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Are your IT initiatives aligned with your strategic direction?

Written by CyFrame

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IT initiatives vs strategic direction

Do you perceive that improving your molding or extrusion business’ capacity to better manage, work smarter, make better, faster decisions are executive discussions or technical ones?

Can you quantify if IT dollars spent have resulted in improved profits or improved service levels?

Have you bought into the idea that IT resources, internal or external, have more insight into satisfying your client’s requirements, resolving production capacity problems, material allocation issues or managing your true cost of goods sold than you do?

Often attempts to leverage / integrate generic or customized software:

  • Yield more complexity and expense than they generate in business value.
  • Result in an increased dependency on technical resources with little quantifiable efficiency gains.
  • Provide no improvement with respects to sharing critical real-time information.
  • Cripple the capacity to make rapid informed decisions that can make or break margins, lead times and relationships.

 

Top signs your IT resources are out of touch with your molding / extrusion operation.

In our dedicated efforts to help plastics processors identify inefficiency in order to achieve sustainable profitable growth and improved service, we frequently encounter business owners that are entirely removed from those discussions and have not been fully informed about the duplication involved in their current processes and how heavily reliant those processes are on error-prone manual human tasks and fragile software interfaces.

Widely recognized, commercially accepted systems, that have a high customization capability are all too often both conventionally and enthusiastically adopted by Technical IT resources and is, in fact, the top symptom of not being aligned with your industry and operation.

When you are being persuaded to introduce large “do everything, for every manufacturer” systems into your molding/extrusion operation on the basis that they are world renowned, have trained integrators in every city with thousands of programmers, that is a clear indication that you’re on the verge of entering into a very long implementation cycle and will have to assume major technical integration costs that can easily snowball out of control with limited enterprise efficiency gained.

The fact is, generic software systems do not have the experience in niche focused markets. They require a heavy IT presence and place a tremendous amount of responsibility on the business to identify the needed process improvements and best practices themselves. Most often, if driven as a technical business initiative, enterprises are likely to recreate existing process 1 to 1 without creating much in the way of tangible efficacy gains.

In addition, these systems, although they make an attractive business case and look good on paper, do not integrate well in plastics production environments and end up years down the road, still reliant of many of the side systems and workarounds that the business should be trying to eliminate as the top priority.

Far worse, is that the business owners often delegate massive responsibility in the name of lack of technology comfort level, and don’t take advantage of the incredible ability to step back and impose their vision for the future of the enterprise by leveraging the opportunity to work with industry experts to address critical concerns, top-level objectives, and strategic direction.

Further, human nature dictates that change, even minor adjustments to the process, no matter how well intended, are often met with challenge and resistance. Owner’s involvement and understanding of the decisions taken, beginning from the sales cycle through implementation, training and cut over, is critical to properly managing resources, keeping the momentum, reestablishing the focus on key process and capacity improvements, management cost controls, and the ability to improve the customer experience.

Leading ERP vendors offer great modular flexibility for the broad-spectrum market. However, when talking specifics for the plastics processing market, generic systems leave a tremendous amount to be desired.

The reality is that critical questions like, how can production capacity be optimized? how many variables are involved in alternate materials that affect purchasing and inventory depletion? what would be the impact on product and packaging variants? what are the labor factors of all the added values operations with different constraints, production routings, varying capacity and efficiency of machinery? how do you track consumption of material in real-time to manage inventory? take a back seat when evolution is focused on technology over expertise, native fit, and collaboration.

When you factor in the complexity in costing out finished goods with the intention to measure against standard to monitor production efficiency and profitability to drive actionable dashboard reporting in your unique enterprise with you unique customers, it leaves a tremendous amount of responsibility on employees to identify where and what efforts need to be prioritized and often doesn’t consider how other leading molders and extruders ensure things like profit margins are measured and controlled.

The vast majority of the critical controls and efficiency gains mentioned above, fall into the realm of CUSTOMIZATION and INTEGRATION of new or existing systems when dealing with Generic Software.

IT resources play a very important role with respects to maintaining administration security levels, keeping all hardware configured and running smoothly along with troubleshooting network or other problems as they arise.

It’s important to remember that large recognizable generic do-it-all ERP software firms, with multinational ad campaigns, as widely utilized as they are, are akin to an empty building: the framework is there waiting to be renovated inside or in this case, the software integrators to set up shop in your enterprise. This is not the best cost/value ratio for your small to medium-sized plastics processing business unless of course, you’re looking for a new and expensive challenge.

Getting the right business technology partner that is focused on helping you execute your strategic vision, who is already specialized in your industry and who is willing to invest the time to understand and align with your business, to expertly qualify and execute high-level strategy, introduce best processes / industry practices and add quantifiable value to your enterprise without customization, complexity or risk to your business is paramount. In short, just because you could further customize your planning, quality or inventory systems, doesn’t mean you should.

As the business owner, you are the most important person who needs to ensure the ERP partner is in perfect alignment with your primary objectives for the business as a whole and supports the operational needs without duplication, learning curve, complexity and without getting lost in the technical minute.