OPINIONS FROM ACROSS THE MANUFACTURING INDUSTRY Epicor ERP tech

Ian Macdonald, manages the EPICOR Solutions Engineering group for Australia, New Zealand, and the Pacific Islands. He explores how Enterprise Resource Planning (ERP) technology can help manufacturers to contain rising costs.

While the Australian manufacturing sector continues to recover from the COVID-19 pandemic, inflation and rising interest rates mean that even as global supply chain blockages start to ease, manufacturers are now struggling to contain operational costs. With these factors in mind, here are three ways manufacturers can use technology to combat rising costs:

1. Using IoT to manage soaring energy prices

Global oil and gas prices have spiked due to the conflict in Ukraine, and the current gas price crisis is proving that Australian companies are not immune. With prices rising to a historic $30$35 per gigajoule for contracted gas, Australian manufacturers are searching for ways to manage soaring production costs.

Systems such as Epicor’s Advanced Manufacturing Execution System can help manufacturers control production costs by using technology to capture highly granular shopfloor data, which can then be used to forecast and reduce energy usage.

This is achieved by attaching IoT devices and sensors to manufacturing equipment, allowing companies to capture and track data on such diverse things as energy usage, temperature, vibration, material usage, scrap, downtime, and good output. IoT devices mean that manufacturers can model and accurately predict the real-time costs of running a factory, allowing them to optimise operations to achieve the greatest throughput and profitability.

2. Relying on automation to onshore supply chains

Since the 1970s, companies in the US, Europe, and Australia have been outsourcing much of their manufacturing to countries that can manufacture and supply acceptable, quality items at the lowest cost. However, in recent years, there has been a subtle but growing shift, with the COVID pandemic, and growing geopolitical instability leading to shortages in everything from commodities to microchips. The global shortages and resulting inflation have changed attitudes towards local manufacturing, leading more companies to consider onshoring as a way of securing their supply chains. A study by McKinsey in November 2021 found that up to 90% of companies were looking to onshore some of their manufacturing processes.

Smart Manufacturing can help companies bring parts of their supply chain back to Australia, whilst still maintaining profitability. Automating any labour-intensive processes that do not need intelligent human input allows manufacturers to work smarter, increasing throughput without increasing costs.

Epicor’s Advanced Manufacturing Execution System allows manufacturers to ‘manage by exception’. This means that once Epicor’s low-touch, high-tech systems have been fully embedded into a company’s production processes, factory operations can run on fewer staff, only requiring human intervention in exceptional cases.

In practice, for a New Zealand-based defence steel manufacturer, this has meant using Epicor’s Materials Requirement Planning solution to forecast demand and optimise inventory. This allows them to formulate a manufacturing schedule, release jobs to the factory, and automate stocking and purchasing processes. In this way, Epicor’s software has allowed them to compete in a pricesensitive global market while keeping their operations in New Zealand’s relatively high-cost economy.

3. Closing the talent gap with technology

With a record 13.7 million Australians employed, it’s no secret that Australia is facing a shortage of onshore talent. There is a growing gap between the demand for skilled employees and the available labour pool, and this is another place where automation can fill the gap.

In the case of engineered-to-order items, where many Australian and New Zealand manufacturers traditionally compete, the repeatable components of the end-to-end process can be automated using tools such as Epicor ERP’s inbuilt configurator, workflow automation engine, and comprehensive Manufacturing Resources Planning 2 engine.

With Epicor’s technology, processes such as quoting and order taking, configuration and estimation, raw material and component purchasing, and shop floor production can be largely automated, leaving engineers or estimators free to focus on genuinely unique custom design requirements.

A typical process would be to receive quote requests via email or online configurator, create a ticket, send the ticket to an engineer or designer’s queue for any bespoke design and analysis, and then automatically email the final quote to the customer. The tedious administration tasks that add little value to the sales and production process are automated, leaving human engineers to create and innovate as only they can.

As companies grapple with the challenges of remaining competitive in a volatile economic environment, having machine-based manufacturing solutions on hand means Australian manufacturers can keep costs down and stand toe-to-toe with our global competitors. epicor.com.au