02 Feb Microsoft Dynamics NAV in the cloud as a response to the needs of the manufacturing companies
Nowadays, manufacturers are facing other challenges than several years ago. The world is changing fast and becomes more and more integrated. Global economy, a rapid technological growth and unpredictable customer behavior patterns can become a crucial barrier for enterprises. However, they also create boundless opportunities.
The impact of internal and external factors
For businesses, it becomes more and more difficult to operate in the micro and macro environments, full of traps and hazards. This may cause a variety of drawbacks, especially for manufacturers who do not comprehend the on-going changes and evolution… evolution aimed at cloud-based transformation and integration.
It is the highest time to act, turn your attention to modern solutions and technologies such as ERP systems, cloud computing, BI, artificial intelligence, Industry 4.0 and the Internet of Things, says Przemysław Kniat, Sales Manager, IT.integro. The lack of such solutions will be a critical factor to impact the fall of manufacturing companies, which will not be able to accommodate market and customer needs, he adds.
Every day, manufacturing companies are exposed to a variety of hazards. Such factors as unstable world economy, aging society, workforce insufficiency, inconsistent legal regulations, huge data volumes and continuous pressure to implement innovations curb business growth.
|Internal hazards||External hazards|
|Global market||Big data|
|Complicated legal regulations||Innovation and flexibility|
|Insecurity of production processes and data||Investment|
External hazards for manufacturing companies
A worldwide economic crisis, lack of qualified employees, unemployment, currency devaluation and low consumption level are reasons for the decreased profit margins of manufacturers. These factors also hinder decision making on future investment, increasing the volume of output and price levels. Unstable market trends and inability to obtain coherent and reliable data are difficulties which may cause manufacturing companies that have estimated the situation inaccurately to fail.
Global market: collaboration with vendors
Manufacturers can increase their efficiency and sales by integrating their activities and enhancing collaboration with vendors. The concept of partnership within a supply chain gains significance in the period of growing insecurity and fluctuating demand. In addition to reduced costs and risks, companies can tighten their collaboration, combine competences and share knowledge in order to enhance the ability to compete. Partnership should be based on trust and effective communication.
Therefore, manufacturers need solutions to differentiate between information to be protected as trade secrets and information that can be shared with a trusted provider. While sharing information, the risk of breaching data confidentiality and intellectual property should be minimized.
Complicated legal regulations and laws
Amendments to legal and quality regulations are an everyday part of reality for manufacturers. Security and customer protection regulations are of key importance, however for companies their priority is low. The manufacturing process is the priority. Manufacturers require solutions which will enable them to comply with restrictive industry standards, ensuring the high efficiency of production processes at the same time.
The requirements to ensure security, install updates as well as maintain hardware and software from various vendors are the most common problems manufacturing companies face. This causes work overloads for IT departments, which have to allocate a lot of time to routine tasks. This time could be consumed more efficiently.
In addition, meeting information security standards is a great challenge. More and more employees work remotely or flextime. Therefore, it is critical to ensure easy and reliable access to data and protect the access to confidential information.
How can an ERP system in the cloud support manufacturing companies?
The ERP system in the cloud reduces maintenance costs, and purchase costs of IT infrastructure and software by 54%. Cloud solutions enable companies to save both money and time; they also contribute to improved collaboration and shorter production and delivery times.
The cloud streamlines supply chain management processes. The flexibility and unlimited efficiency of the platform enables manufacturers to respond faster to orders, adjust to changing consumer behavior and reduce inventories.
Moreover, entrepreneurs have complete control over the scope of data shared with their vendors. This facilitates the information exchange process, which facilitates demand forecasting, item ordering and replenishing.
The functionality of Microsoft Dynamics NAV has been designed to reduce inventory costs and waste as well as control the order processing cycle, customer service quality, delivery times and deadlines as well as inventory levels.
Security of production processes and data
Microsoft solutions meet all requirements for data security. They are compliant with valid legal regulations and meet the criteria and conditions specific for the manufacturing industry.
Cloud-based solutions provide manufacturers with access to automated updates, ensuring scalability capabilities and data and process security. As an industry leader, Microsoft has established precise requirements for security and privacy and good practices on how to meet such requirements. The Azure platform is also compliant with multiple international and industry standards, e.g. ISO 27001, HIPAA, FedRAMP, SOC 1 and SOC 2, as well as local standards such as IRAP in Australia, G-Cloud in Great Britain and MTCS in Singapore. Rigid inspections performed by external entities such as the British Standards Institution, have confirmed that the security of the Azure platform is under tight control as required under the aforementioned standards.
Internal hazards for manufacturing companies
Workforce deficiencies are getting a much more serious problem for manufacturers, nowadays. The demographic peak and period of the so called employer’s market already belong to the past. It is more and more difficult to find well-skilled employees. Therefore, to maximize the efficiency of production, manufacturers have to focus on how to transfer expert knowledge to junior staff. It is noteworthy that the younger generation born between 1980 and 2000, the so called millennials, have different needs. They usually prefer working remotely or mobile, and require access to data analytics tools and social media.
With modern solutions, employees can access bigger volumes of data. In order to increase process efficiency, companies have to ensure that data is easily accessible and used purposefully. That is why entrepreneurs require coherent and always up-to-date database which can be accessed from anywhere. Many companies still do not use the potential of their data as it is scattered among different sources which hinders analyses and processing.
Innovation and flexibility
To maintain their competitive edge, manufacturers have to ensure that they continue improving business processes in their organizations, they are able to respond to changes fast, raise quality standards systematically, demonstrate social responsibility and focus on the customer’s needs. These features are prerequisite for each manufacturer to be able to operate and endure on the rapidly changing markets.
To secure their market presence, manufactures should keep up with the latest innovations to stimulate the growth of their business. They should reach for solutions that guarantee effective development, streamline production, control warehouse and logistic processes as well as ensure better user experience.
Today’s unstable market and unpredictable consumer behavior patterns, make it difficult to plan future investments. Entrepreneurs have insufficient knowledge and are short of data they require to make accurate decisions on future output volumes, new products and forecasts for their organizations in the industry.
How can a cloud-based ERP system support manufacturing companies?
The cloud ensures mobile access to the ERP system, valuable data and analytics from anywhere, providing you always with up-to-date information. Cloud solutions are a simple way to collaborate from anyplace, share documents and files as well as work remotely without limiting staff and workforce efficiency. The cloud offers a range of capabilities that facilitate collaboration as well knowledge, data and experience transfer between employees. It also provides great assistance for trainers, speakers and presenters.
Junior employees appreciate the capabilities of working mobile and remotely as well as easy access to social media sites and ability to interact with company data from anywhere at any time. This ensures flexibility and freedom to act – the style of work they prefer.
The cloud is a safe and reliable repository for storing, scaling and analyzing Big Data. For executives, it becomes easier to access information which facilitates making difficult decisions.
The ERP system provides opportunities to use large, variable and varied data sets. Manufacturers collect data from different types of sources such as business transactions, social media, sensor data, interchange data. In the past, data storage was a real burden; nowadays modern technologies facilitate this.
Data is created and delivered fast. It should be processed within rigid time limits. In the case of RFID tags, sensors and intelligent measuring devices, large volumes of data have to be processed almost in real time.
Data is uploaded in various formats, starting from structured, numeric data stored in traditional databases to unstructured text documents, e-mail messages, video and audio files, warehouse data and financial transaction tags.
Innovation and flexibility
Cloud-based solutions offer new functionalities manufacturers really need, shorter setup time, reduced complexity of processes and lower innovation costs. Users can test, share and collaborate on new projects and opportunities, avoiding big investment in IT infrastructure.
Microsoft Dynamics NAV when deployed in the cloud enables the company to manage fluctuating demand by means of automated resource scaling and instant access to new capabilities. New solutions support customer engagement in the design and production processes, enabling you to respond to customer’s needs, offer new products based on customers’ requirements and demonstrate your readiness for changes, including new system setup.
Investment in technologies
The cloud model provides you with opportunities to scale resources based on ongoing needs of manufacturers. With a monthly fee payment plan, the cloud-based model eliminates excessive investment in hardware purchases. In such a case, manufacturers use hardware and services of a software provider. This means that advance capital expenditures (CAPEX) can be replaced with lower, annual, fixed subscription fees (OPEX), which can be adjusted based on usage at any time.
The manufacturing industry is one of the most demanding sectors in terms of access to modern technologies, innovative solutions and the cloud. As the era of digital transformation has already become reality, manufacturers have to keep up with its pace not to lose their competitiveness and their customers and partners’ trust