5 Must-Dos for Manufacturers in 2023: Spending. Retention. Efficiency. Investment. Automation.

As we close out Q1 2023, let’s look at trends driving industrial manufacturing and consider how they are playing out.

1. Increased Focus on Spending (Less)

With economic uncertainty still peeking around the horizon, prudent manufacturers are cutting costs whenever possible–business travel and conferences, for example, are being scaled back.

Organizations are also looking to consolidate necessary spending in search of volume discounts while leveraging flex labor to cover talent gaps without long-term commitments.

source: Coupa

Balancing spending reductions with investments, especially in new technology, is a balancing act for senior management. In fact, 90% of CFOs recently surveyed by Coupa cited increased struggles to maintain a competitive edge, exacerbated by trade offs between cutting costs and investing in growth. 

2. Talent Management

Finding savvy IT talent (especially SAP talent) has always been a challenge, even more so in today’s hyper-competitive hiring environment. Attracting, retaining, and investing in human capital will continue to be a central business concern throughout 2023. Even as margin pressures mount, 87% of surveyed CFOs see layoffs as an unsavory temporary fix–that creates long-term issues. Retaining existing talent and training for skill gaps are key initiatives to minimize the impact of voluntary and involuntary turnover.

Skill gaps are being created not just by new technologies and resignations, but by experienced workers retiring. In fact, addressing the skill gap was the larger driver of HR technology strategy in a recent SAP Insiders survey.

3. Strategically Invest for the Future

Even with uncertainty ahead, businesses that don’t invest for the future will find themselves less competitive and with higher costs. Smart investments will drive efficiency and automation–which pay dividends with lower ongoing costs.

This can be digital transformation projects, investing in smart factory technology, or even automating quoting and eCommerce capabilities. For example, investing in an SAP-integrated asset management system not only provides real-time equipment status, while also allowing for centralized and controlled purchasing of IT assets.

Maintaining a competitive advantage means balancing internal pressures, external threats, and global uncertainty. Leaders surveyed ranked their near-term concerns, showing a shift away from supply chain instability, but increased pressures on margin, profitability, and human resources.

source: Coupa

4. Drive Efficiency (Which Drives Margins & Profitability)

53% of finance leaders say increasing efficiency is a top profitability-boosting strategy–but that same number are concerned about accomplishing it. And 52% of respondents said increasing digitization was key to improved profitability. For manufacturers, it’s critical that all front-end systems (CRM, commerce, quoting, etc.) leverage data and logic built-in to SAP, rather than replicating, or duplicating that information. 

For example, configurable products should be available inside your commerce portal alongside standard SKUs. Leveraging SAP Variant Configuration logic and pricing, inside your commerce solution, is an easy way for hands-free ordering that is also 100% accurate. (Hint: look to enosix for a pre-built, pre-configured SAP VC solution that makes integrating this powerful functionality code-free.)

5. Leverage Automation

Investing in automation technologies on the manufacturing floor increases output and throughput. Investing in SAP process automation a drives a similar increase in staff productivity. Minimizing, with the goal of eliminating, manual interactions means fewer errors, faster customer response time, and more accurate quotes and orders. 

Empowering customers and distributors will full-service portals that show real-time SAP data means staff can now focus on driving revenue, and profitability instead of answer questions about order shipments.

Let’s talk about how to use the data and business logic inside your SAP ERP to drive efficiency and profitability.