The Rise of the dis­tribu-fac­turer and a New Fo­cus on the Sup­ply Chain


DEMM Engineering & Manufacturing - - NEWS -

was a time like no other with the eco­nomic and po­lit­i­cal land­scapes having been changed for­ever. But how has this rapid change im­pacted the global man­u­fac­tur­ing in­dus­try in 2017? Vince Ran­dall, vice pres­i­dent for Aus­tralia and New Zealand, and Frank McLough­lin, Vice Pres­i­dent, Busi­ness So­lu­tions Group, for Epi­cor Soft­ware, have iden­ti­fied a num­ber of key tech­nol­ogy trends for New Zealand man­u­fac­tur­ers to watch in 2017.


One key fac­tor be­hind the growth of the dis­tribu-fac­turer is that the in­dus­try is mov­ing in two mu­tu­ally ex­clu­sive di­rec­tions–to­wards cus­tomer-tai­lored prod­ucts and stream­lined man­u­fac­tur­ing. Dis­tribu-fac­tur­ers thrive on the con­fig­ure-to-or­der and as­sem­bleto-or­der en­vi­ron­ment, pro­vid­ing cus­tomers with tai­lored prod­ucts, while al­low­ing pure man­u­fac­tur­ers to con­cen­trate on stream­lin­ing their pro­cesses.

Dis­tribu-fac­tur­ers have reignited in­ter­est in the “batch size of one” method­ol­ogy and have prof­ited hand­somely as a re­sult. In re­sponse to grow­ing pres­sure to add value for their cus­tomers, many are elect­ing to pro­vide ser­vices such as as­sem­bly, light man­u­fac­tur­ing or kit­ting, of­fer­ing com­po­nents us­ing ad­di­tive man­u­fac­tur­ing technologies and adding field ser­vices to the mix. Cou­ple this with man­u­fac­tur­ers ex­pand­ing to field ser­vice and main­te­nance of­fer­ings in or­der to ex­tend their value, we see man­u­fac­tur­ers adding dis­trib­u­tor-like of­fer­ings, and the dis­trib­u­fac­turer is born.

The would-be dis­tribu-fac­tur­ers, fo­cus­ing on meet­ing a range of cus­tomer needs and connecting more closely to the end cus­tomer, are dis­cov­er­ing that cus­tomer ex­pe­ri­ence is crit­i­cal if di­ver­si­fi­ca­tion is to be suc­cess­ful. The end-user cre­ates a pull for in­for­ma­tion – want­ing reg­u­lar and timely up­dates on the sta­tus of their or­der, and man­u­fac­tur­ers need to be able to ac­cess data at dif­fer­ent stages within the pro­duc­tion process. This is one area where the right tech­nol­ogy tools can have an im­pact, en­abling wide­spread col­labo­ra­tion and vis­i­bil­ity across the en­tire man­u­fac­tur­ing value chain. So­lu­tions like en­ter­prise re­source plan­ning (ERP) soft­ware as­sist the man­u­fac­tur­ing side of a busi­ness to con­nect the shop floor to the top floor oper­a­tions.

The right tech­nol­ogy so­lu­tion such as mod­ern, in­te­grated ERP soft­ware, can: • Sup­port a con­fig­ure-to-or­der en­vi­ron­ment. • Pro­mote stan­dard­i­s­a­tion where ap­pro­pri­ate. • Cre­ate a cen­tralised and shared source of in­for­ma­tion. • Track the en­tire process. • Re­duce de­lays nor­mally as­so­ci­ated with pro­duc­ing be­spoke or­ders.


Cost cut­ting, a search for ef­fi­cien­cies, and ef­forts to in­crease pro­duc­tiv­ity– these ac­tiv­i­ties are noth­ing new to New Zealand man­u­fac­tur­ers who have been re­fin­ing their man­u­fac­tur­ing pro­cesses over the years. Yet, many or­gan­i­sa­tions find them­selves at, or close to the end, of their abil­ity to find ef­fi­cien­cies in this di­rec­tion and must now fo­cus on the sup­ply chain to find ways to lower costs, im­prove re­spon­sive­ness and re­duce risk.

Sup­ply chains have be­come more com­plex as man­u­fac­tur­ers di­ver­sify and ex­tend their reach to new mar­kets to fend off the com­pe­ti­tion and find growth op­por­tu­ni­ties. In­deed, a multi­na­tional sup­ply chain and distri­bu­tion net­work can eas­ily be­come un­con­trol­lable and must be reined in by IT sys­tems that can cope with man­ag­ing a larger, more com­plex man­u­fac­tur­ing busi­ness model by sup­port­ing close cap­i­tal man­age­ment, and an in­te­grated just-in-time sup­ply chain. Along­side this, man­u­fac­tur­ers must en­hance their busi­ness man­age­ment sys­tems to track and ac­cess the in­for­ma­tion which will help to man­age an ex­panded and ex­tended sup­ply chain.


• Cloud, the in­ter­net of things (IoT) and an­a­lyt­ics will be key ar­eas of tech­nol­ogy in­vest­ment for man­u­fac­tur­ers, glob­ally, as many move past the de­sign and con­cept stage to full-on pro­duc­tion ex­e­cu­tion and de­ploy­ment of these technologies in 2017. • Cloud is quickly be­com­ing ta­ble stakes and even the smaller man­u­fac­tur­ers must put a cloud-readi­ness plan into ac­tion if they are to jump ahead of more es­tab­lished, but po­ten­tially less ag­ile play­ers. • Re­gard­ing IoT and data anal­y­sis, many man­u­fac­tur­ers have taken a ‘wait and see’ ap­proach. How­ever, there are al­ready IoT and/or cloud en­abled pro­cesses which rep­re­sent low-hang­ing fruit in a man­u­fac­tur­ing or­gan­i­sa­tion. Man­u­fac­tur­ers should start there and start now! The ef­fec­tive ap­pli­ca­tion of Big Data and the IoT can en­able in­sights to sup­port op­er­a­tional ef­fi­cien­cies. •Man­u­fac­tur­ers must re­think their re­la­tion­ship with mil­len­nia ls/ dig­i­tal­lylit­er­ate work­ers an­dre tool their or­gan­i­sa­tions to lever­age tech­nol­ogy to mo­ti­vate and em­power this next-gen­er­a­tion work­force. Tech­nol­ogy plays a vi­tal role in re­duc­ing complexity, im­prov­ing the qual­ity of work life, and en­hanc­ing pro­duc­tiv­ity. Busi­ness sys­tems that are in­tu­itive and ac­ces­si­ble can as­sist mil­len­ni­als hun­gry for an im­me­di­ate im­pact in the work­place. Now, more than ever, man­u­fac­tur­ers need to en­able high lev­els of au­to­ma­tion for op­ti­mised pro­duc­tiv­ity across the com­pany. For this, they need ac­cess to ac­cu­rate, real-time in­for­ma­tion from one, cen­tralised source to sup­port day to day man­u­fac­tur­ing tasks, on-the-spot de­ci­sion mak­ing and long-term strate­gic plan­ning.

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