We live in a world of digital disruption, where whole industries (hotels, media, taxis) have been transformed. We’ve seen technological capabilities forever change customer expectations and topple assumptions about how they work. In this age of change, what matters most for organizations is their ability to adapt quickly to meet evolving demands. Call it adaptability, flexibility or agility, but your organization must be ready to change quickly.
The right ERP system offers you a platform for agility, allowing you to go where your company and customers want to go. Agility isn’t an accident: it should be baked into all you do, enabling you to integrate flexibility into your entire business.
Agility And Your Value Proposition
New digital technologies and changing business models are profoundly impacting the value proposition (VP) you offer to your customers. And VP is measured from the customer’s point-of-view. As TechTarget defines it, “a value proposition should be simple and easy to remember. It should emphasize both the benefits the customer will receive and the price the customer will be charged as compared to the competition.” Clearly, the more benefits you provide your customers, the more differentiated those benefits are from those offered by your competitors, and the less you can charge customers for those benefits, the better your value proposition becomes.
The right ERP system increases your capacity to deliver higher quality offerings to your customers
Your business can offer a better value proposition through embracing digital transformation and agility, by adopting technology that enables agility. Put simply, the right ERP system increases your capacity to deliver higher quality offerings to your customers (and do it faster); it will be an agile platform allowing your business to make necessary changes quickly as market and customer expectations evolve.
That you’ll need to adapt is clear, but the direction of the change will depend upon many factors, including the industry segment you’re in (some move faster than others and in different directions), the expectations of your customers, and the possibilities created by emerging technologies, from 3D printing to IoT and beyond. If you’re caught flat-footed, you’ll fall behind your competitors quickly.
Different Manufacturers, Different Ways to Be Agile
Which digital technologies are most affecting mid-size manufacturers, and how are those technologies impacting the value proposition? It’s a big question. There isn’t a one-size-fits-all answer. Manufacturing firms compete in different market segments and in multiple dimension, finding ways to create value on price, personalized service, product innovation, efficiency, and more.
A custom manufacturer, for instance, might place more emphasis on personalized service, while an automotive parts manufacturer might prioritize the efficiency of their production process.
What’s true for all segments? Businesses that don’t embrace new technologies quickly enough, who are stuck in their traditional ways of doing things, or who don’t select the right technologies to invest in, will fail. And that failure will be revealed quickly in today’s fast-paced and unforgiving business landscape. Your customers have access to almost infinite information, they have a range of choices, and they’re constantly looking for the best available value proposition. If you don’t offer it, they’ll go elsewhere.
A Brief Example: Electronic Manufacturers
Let’s look at just one manufacturing segment, electronic manufacturers, to understand where and how agility is necessary, and how the right ERP might help support it.
With so many players in this market, electronic manufacturers need to deliver operational excellence, speed, and optimized costs. So, for instance, they need a real-time understanding of their procurement needs to allow them to forecast what, how much, and when they need to purchase. If they buy too little, production will freeze up. They’ll also pay more as they scramble to find supply on the spot. If they buy too much, their cash flow dries up and they’re paying for the storage of unused parts. Having the right ERP in place offers transparency about procurement needs and enables accurate forecasting that optimally calibrates demand and supply.
Think of agility as the how and the value proposition as the what.
Product innovation is another key area for electronics manufacturers. As a prior abas blog post explains, “when an engineering change order is handed down from on high, businesses must adapt to improve their offerings, ensure ongoing operational excellence, or debug issues they've discovered.” That takes agility and good version control, which requires an ERP that allows easy access to historical documentation, seamless collaboration in real time, and more. An ERP system like abas ERP, which includes Production Planning and Control as well as CAD integration, can be just the platform electronic manufacturers need to enable agility in the face of new requirements
How Agility and Value Proposition Connect
Your value proposition is what your customers receive, and they don’t necessarily care about how you leverage your internal processes and systems to deliver it. But in order to deliver the VP your customers want, you need to align your people, processes, and systems in an agile and dynamic way, because you’re aiming at a moving target of customer/market demands. Think of agility as the how and VP as the what (the outcome).
The Business Dictionary defines “organizational agility” as “the capability of a company to rapidly change or adapt in response to changes in the market . . . agility can help a company to react successfully to the emergence of new competitors, the development of new industry-changing technologies, or sudden shifts in overall market conditions.” Developing agility takes investment in systems like abas ERP, and it leads to a better value proposition for your customer.
abas Cloud ERP Supports Agility
An Olympic weightlifter may be strong, but not agile. As a manufacturer, you need to be both. Let’s look at how cloud ERP makes you strong and agile enough to support your VP:
- Less hardware infrastructure reduces cost. Since resources are off site, and you use only what you need based on a SaaS/subscription model, you won’t need to pay for expensive hardware. Pay only for what you use, and scale up seamlessly as your needs do. You can instead focus your attention and cash flow on growing your core business.
- Use it anywhere, anytime, from any device. With cloud ERP, users can securely access what they need from their phones, tablets or laptops, at any time and from multiple locations (the shop floor, during a sales call, when on the road, or even from the comfort of a cafe or living room couch). Like your customers, you’re always online, accessible, and ready to do what you need to do.
- Easier system upgrades, managed by experts. Again, a cloud-based ERP gets maintained remotely by experts who are constantly monitoring and improving the system. You don’t have to worry about adapting to the next big technological/software change, because it’s done for you, allowing you to focus on core business functions and enhancing your VP.
The three factors described above, and several more (see 8 Ways Cloud ERP Makes Your Manufacturing Business More Competitive), add up to the single most important reason to choose a Cloud ERP Solution: it enables manufacturers, from whatever segment, to be more agile in a landscape of fast-moving change. That spells competitive advantage and allows you to deliver a value proposition that will keep your customers coming back for more.