By Jennifer Scholze, Team Lead – Energy and Natural Resources Marketing, SAP
From metals and building materials to paper products and packaging goods, there’s no question that every sector of the mill products industry is growing. But the significance of that growth rate remains uncertain for midsize competitors without the right technology.
“Boosting competitiveness and growth comes with its share of risks,” a recent Oxford Economics report reveals. “Respondents ranked macroeconomic issues like inflation, unemployment, and the rising cost of materials as the top threat (39%). Also on the list of threats is the inability to find the right talent (33%) or retain the right talent (31%) – indicating that staffing issues are tough.”
So, how can midsize mill companies grow without risking their stability and profitability? Overcoming these obstacles lies in leveraging cloud-based solutions and artificial intelligence (AI).
The operational “black box” presents barriers
A significant challenge for midsize mill products manufacturers is visibility into production processes. For many, their production floor is a “black box” – materials go in and finished products come out, but the journey in between is unclear.
This lack of visibility impacts the ability to meet customer demands in ways that address top business objectives, including:
- Attracting new customers
- Growing revenue and understanding profitability
- Innovating with new products, services, and business models
- Strengthening organizational agility
- Boosting employee productivity and efficiency
- Increasing organizational resiliency
For example, they often can’t answer critical questions, such as “Can we fulfill and deliver promised products efficiently and on time?” and “Which products and customers are profitable?”
Oxford Economics also reports that half of respondents struggle to “scale systems to match organic business growth or lack visibility into supply chain and manufacturing capacity.” But more troublesome is the 40% that are “unable to support new businesses, enter new geographies, or deploy new business models.”
As these findings clearly show, an outdated IT infrastructure stifles growth. Many companies are stuck using systems that are 15 to 20 years old, often relying on spreadsheets or legacy software that is difficult to upgrade.
For a deeper look into the value of cloud ERP for midsize mill companies, read the SAP-sponsored Oxford Economics report, “Blueprint for Success: How Mill Products Manufacturers Can Lean into Technology to Outpace Competitors
These systems are time-consuming to maintain, highly risky from a security standpoint, and leave little room for innovation. Additionally, the manual nature of these processes leads to inefficiencies in departments like shipping and finance, where hours are spent preparing shipments or generating reports.
According to Oxford Economics, the best solution to this common challenge is “having a single source of truth – a reality made possible with well-integrated data and driven by cloud ERP.”
Cloud ERP catalyzes and protects meaningful growth
With cloud ERP and one source of the truth across the company, companies can quickly adjust and pivot their strategies, operations, and processes based on new information or shifting priorities. With the addition of embedded AI and automation capabilities, they can quickly respond to customer demands and make informed decisions about production capabilities.
For example, a cloud-based ERP system can streamline the process of receiving and shipping orders to multiple locations, as well as automate batch goods shipping. Additionally, label generation and printing can be automated, saving time and reducing errors in the shipping process. These process improvements not only increase operational efficiency but also enhance the ability to scale – all without the need for manual intervention.
Beyond visibility and automation, midsize mill products manufacturers can drive revenue and margins with the integration of AI and industry best practices into cloud ERP. With Business AI, companies enhance various aspects of the customer experience, including:
- Analysis of historical purchase behavior data to determine optimal pricing, prevent over-discounting, and protect margins
- Buying experiences intelligently guided in clear conversational language, so customers choose product variations that meet their needs and are most profitable for the business
- Real-time updates on order statuses, similar to the expectations set by consumer-favorite companies such as Amazon
In addition to improving operational efficiency and customer interactions, cloud ERP helps mitigate risk. By moving away from on-premise solutions, mill products manufacturers no longer need to worry about the costs and complexities of software upgrades and security vulnerabilities. Instead, cloud providers manage system updates and ensure data security, allowing companies to trust that their core systems will remain operational even during updates.
Continuous growth without disruptive risk
Adopting cloud-based ERP with embedded AI is the catalyst midsize mill products manufacturers have been demanding to fuel a meaningful growth trajectory. By overcoming the limitations of their legacy IT infrastructure, businesses can innovate, scale efficiently, and remain resilient in the face of industry challenges – achieving continuous growth without the disruptive risks of traditional approaches.
For a deeper look into the value of cloud ERP for midsize mill companies, read the SAP-sponsored Oxford Economics report, “Blueprint for Success: How Mill Products Manufacturers Can Lean into Technology to Outpace Competitors
