Turning the tide

According to recent newsflow, the UK economy's recovery is progressing well. Britain's manufacturing sector has grown strongly in recent months, and October saw the fastest growth in export orders in more than two years, thus helping to fuel that growth still further. In short, the dark days of early 2009 seem well in the past. Once again, the brighter uplands of prosperity beckon. Well, maybe, says Steve Winder, regional vice-president for the UK and Eire at Epicor. For, despite that strong growth, he points out, Britain's manufacturing sector remains around 9% smaller than before the financial crisis, unlike the services sector which has now recovered the ground it lost in the 2008 09 recession. And it would be a mistake to assume that a return to pre-recession levels of activity – and prosperity – was just a matter of time, he says, referring to studies such as the 2013 Global Manufacturing Competitiveness Index from consultant Deloitte Touche Tohmatsu and the U.S. Council on Competitiveness. "There's a massive power shift going on, and international manufacturing landscape is evolving rapidly," notes Winder. "Over the next five years, 20th century manufacturing stalwarts such as the United States, Germany and Japan will be challenged to maintain their competitive edge by emerging nations such as India and Brazil." Indeed, he adds, the Deloitte report reckons that the UK is predicted to drop from the 15th most competitive nation today to 19th position in five years' time – a steady (and worrying) continuation of a decline that has been ongoing for some time. In short, says Winder, it's not immediately clear what can be done to arrest the seemingly irresistible decline. "We have a stable economy, favourable labour laws, fantastic R&D facilities and a history of innovation," he points out. "We're among the best when it comes to semiconductor design and aerospace and defence, and are seeing a resurgence in high value, highly specialised manufacturing. And we also have a highly skilled workforce." But even so, he continues, the stark fact of the matter is that these strong advantages face inevitable headwinds from a number of other factors – factors which are less easy for individual manufacturers to counter. Government policy, for instance, has a direct bearing on many aspects of business, points out Winder. From encouraging banks to lend and invest, to encouraging the development of the world-beating skills in young people, to creating and sustaining transport infrastructure, government actions directly touch business performance in many ways. Similarly, he adds, energy pricing – and energy-related regulation – are another obvious area where businesses have limited control over their destiny. And while exchange rates are these days market-set, he notes, policy decisions regarding interest rates and quantitative easing have had a clear impact in recent years. Further afield, Chinese manufacturers are arguably benefiting from the present rate of exchange for the Chinese renminbi while German manufacturers have been boosted by the weak Euro. In short, sums up Winder, in seeking to improve their prospects and make their businesses as resilient – and as competitive – as possible, manufacturers probably have fewer weapons in their armoury than might be surmised. But one key weapon is very much within their grasp, he points out – adding that Epicor is seeing encouraging evidence that manufacturers have come to the same conclusion. Investment in IT?seen as an imperative "Many are now seeing investment in IT systems – and particularly ERP solutions – as a key imperative," says Winder. "They're wanting to leverage 'best of breed' ERP systems to improve the control that they have over their businesses, and boost their competitive advantage. Almost all our new projects are replacing a system that is four to 10 years old and is either inflexible, out of support, or too expensive to enhance." At a business level, he explains, companies are looking for ERP solutions that will help them respond to customer demands for shorter lead times and better due-date compliance while also operating with lower inventory levels, better equipment utilisation and higher levels of productivity. All of which, in short, adds up to greater competitiveness, and – crucially – improved profitability and business resilience. Meanwhile, he adds, from a purely systems perspective, the agenda is just as clear: better visibility into key business metrics, better customer relationship management, better supply chain integration with customers and suppliers and an improved – and seamless – way of back-office working, with process-driven workflow, best-practice business processes, and enhanced automation and administrative efficiency. Clear differentiation in the marketplace "The other key driver is to have a system that can be flexed to address changing business requirements," adds Winder. "The inherent flexibility of Epicor ERP and the ability to create new process flows and business dashboards is a real differentiator, as is having real-time visibility into KPIs. And we're also benefitting from a real enthusiasm in the marketplace for ease of use: a Microsoft-like 'look and feel', combined with close integration with the office applications people are used to using. This was something that Epicor invested in five years ago, and which again now gives us clear differentiation in the marketplace." Return on investment (ROI) is also a key consideration as is the speed at which that ROI is delivered, adds Winder. "These days, most customers are favouring a 'quick start' approach aimed at making a measurable difference within a short timescale," he stresses. "Gone are the days of lengthy projects with a lot of customisation or bespoke development. Gone too are the days of customers wanting their ERP solution implemented for them: More than ever, they want us working with them, delivering a solution together." And gone too, it seems, are lengthy implementation projects, aimed at delivering extensively customised systems aimed at satisfying the needs – real or imagined – of a broad constituency of users. "These days, the idea is to go with an out-of-the-box initial project incorporating proven best practice and then see how it works for two or three months," says Winder. "Only then are any apparent gaps evaluated – with any proposals to fill those gaps being measured against a rigid ROI model." Tightly focused and firmly benefits-led, it's certainly a departure from the ERP systems – and ERP system implementations – of yesteryear. But it's clearly an approach that's finding favour, says Winder, with Epicor's latest 'next generation' Epicor ERP now in use in over 1,000 customers worldwide. In fact, says Winder, since it was first introduced, Epicor ERP has been selected by more than 3,700 customers in more than 70 countries worldwide, with the latest version – described as 'better, faster, and more powerful' – underscoring Epicor's commitment to continuous improvement by containing 300 or more new features and enhancements. "ERP has a reputation as dull and dependable – the internal transaction engine that handles the administration and paperwork," he observes. "But as British manufacturers seek to ratchet up their international competitiveness, and grow the manufacturing sector once again, it's time to take a fresh look at it." Cutting-edge ERP, in short, can help to deliver cutting-edge performance while it's a fairly safe bet that yesterday's tired old legacy systems won't. If you're not thinking about upgrading, then maybe you should.