Managing Digital Change in Manufacturing

David Morley, VP Manufacturing Practice at Gerent LLC

Manufacturing is about to experience a large increase in mergers and acquisitions. Q3 saw a rise in activity as a cohort of forward-thinking businesses sought to acquire low-liquidity targets. This will realistically be followed by a bigger increase in deal activity for Private Equity.

But poor integration can kill even the best deal, regardless of its type, size, and strategic fit. Manufacturing, in particular, has struggled with the effective integration of acquisitions; many organizations have not kept up with technology. Data exists in many formats, and the prospect of changing its organization can be overwhelming. That said, the ability to communicate and report progress efficiently is crucial — old, ineffective methods must be replaced by new, digitally-facilitated ones.


Digitization Offers a (Partial) Solution to Manufacturers

The truth is, there is no silver bullet. Technology has outpaced adoption in the manufacturing vertical, causing a disconnect that makes otherwise good acquisition targets unattractive — and, in some cases, limiting offers. Buyers view technology upgrades as expensive and problematic; they may hesitate to close a deal if their target business requires transformation. 

Quick start solutions can be utilized to quickly advance a manufacturer in advance of a sale. However, without talented discovery work on the front end, it’s likely to be unsuccessful. The biggest issue with poorly implemented change is team adoption; without it, and the value of a transformation is limited. 

However, if a company’s current ERP system or systems function, it naturally possesses a wealth of data that can, given the right approach, be collected and analyzed in real-time to provide high-value cross-functional reporting, dashboards, and insights.

The benefits of selecting the correct approach to data and digital analytics are easy to define. Real-time analytics empower strategic decision making and facilitate better real-time reactions to changing market conditions. Throughout the pandemic, we’ve seen publicly-traded businesses grow against market conditions — and companies in thriving markets fail to take advantage of their environment. 

With a little research, it is possible to conclude which companies were able and agile enough to pivot and which are simply relying on liquidity to survive until conditions improve.


First Steps for Implementing a Digital Strategy

Change doesn't happen overnight. However, it is possible to build an effective digital strategy that will mature over time, provided the business denotes key milestones and sets value-driven goals. An organization's first steps should be to develop a clear vision and strategy for the business and investing in data cleansing. Making transformation goals smart and measurable, as well as understanding their interconnectivity, is crucial.

For example, a goal to reduce inventory naturally requires data. Does this endeavor tie into the sales forecast of demand? Will the supply chain react with pricing? Can operations process orders faster if materials are not on the shelf? Without solid data and analysis, it is almost impossible to imagine that the customer experience will be diminished, creating more downside instead of reducing capital in inventory.

The Salesforce platform provides a solution that sources multiple inputs into common reporting. Companies that adopt the Salesforce platform can more easily integrate and divest business units without causing major disturbances to existing systems.

Beyond selecting the right Salesforce partner, key transformation imperatives include:

  • Obtaining management support
  • Training the team
  • Encouraging user adoption
  • Building a system of value

The benefits are huge from a business perspective, as implementation could be key to attaining information and insights from Sales Operations, Supply Chain, and Finance.

Call Gerent today and set up a call with our manufacturing team. We can quickly evaluate your individual needs and start working toward your digital solution.

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