal manufacturing leadership. We’ve noted before the importance of change management in various sectors. The concepts of change management are increasingly critical to the enterprise to manage operational risk management.
- Rising transportation & supply chain cost: Manufacturers use one third of all energy consumed in the United States. Rising energy costs can have a devastating impact. In addition, higher transportation costs throughout the supply chain significantly increase the costs of moving raw materials and getting goods to market. These trends make streamlined transportation and logistics management even more critical to overall business performance.
- Mobilizing the enterprise: Consumer-style mobile productivity apps are the expected norm for connection via any employee/customer smart phone. The metals manufacturing sector is not alone in their quest for enterprise operations-focused mobility and analytical applications. ERP mobility will be a continuing trend of importance. The quality manager, shop floor worker, shipping personnel and other staff will seek convenient access via their mobile devices to monitor what’s happening in real time throughout the entire enterprise.
A Strategic Response
Based on these trends and others, it is clear that there is growing interest for metal manufacturers to use and ERP implementation project as a way to undergo strategic business process reengineering.
These trends helped to influence the leadership team to begin the ERP selection project.
After noting these trends, and identifying specific business drivers, our next activity was to undergo a thorough business mapping process.
Watch for continued blog posts that will showcase further details of this project, which continues at the metal fabricator.