Page 14

October 2015


Business Reporter


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How ERP integrates the value chain for Industry 4.0 V

ery few industries have grown quite as rapidly as the manufacturing industry over the last number of years. While many sectors have struggled in difficult economic times, the manufacturing sector has found new ways to survive by integrating operations from end to end, embracing new technologies and managing supply chains more efficiently. Today’s manufacturer can maximise yield, operate with fewer line stoppages, and successfully communicate different systems throughout the business. The factory of the future is already taking shape as we enter Industry 4.0 and businesses implement efficient, scalable, and cost-effective performance strategies which integrate their entire value chain. But how is this possible, and what is the driving force behind this new breed of manufacturing enterprise? Just as the manufacturing industry has evolved, so too has the Enterprise Resource Planning (ERP) market, and today’s solutions are enabling creation of the fourth industrial revolution. Today, customers expect goods and services to be tailored, and the speed at which they want to receive them is constantly accelerating. As a result, ERP solutions have had to grow to help manufacturers become more flexible, more responsive, and drive greater efficiencies across the supply chain. In the days of Industry 3.0, an ERP system was the overarching application for production control, and drove linear operations within a factory. ERP would process sales orders and dictate quantities of product that needed to be manufactured, before transferring this data to its production control module. Production control would then initiate production and return progress reports to senior management. This linear process was successful in automating processes to boost efficiency and productivity, but left a manufacturing organisation vulnerable to unexpected or sudden changes in the supply chain. In addition, the costs required to standardise communication interfaces were as high as the labour-intensive hours required to manage the ERP solution itself. Fast forward to the advent of Industry 4.0 and applications such as SYSPRO have evolved to create smart factories of the future. Previously, production managers would have to guess how their machines were performing, or use separate manufacturing execution systems. Operatives would have to input quality and yield information from machines into ERP systems. Now, with Cyber Physical Systems connected through the internet of things, it means that machines can do the updating for themselves. They are able to input directly into SYSPRO the number of items produced and items scrapped, or even

take themselves offline for maintenance or updating the production plan. This means the production manager and operatives can focus on running the shop floor in the most efficient way, and leave the administration to systems. The result? No longer are businesses spending too much time in meetings quantifying their data, and the days of having to manually extract business information and pass it through multiple departments are gone. Today, communication throughout the supply chain is more consistent. Simulations and forecasts are available anywhere, at any time, through mobile apps such as SYSPRO Espresso, to facilitate decision enablement. But how are vendors adding value to the manufacturers themselves when they seek out such an application? The manufacturing sector did not survive the recession by just cutting costs. Yes, businesses adopted lean strategies, shaving costs, time, and waste wherever possible, and

that culture has remained even as the sector has left the recession behind. But they also invested those cost savings: taking a risk on a big new contract; buying competitors who were struggling; increasing capacity; buying new machines; or automating the shop floor. Today, manufacturing businesses understand they need ERP, but want to make sure this is a long-term investment that will deliver clear return on investment. K3 Syspro recently launched its unique Business Case Analysis Tool, which identifies the cost and time savings that a potential ERP buyer can experience from implementing SYSPRO ERP. It generates a report that examines efficiency improvements, labour savings, reductions in stock holding, and cost and time savings per transaction, as well as showing projected reductions in IT spend as a result of implementing SYSPRO ERP. It means that an enterprise can calculate the impact SYSPRO will have and then measure this as it progresses through its ERP journey, showing

true value to all project stakeholders. For more than 25 years, K3 Syspro has helped manufacturing enterprises such as Metaltech save £200,000 a year with SYSPRO. ERP should cut costs, improve efficiency, productivity, and communication throughout a business. That’s why K3 Syspro is also a software engineering house. The company creates its own software that integrates seamlessly with SYSPRO to better communicate data between different systems, whether that be CAD applications or CRM systems. Successful ERP projects should facilitate the connectivity of Industry 4.0, not hamper or obstruct it. What’s the point in having a fully connected enterprise if it falters because of your main business critical application? There’s no doubt that the manufacturing industry will continue to evolve as it looks towards new ways of remaining competitive. The rise of wearable devices, big data analytics, and the growing relevance of the internet of things will continue to shape Industry 4.0 and facilitate improved decision enablement. But one thing you cannot dispute is that it will be the evolution of ERP that drives these changes. And K3 Syspro won’t just be providing the solutions that will drive the change, but will be driving the change in the way these solutions are delivered; with greater flexibility, transparency and functionality. How? Because the company’s roots firmly lie in the UK manufacturing sector. K3 Syspro has helped UK manufacturing businesses remain competitive through globalisation, reshoring and offshoring, the advent of mobile, the recession and its rebirth, and will continue to support the industry as it continues to evolve. Don’t just take our word for it, though – speak to one of the manufacturing businesses embracing Industry 4.0 and continuing to be competitive during difficult times, specialist component manufacturer Titan: “It’s not until implementation that you are able to really see something as large as ERP in minute detail, understand how it will work for your business and how it will solve existing and future problems,” says Mark Martin, financial controller at Titan. “K3 has really helped us to imagine the future of the business with SYSPRO, and foresee some of the many benefits it will bring to our company. Rather than change our business processes to build them around SYSPRO, K3 has built SYSPRO around our existing business processes, which is ensuring minimum downtime and disruption.” For further information, please contact Sarah Winterbottom, marketing manager, K3 Syspro on 0161 876 4498, or email

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