According to industry research, the Wire and Cable Manufacturing industry has seen a downward trend due to high import penetration and a decline in copper prices over the last 5 years. This has forced manufacturers to lower product prices so as to remain competitive, resulting in decreased revenue and lower profit margins. However, research also suggests that the industry revenue is expected to rebound over the next 5 years to 2022, as the world price of copper is expected to stabilize.
Technological and market innovation both continue to be key development drivers for the wire and cable sector. However, Legacy systems continue to be a constant deterrent for innovative product development. To meet customers’ needs in the most efficient way possible, a manufacturer may need to reinvent/enhance older products or find applications that can ensure better productivity.
Let’s take a look at how an ERP solution can help address a few of the industry’s key challenges.
Lean Production
In the present global competitive marketplace, continuous improvements have become imperative. LEAN initiatives have been introduced to offer a systematic approach to analyse the value chain in a company. Sources of wastage are discovered and eliminated in a sequence, while business processes are ameliorated to create value rather than waste. The right IT solution such as an ERP helps this process by offering the required agility for the complete utilization of resources. The industry requires the help of technology to streamline inventory management and production processes to streamline the business.
Product Diversification
With market share and financial gain being the key drivers, many cable manufacturing companies have added to the complexity of supply chain by expanding their client base or product offering to help grow and remain sustainable. A smart business will use an ERP software that provides real time reporting for a realistic and faster estimation process to support business demand as well as ensure real time integration of various business transactions. This ensures better collaboration between departments by allowing information sharing. The key to any business is to grow but grow smart.
Working Capital Optimization
A considerable share of a cable manufacturer’s current assets is typically consumed by the inventory consisting of raw materials and semi-finished goods. The trimming of inventory is therefore, an important aspect on the agenda of company’s management. Companies require clear visibility and measurement of their supply chain inventory in order to manage their inventories. An ERP solution will provide for a centralized repository for Data with real time access to ERP Data for analysis. An impeccable ERP solution must fit the cable business like a glove in a way that nothing gets lost or is unaccounted for.
Creating value for the end customers
Cable manufacturers can grow stronger by reaching out to their end customer by obtaining a clear understanding of their needs. This way they can develop products that create real value. This gives them a competitive advantage and places them in a better negotiating position in the market. However, an innovative ERP solution is required to respond to the ever-changing customer demands and to embed these demands into the supply chain of the company by providing effective forecasts of Cash Flows for future planning.
Efficient Risk Management
The cable industry invests a lot of capital to earn moderate margins. This is a common scenario for any conversion industry. Additionally, this capital is largely captured in commodities with highly volatile prices like copper and aluminium. Cable manufacturing firms must leverage a suitable ERP solution to effectively manage the risks of price volatility. This solution should also be able to eliminate difficulties in managing base fibre. The right ERP solution for cable manufacturers will provide clear insights about the risks and offer tools to proactively mitigate these risks and difficulties thereby leading to industry-leading levels of production.
A solution is required to replace the mixture of ad-hoc legacy systems with an integrated solution that can manage operations across a number of countries and business units to increase operational efficiencies. It is thus the need of the hour to harness the available support from a suitable ERP such as Epicor ERP to thrive in today’s business world, seize opportunities and have a greater chance at success.
Please read the Fact Sheet for further information – https://goo.gl/yDXSc2
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