Feature Article
Economic Growth
A Bright Future Ahead
Industry standards and initiatives have changed in recent years due to the recession and necessary cutbacks in order to preserve a company’s investment options. Reviewing this year’s numbers for spending show that a fifth of companies are not spending, a fifth have been unaffected by the recession and sixty percent of companies have been affected by the economy in recent years and are now venturing out of their conservative business plans to advance their companies. Looking into the future, many companies are now emerging from the recession with intent to begin reinvesting their monetary capital.
The last few years have seen most companies hold off on their spending in order to see how the economy was going to fluctuate. With the economy recovering, businesses are now beginning to invest their monies in order to help prepare them for the future. Since this and next year are projected to have an upswing when exiting this recession, many businesses are looking to reinvest into advances in equipment and information technology.
Equipment and Information technology are the two largest areas to invest in because many companies have been delaying upgrades in the last few years to help cut costs and try to survive in the recession. These two areas of business alone are going to invest the most money because each helps to provide either the resources for operations or information technology advancements to enhance security as well as communicability. With the economy moving gradually upwards, companies are now more comfortable to begin upgrading their various business units. Other areas for possible investment include, staffing, maintenance services, enterprise applications, outsourcing, and 3PL services.
In addition to looking to invest in essential items, companies have begun to look into environmentally sustainable business options since the green trend appears to be here to stay. Of these options, businesses are looking into managing their recycling, lighting fixtures, air circulation, packaging, and reusable containers. Many of these companies will evaluate these sustainable pursuits for the next year in order to gauge whether or not they will have an impact on the bottom line.
The sustainability is directly linked to companies now beginning to emerge from the recession wanting to get the most "bang for their buck". Reviewing environmental conditions of the businesses could prove to reveal new ways of changing the office atmosphere in order to be green and save money. Many companies are looking to reduce their carbon footprint because it is mutually beneficial helping the environment and lowering operating costs as a whole.
The future holds a great many possibilities for businesses to expand in a number of industries because of the economy’s recovery. If you or your company is looking for suggestions regarding how to utilize the future and new technology for the greatest benefits, contact ASIL to discuss a consultation.
Reference: 2011 Industry Outlook: Optimism Shines by Lorie King Rogers
Contributed by Joe Pazmany
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Spotlight
Chief Supply Chain Officer
During the last few decades the key leadership in big companies has gone through many changes. If we take a look at leadership in the Technology market from the past few decades we will see:
60’s were dominated by Engineers – they started the company based on an idea. Majority focused more on Research and Development than running a company. This opened the door for the leaders of 70’s.
70’s Marketing took the lead – they focused on creating a story and understanding how to develop and grow markets. While this was important, it still left a hole in running the company. The hole was growing the top line.
80’s Sales fueled the growth – It became all about the top line and sales people took the lead. The dramatic growth was unprecedented. Yet a new hole emerged, how to make more profits?
90’s Finance took charge – Leading the way with focus on increased profitability and improving performance on the growing top line.
00’s A free for all – the economic crashes challenged financial types and Leaders of every Discipline. Financial leaders were being ousted at an alarming pace. Where were the controls? What happened? Is there a new hole?
10’s Supply Chain will emerge as Leaders – The flattening of the world, the need for eco oriented (sustainability) and opening of many new markets will require a skill set unequal to prior rivals. The balancing act will draw upon many critical aspects including:
Global Business Perspective
Customer Focused Solutions
Relationship Management (different than basic Outsourcing)
Financial Acumen and Fiduciary Accountability
Sustainability Opportunities and Carbon Footprint Reductions
Information Integration and Measurement Systems
Streamlining and Simplification of activities
Geographic Sensitivity to Cultural Challenges
The next ten years will see companies being lead more and more by Supply Chain Executives. The Supply Chain Officer will be called upon to simplify the complexities of Globalization and increase the visibility and controls to shorten supply chains. They will be required to solve across Business Units, Functions, and Geographies in order to deliver an increasingly more visible, less restrictive supply lines that must cost less and deliver more. A tall order for any role, but the most suited for success will be those that understand that the norm will be change and the need to constantly relook and shake up the supply lines in order to fundamentally stay fresh and nimble.
Contributed by: Pete Pazmany
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Industry Trends
Manufacturing Execution Systems (MES)
Compliance is a driving factor in MES adoption
Since Congress passed the Food Safety Modernization Act last December, the industry is beefing up their adoption of Manufacturing Execution Systems (MES). These systems have evolved from simple spreadsheets to track materials that went into producing a product to customized home grown production control systems. None of these "legacy" systems have been designed to support the new regulations. This has resulted in a growth in companies supplying integrated manufacturing execution systems (MES) software solutions much like the previous growth spurt in Warehouse Management System (WMS) software solutions.
Why MES? Adoption of MES in the food and beverage industry will help in reducing the potential scope and cost of product recalls by improving the identification of the sources of ingredients. However, compliance to regulations is only one factor in driving MES adoption. Other factors include:
Software Maintenance Cost – Maintaining legacy systems is expensive and adapting those systems to new regulations, complexity of the manufacturing process, new products, manufacturing history, and shorter production runs all result in driving up costs.
Islands of Automation – Each stage of a manufacturing can have specific needs and they are not always automated or integrated in to the overall process. When “islands” are not integrated into the overall solution they are usually inefficient.
Workforce Experience – Workers that are supporting the current legacy manufacturing systems are retiring and the new replacements may not be interested in picking up the reigns of those obsolete roles.
Other industries should seek the benefits of MES to be able to identify the genealogy of components that went into the bill of material (BOM) in the manufacture of their product. While the construction industry may not seem likely candidate for MES, an example of its use would yield the ability to trace the history of the steel used in its construction of a bridge for a safety inspection audit or in the event of its collapse.
MES is still expensive but implementation across multiple plants or projects can make it cost effective. It may become mandatory in order to comply with new regulations and necessary to replace inefficient manufacturing processes. Many software suppliers are building libraries of tailored MES solutions to meet various industry demands so costs are projected to come down as more software companies move into this space.
Do you need help in identifying inefficiencies that could improve your bottom line? The professionals at ASIL, Inc. have over 100 years of experience in Supply Chain Logistics, Organizational dynamics, and software implementation and can help you on your path to higher profits.
Contributed by Michael Singleton
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Our Software Products
Click on the links below to view ASIL, Inc.'s MAX Partnering® self-paced software demonstrations:
Strategies and Execution - This demo depicts the tools that organizations can utilize to embrace change effectively and implement it successfully.
Self Assessment Sample Questionnaire - This demo will enable you to respond to a small sample of self assessment questions focused on change management and create a Heat Map of your responses to see areas that may need attention. The Driving Complex Change® methodology addresses the six areas of Direction, Ability, Incentive, Resources, Structure, and Action that can impact your effectiveness of change management.
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