A majority of manufacturers fail to either implement or leverage important technological advancements that can help them capitalize on the economic recovery, according to a new survey from Sikich LLP.
Given the majority of respondents who identified supply chain management as important to their companies’ success over the next five years, technology should be a tool to improve supply chain efficiency.
“An effective supply chain can help companies increase production and delivery and better manage materials, labor and overhead,” said Jim Wagner, partner-in-charge of Sikich’s manufacturing and distribution practice.
“Advanced technology and machinery can further improve potential efficiency gains from the supply chain," added Wagner. "Implementing a strong supply chain management strategy is one of the most important decisions a manufacturer can make.”
In addition to bringing the supply chain up to speed, companies need to bring technology into the measurement of KPIs. The survey found that 53% of respondents still rely on spreadsheets and other manual processes to prepare KPIs such as productivity, utilization and availability. According to the survey, which examines industry trends as well as the strategic and economic issues companies face, only 26% said they use a financial application module such as an enterprise resource planning (ERP) system for KPIs.
“In a time of rapid change, tracking accurate KPIs can mean the difference between stagnation and long-term growth,” said Wagner “The persistence of manual processes in the industry is troubling. Technology can help companies grow more efficient, lower costs and better serve customers. It has the potential to transform the industry and drive success, but companies need to make full use of it to realize gains.”
Though many companies lag on technology when it comes to KPIs, they do turn to technology to support business growth and improve customer service, according to the survey. The top ways respondents said they use technology is to improve manufacturing processes and business intelligence and reporting.
Other survey highlights include:
- About half of survey respondents are more optimistic about the U.S. economy compared to 2014.
- A majority (54%) expect their revenue to increase by more than 5% this year.
- Almost all (96% ) said they anticipate their hiring to increase or stay constant in 2015.
- Nearly 40% of survey respondents view increased share in existing markets as their top opportunity for gains in the next 12-18 months.
- Almost a third of respondents spend less than 1% of sales on research and development for new products.