by Jasbir Singh, the Vice President of Cloud ERP/SCM, Oracle APAC
Today’s world has become more connected, and technology has revolutionised business conduct for enterprises of all sizes. SMEs today are able to expand, grow and compete globally due in part to innovations in technology, for example, the Internet. But amongst the latest innovations being adopted by SMEs, cloud computing has played a significant role in changing the way manufacturing organisations use IT services – providing timely solutions to address industry and supply chain challenges. Cloud computing also enables organisations to be highly flexible to adapt to market changes quickly. This is part and parcel of a good supply chain management practice, especially in a cost-conscious economy.
In fact, over 70 per cent of manufacturing companies are using cloud applications somewhere in their supply chain while another 25 per cent are actively considering cloud in the supply chain as a way to deliver business applications. The reason for the cloud movement is that current supply chain applications are limited in their ability for customisation. Cost is also a concern as organisations struggle with the challenge of determining the correct level of bandwidth and how to quickly respond to changes in demand. Last but not least, with connectivity comes the issue of security, where adequate levels of redundancy and security is needed to ensure business continuity and minimal interruptions.
How can SMEs utilise technology to further improve their SCM
Having a supply chain management tool that meets the digital and IT challenges of today’s fast-paced markets can help businesses of all sizes to grow and innovate. Modern supply chain tools transform business supply chains from functional necessity to a competitive advantage.
Businesses in industrial manufacturing face an unprecedented level of complexity when managing their supply chains. One way to minimise the complexities is to streamline the plan-to-produce process into a single efficient flow. Aside from planning, there is also a need to ensure that the manufacturing process is well managed from idea to concept to design to commercialisation to manufacturing. Here, the right application can monitor processing standards, create and manage work orders while concurrently monitoring shop floor statuses. Such applications can help manufacturers to quickly and easily execute jobs, and analyse and control work order costs.
ASEAN SMEs need to embrace new challenges and technologies
According to research and reports by International Data Corporation (IDC) IDC Manufacturing Insights, The Path to Supply Chain Cloud (July 2015), there is a growing momentum for supply chain cloud. Cloud-based applications for logistics is expected to grow by almost 20 per cent by 2019 versus less than five per cent for on-premises tools. A similar preference was also recorded for inventory management where more than 26 per cent growth is expected for cloud-based inventory management tools by 2019 versus only close to four per cent growth for onpremises versions. This clearly shows that there is a shift in mindset across all business sectors when it comes to supply chain applications choices.
This is because the supply chain cloud applications can help provide rapid return on investments, greater scalability and requires fewer IT resources. Perhaps it was a common notion that advanced applications require better knowledge and skills. Today’s applications are fast and easy to deploy, and adoption risks have been largely mitigated given equivalent functionality to on-premises alternatives. Such benefits need to be made known so that SMEs can quickly adopt such applications to improve business performance.
How can SMEs stay competitive with technology
One way for SMEs to gain competitive advantage is to use modern cloud-based technologies (such as, ERP, supply chain, logistics and trade management tool) that will help manage all production to transportation modes within and across borders, reduce costs, increase efficiency, and enables compliance. Such application can also help SMEs to deliver excellent service as they help to optimise routing and delivery times as well as assist in virtually seamless collaboration with customers, suppliers and partners. By making sure they provide excellent service, SMEs can win over more customers and further grow their business.
Another way for SMEs to be more competitive is to have tighter control over their costs. The right technology can help to give comprehensive visibility and management of material flows, warehouse work and product costs across the supply chain. Inventory is a major asset and effectively managing inventory, including the related inventory movement transactions, can impact SME’s bottom lines.
As with all changes in a turbulent business environment, businesses have to be prepared with applications that can help them weather through tough times, while ensuring that they can meet demands during upturns. The key here is whether legacy systems are capable and flexible enough to meet changing demands. For example, SMEs must be able to manage all product costing from reporting through to decision support. They should also have a tool that can scale and manage costs with simple pricing options. Having the two combined will give them the edge that is required to remain competitive price-wise.
About the Author
Jasbir is the Vice President of Cloud ERP/SCM in Oracle, Applications. He has 20 years of ENTERPRISE Business Applications experience in various industries. Prior to his current position, Jasbir worked at Microsoft as an Industry Director, spending most of his time in Japan driving key business solutions for Enterprise-level customers. He has also worked in Oracle since 1998 from consulting to sales in the business applications space, before joining Microsoft and now, back to Oracle.