Sunday, February 15, 2009

Decision time: Wait it out or retool now

vicinity software
I would like to challenge some conventional wisdom during economic downturns in the formula manufacturing sector. I propose that during slow economic times it is critical to re-tool and invest in the future. It is much better to rework business processes while production is slow than when you are rushing to get orders out the door. Your project team has more time to focus on what makes your company great and what you customers really need from their supplier. When times are busy no one has time to address these critical topics.
I am working with number of formula manufacturing clients that are taking this relative slow time to rework their business and manufacturing processes. They are expecting that the market will rebound and when it does they will be ready. They are betting that their competition will be rebounding with obsolete systems and this will turn into huge market share gains when the sales return.
These clients are focusing on some of the following areas:
  • Reduction of inventory values to free up working capital by better inventory accuracy
  • Understanding future raw material price increases and the impacts on finished good costs to either identify cheaper substitutes OR differentiating their higher quality product in the market place
  • Retooling the scheduling process to better utilize existing capacity by implementing shop floor scheduling and MRP
  • Identifying formulas with lagging production yields to reengineer the formula or process or phase out the products if possible
By keeping a keen focus on the immediate goals that not only increase working capital today but also position the company for greater demand in the future, these companies are staying afloat today while becoming the leaders of tomorrow.
So the key is how to you pay for such an endeavor?
The items above are not as expensive as you might imagine. Vicinity from Vicinity Manufacturing coupled with Microsoft Dynamics is one example of an inexpensive ERP solution that addresses all these issues for formula manufacturers without breaking the bank. There are others in the market as well but one thing that makes Microsoft Dynamics so much more attractive today is financing available via Microsoft Financing. You owe it to yourself to take a look.
So what are you waiting for? Is your system a result of Y2K and approaching 10+ years old using outdated technology?
Is your competition sitting back waiting this out or are they preparing for the next wave? Can you really afford to wait to find out?
So I challenge you to think toward the future with an eye on today. It can be done with a reasonable budget and is more affordable then you might think.

1 comment:

Mel Bowling, COO said...

Your comments are dead on!

Paralysis is not a viable competitive strategy. Our clients are aggressively realizing efficiency gains through improved processes and technology. They will be the pack leaders as others try to catch up.

Vision, strategy, and successful partnering are where we are seeing leadership prevail, and Vicinity Manufacturing and Dynamics GP continue as critical elements to success!


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