Aptean Industrial Manufacturing ERP eBook: How to Propel Growth by Reducing Your Business Costs

How to Propel Growth by Reducing Your Business Costs

Converting Optimism into Growth

Industrial manufacturers are feeling cautiously optimistic.

A new Aptean research study of 150 industrial manufacturers in North America, conducted by B2B International, has revealed a sector growing in confidence but concerned about external challenges.

In this turbulent economy it’s great to see that 87% of those surveyed predict revenue growth in 2023. However, rising business costs are making it harder to convert those sales increases into profit increases.

In response, Aptean has created this guide outlining how industrial manufacturers can help reduce costs to maximize profit and propel growth.

Useful Insights:

› Annual revenue is growing faster among industrial manufacturers using cloud-based software than on-premise software.

› Manufacturers are using automation to mitigate the financial impact of labor shortages and reskilling employees for the digital environment.

› Sustainability programs are driving cost savings as well as helping manufacturers progress towards their environmental targets.

Propel Growth By… Optimizing Your Supply Chain

Industrial manufacturers often find themselves in the middle of the supply chain, which creates the risk of revenue loss at both ends. It’s understandable why three in 10 manufacturers say supply chain disruption is their biggest concern.

Supply chain optimization through data visibility is your starting point to reduce the cost of doing business.

For example: it’s hard to get the best material prices when you’re trying to cross-reference emails and spreadsheets. A single view of vendor data will enable your organization to easily compare quotes and negotiate prices.

In addition, connecting vendor insights with your production schedule will allow you to set more realistic customer deadlines. With accurate insights, you can deliver on your promises and build the kind of reputation that drives repeat business.

3 in 10 industrial manufacturers say supply chain disruption is their biggest challenge.

Enhancing Supply Chain Visibility Using ERP Software

Digital transformation is empowering industrial manufacturers to enhance supply chain visibility and make cost-effective decisions. Over half (52%) of the companies surveyed have already either mostly or completely automated their supply chain management.

Enterprise Resource Planning (ERP) software optimizes supply chain operations and streamlines communications to both vendors and customers. With an industry-specific ERP solution, your organization can:

› Respond quicker to material delivery changes – for example, sourcing from an alternative vendor or changing your production schedule

› Align material planning and purchase order creation with inventory and lot tracking, so you can acquire sufficient materials in response to spikes in demand

› Send customers real-time status updates, informing them of any changes

› Easily manage supplier line cards for all your purchased components

Aptean Industrial Manufacturing ERP automates material planning and purchase order creation to enhance supply chain transactions. Aptean customers can use perpetual inventory and lot tracking data to report on vendor costs and purchase price variances, to help them understand the true costs of materials and negotiate the best price.

Using Aptean Industrial Manufacturing ERP to increase data volume, accuracy and timeliness has enabled Boston Centerless to improve on-time delivery rates from 88% to 98%.

Propel Growth By… Improving Inventory Management

While supply chain optimization can help manufacturers negotiate competitive prices, there are other upstream challenges that affect the cost of doing business. A third (31%) of manufacturers surveyed told Aptean that they struggle to align material availability with production demands, which can lead to holding more inventory than they need or falling short of being able to fulfill orders.

Improving inventory management will enable your organization to minimize safety stock. Managed accurately, running lean should never lead to running out.

30% of industrial manufacturers admit to problems with maintaining inventory levels. Synchronizing availability with production planning is essential to run a cost-efficient operation while minimizing risk.

From an inventory perspective, accurate information ensures your organization schedules work when it has the right parts available. Real-time material availability data also helps customer-facing staff make achievable promises.

From a production perspective, dynamic scheduling also allows you to factor-in inventory changes and material and resource constraints. If a particular component is out of stock, you can prioritize another job to maintain the flow of work.

A third of manufacturers struggle to align material availability and production demands.

Improve Inventory Management with ERP Technology

Investing in or upgrading your ERP software can enhance both supply chain operations and inventory management. 48% of industrial manufacturing companies have already invested in ERP technology to deliver these types of efficiencies.

An industry-specific ERP delivers integrated planning capabilities, so your priorities can be adjusted based on realtime inventory data.

For example, with Aptean Industrial Manufacturing ERP, your organization can:

› Automate material planning and purchase order creation to meet the varying needs of your customers

› Use perpetual inventory and lot tracking to link the serial number of an assembly to the serial/lot number of purchased components and raw materials

› Build dynamic production schedules that are easily modified based on constraints such as customer demand and the availability of machines, labor and tooling

Set confident customer deadlines using the ‘capable to promise’ function within Aptean ERP’s Shop Floor Manager Module—and if the order is late, use the ‘why late’ function to drill down and fix possible process issues

Tek Pak increased its inventory accuracy by 75% using Aptean Industrial Manufacturing ERP, resulting in fewer shortages.

Propel Growth By… Automating More of Your Production

Recruitment is a major challenge for industrial manufacturers. Deloitte predicts a labor shortage of more than two million manufacturing workers by 2030, and 33% of the industrial manufacturers Aptean surveyed said that skills shortages are their biggest current issue.

Digital transformation provides an opportunity to offset labor and skills shortages by replacing manual tasks with automated workflows.

While technology is considered a significant business expenditure, the right solution can grow with your organization to deliver value over many years. For example, industrial manufacturers using an industry-specific ERP solution experienced an average of 10.2% year-on-year revenue growth in 2022, compared to only 6.9% among manufacturers that did not invest in ERP technology.

Automating more processes can also help your existing employees to work more efficiently, as you eliminate manual handoffs. Faster workflows increase output, and smoother processes make work more satisfying for your valued team members.

Plus, with more time on their hands, you can train employees in other business areas to reduce skills gaps.

A third of industrial manufacturers say skills shortages are their biggest issue, while 3 in 10 are currently short-staffed.

Increase Automation with Industrial Manufacturing ERP

ERP software drives automation for manufacturing companies as it maintains all production data in a central location. Responsibilities are automatically moved from one team to the next once the previous action is complete, promoting productivity.

Automation also enables manufacturers to automate repetitive tasks to rely less on manual labor. For example, using ERP software to monitor inventory, automate orders when levels are running low and create purchase orders for those parts.

Aptean’s research also showed that digital transformation is enabling industrial manufacturers to explore multiple options for addressing labor and skills shortages.

Aptean Industrial Manufacturing ERP has advanced workflow capabilities that can help your company prioritize, simplify and automate tasks. Its Shop Floor Manager module provides real-time visibility into resourcing, which can be used in production schedules to help prevent over-promising.

In addition, Aptean ERP is a cloud-based solution, so staff are not tethered to a particular workstation in order to use it.

There are growth-driving benefits too: Aptean research has found that industrial manufacturers using cloud ERP technology increased their annual revenue by 7.7% in 2022 on average, compared to 5.1% among manufacturers using on-premise software.

Industrial manufacturers using

software generate higher annual revenue than those using on-premise solutions.

Night and Day: The Metalworking Group’s Story

Let’s look at an example of the benefits ERP software can deliver for industrial manufacturers.

The Metalworking Group (MWG) is a full-scale design and metal manufacturer. At any given time, it typically has 2,500 open custom-made component orders.

Initially, MWG used a combination of excel-based processes and a legacy system for inventory management, shop floor planning and scheduling. But it needed greater visibility and more efficient processes to meet its customer demands.

MWG invested in Aptean Industrial Manufacturing ERP, which delivered dramatic operational improvements in a short space of time. Within 12 months of going live with the solution, the manufacturer had:

› Increased revenue four-fold

› Improved on-time delivery from 75% to 86%

Read

The Metalworking Group’s story in full.

“From where we were before Aptean to where we are now, it’s night and day. Aptean Industrial Manufacturing ERP has enabled our growth as a business.”

Doug Watts, CEO, Metalworking Group

Propel Growth By… Maximizing Machinery Performance

Beyond process and people optimization, there are other, less frequently discussed costs that can increase the cost of doing business. One of these is equipment performance.

The best-optimized schedule will not help if your equipment is underperforming. To maximize production, machinery uptime must be a key business metric.

Prevention is better than cure when it comes to asset management. Yet Aptean research found that a quarter (23%) of industrial manufacturers find machinery downtime a huge challenge.

Maintenance teams need prioritized equipment inspection schedules to help ensure production flows continuously. This is hard to achieve with a manually run maintenance operation.

Digitizing asset management can help maximize throughput. For example, you can schedule asset downtime for maintenance and repairs at a time that works best for your production schedule.

1 in 4 manufacturers are challenged by equipment downtime.

Maximizing Machinery Performance with ERP and EAM

ERP software can help your organization to maintain production by managing schedules based on the availability of machines, labor and tooling. However, adding the power of another solution can deliver even greater value.

Enterprise Asset Management (EAM) technology helps companies manage the maintenance of essential equipment. Four in 10 industrial manufacturers are already using EAM software to improve asset performance.

Investing in an EAM solution will help enable your organization to:

› Centralize work orders and allocate tasks based on available maintenance resources

› Provide digital documentation and checklists for standardized working processes

› Perform proactive inspections to reduce unplanned downtime

› Implement preventative maintenance plans

› Manage spare parts inventory to prevent stock outs

Each of these capabilities can help reduce maintenance costs and extend the lifetime of your equipment.

Aptean EAM can be the solution to help you improve asset performance and streamline work order management.

Investing in Aptean EAM will give your technicians the time and information needed to perform proactive inspections and take preventative measures.

4 in 10 manufacturers are already using EAM software.

“Aptean EAM is giving us visibility into our maintenance operations, which saves time and provides the data we need to implement changes. It helps us to focus on the right things.”

Adam Hervey, Head of Maintenance, Anderson Dahlen

Propel Growth By…

Streamlining Order Fulfillment and Distribution

Manufacturers are facing some major economic headwinds when fulfilling customer orders, with rising fuel prices inflating delivery costs.

Streamlining distribution could enable your business to reduce logistic costs and lower your carbon footprint. This is important, as a quarter of industrial manufacturers say sustainability is one of their top focuses in 2023.

Intelligent shipping is the first step towards decreasing your fulfillment costs. Connecting orders from all your trading partners and channels into a single platform will enable you to consolidate orders and reduce your freight costs.

Automated route planning is the second step to making order fulfillment more cost-effective. Better route optimization maximizes vehicle usage, increases jobs per vehicle and reduces miles per drop, reducing your fuel consumption and managing overall fleet wear and tear.

Sustainability is a priority goal for 27% of surveyed industrial manufacturers.

Enhancing Distribution with Shipping and Routing Solutions

When it comes to reducing the cost of fulfillment, there are two critical pieces of software for industrial manufacturers to explore.

The first is an integrated shipping solution like Aptean Ship.

Aptean Ship calculates costs to find the cheapest, most efficient shipping options. The software auto-selects the optimal service based on your custom parameters—so you can shop rates by carrier, mode, or by both.

The second piece of software is a route optimization solution like Aptean Routing & Scheduling.

For manufacturers with their own fleets, Aptean Routing & Scheduling continuously optimizes conditions to plan more efficient routes. Unlike static systems like spreadsheets and online maps, it monitors real-time progress from telematic systems to adapt routes and proactively reallocate loads if needed.

Using Aptean Routing & Scheduling software has been proven to reduce transportation costs by up to 30%. Use Aptean’s Fleet Savings Calculator to work out how much your organization could save.

Aptean Routing & Scheduling software cuts transportation costs by up to 30%.

Propel Growth By… Analyzing Your Profit Margin

Being busy is not always a mark of success. Manufacturers need to attract the most profitable jobs to propel growth, which means understanding the true “cost to build” for each job you undertake.

Margin analysis will enable your organization to identify which orders are delivering the most profit, influencing your business development strategy.

Aptean’s research found growth is the number one goal for industrial manufacturers in 2023. Visualizing key data quickly and easily in one place will show you where labor and material costs can be reduced to improve your profit margins. You can also use data to underpin custom quoting capabilities, understanding the profitability of a unique order before working on it.

In addition, data insights are invaluable for making more profitable decisions regarding your sourcing, production, marketing, sales and customer retention strategies.

“Our goal for 2023 is to increase the company’s profit by reducing the company’s material costs.”

Industrial manufacturer, North America

Manufacturers using industryspecific BI tools increased their annual revenue by 6.8% on average, compared to 1.9% among those not using BI solutions.

Make Smart Decisions Using Business Intelligence Software

As we just mentioned, propelling business growth starts by understanding which jobs are delivering profit. Aptean Industrial Manufacturing ERP features a margin analyzer tool, providing you with a clear picture of pricing and production variances.

To scale your company long-term, however, you need to apply that profit margin analysis to your growth strategy. This is where business intelligence (BI) tools can deliver additional value.

A solution like Aptean Business Intelligence will standardize and consolidate data and reporting processes to deliver clear operational information across every functional area.

Aptean BI software includes 300+ standard measured values and out-of-the box reports, so manufacturers can find data quickly and easily. Easy access to helpful KPIs is fundamental to business growth: Aptean research has shown that industrial manufacturers using an industry-specific BI tool averaged 6.8% revenue growth last year, compared to 1.9% among manufacturers not using a BI solution.

Recap: How to Propel Growth by Reducing Your Cost of Doing Business

Supply Chain: gain a more complete view of supplier data to select appropriate vendors and negotiate the best price.

Inventory Management: align material availability with customer demand to avoid purchasing and holding excess stock.

Production: automate core processes to improve speed and reliability, upskilling shop floor teams to support other business areas.

Manufacturing Equipment: track asset performance to move from a reactive to a preventative maintenance model, reducing breakdowns and extending machinery lifetimes.

Order Fulfillment: dynamically optimize shipping decisions and route plans to reduce mileage, fuel consumption and vehicle wear and tear.

Business Analytics: analyze the true cost to build to pivot your business towards the most profitable products and customers.

Aptean Manufacturing Solutions to Explore

Aptean Industrial Manufacturing ERP

Aptean Industrial Manufacturing ERP is an end-to-end solution for manufacturers in dynamic “to-order” environments.

Aptean has developed industry-specific features onto a fully webbased platform with modern easy-to-learn interfaces. From shop floor to delivery, Aptean Industrial Manufacturing ERP delivers visibility, control and efficiency:

› Quote, sell and build custom items without standard product definitions

› Use multi-constraint scheduling that incorporates machines, labor and tooling availability, reducing set up time and increasing throughput

› Make smarter, data-driven decisions faster with Advanced Analytics; including margin analyzer, capable-to-promise and why late analysis

› Improve visibility with full end-to-end view of your operations from quote to cash

› Mobile and flexible access from anywhere on a cloud-based solution with a modern user interface

Don’t settle for a one-size-fits-all system. Choose a manufacturingspecific cloud ERP from a fresh-thinking, by-your-side partner. That’s the Aptean advantage.

Aptean EAM for Industrial Manufacturers

Aptean Industrial Manufacturing EAM is a flexible and scalable maintenance management solution that can profitability by improving asset reliability, streamlining maintenance processes, and providing advanced analytics to aid crit decisions.

With its intuitive user interface that easily adapts to your needs, Aptean EAM:

› Maximizes asset performance

› Reduces maintenance costs

› Improves operational efficiency

› Lowers total cost of ownership

› Increases visibility of maintenance processes

› Streamlines control of your maintenance, repair and operating supply (MRO inventory)

Whether you’re a smaller, single-site operation or a large, multi-site organization, you can rely on Aptean EAM to take the hassle out of your asset management.

Aptean Ship

Aptean Ship is a domestic and international multi-carrier shipping software solution that integrates tightly with Aptean ERPs, simplifying your shipping process.

With so many types of packages, international requirements and carriers, your freight complexity and cost can get out of hand.

Aptean Ship allows you to rate shop multi-carrier and multi-mode and ship both modes through a single application or let our shipping software auto-select the best carrier/service for you.

Aptean Routing & Scheduling

Aptean’s route optimization solution empowers manufacturers to plan and optimize routes for each vehicle in your fleet.

Aptean Routing & Scheduling leverages decades of transportation experience via advanced, proprietary algorithms to reduce route planning costs by up to 30%.

Aptean Business Intelligence (BI)

Aptean Business Intelligence software tracks more than 300 KPIs to help you model simulations and measure projected output.

You can drill down into eight key areas to make cost-effective decisions that maximize margins: quotes, sales orders, production, inventory, purchase orders, receiving, shipping and invoiced sales.

Useful Resources

Four Reasons Automating Manual Processes Is Essential for Discrete Manufacturers

Aptean 2023 Manufacturing Forecast: Industry Insights From Industrial and Process Manufacturers

North America

2023 Manufacturing Forecast

Find out what other industrial manufacturers are planning in 2023 in Aptean’s exclusive research report. We look at how manufacturing companies are driving growth through digital transformation, addressing supply chain challenges, using technology to address labor shortages and controlling the cost of doing business.

Download the Full Report

If you’re ready to digitally transform your business, this blog post explores how to automate discrete manufacturing processes with an advanced industry-specific ERP.

Read the Blog Post

Protect Your Profit: Use an Enterprise Asset Management System to Save Money and Improve Productivity

Tracking maintenance activities for any company is difficult, but for asset intensive businesses like manufacturers it is especially challenging. It’s nearly impossible if you are trying to do it manually. An EAM system is designed to help manufacturing businesses optimize maintenance processes to get the most productivity and life out of your assets.

Read the Blog Post

12 Key Manufacturing KPIs to Track: Leverage Purpose-Built Software to Boost Results

Aptean has created a list of manufacturing KPIs that every business in the industry should track. Plus, we explain how purpose-built ERP and BI technologies aid the KPI tracking process.

Read the Blog Post

Aptean: Get Ready for What’s Next, Now®

Aptean specializes in empowering industrial manufacturers with a strong technological foundation and “single source of truth” to Get Ready for What’s Next, Now®.

With decades of collective industry experience, our dedicated professionals “speak your language” and understand the specific challenges that manufacturing companies like yours face, as well as how to best overcome them and succeed in a dynamic marketplace.

Are You Ready to Learn More?

Discover how Aptean Industrial Manufacturing Solutions can propel your growth by reducing business costs and making end-to-end production more efficient.