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How The ‘Amazon Effect’ Is Impacting MTO Manufacturers

How The ‘Amazon Effect’ Is Impacting MTO Manufacturers

By making and delivering customised products—whether through mass customisation or other make-to-order (MTO) processes—manufacturers may feel shielded from another prevalent market trend: the so-called Amazon effect. After all, if you’re manufacturing precisely the personalised product that buyers want, why would they go elsewhere?

The truth of the matter is, however, that business buyers increasingly expect a purchasing experience that’s as close as possible to that of a consumer—one that’s based around ‘me’ and ‘now’. This is a bi-product of our ‘have it all now’ culture of instant messaging and one-day, or even one-hour, deliveries.

Buyers want to be able to research, order and configure items online—with no need to phone up or exchange emails. Then, once the order has been placed, they want to be able to track its status online—and receive it by the promised delivery date.

Easy to do business with

No matter how specialised or customised the products an MTO manufacturer makes, that may no longer be enough to retain customers. The additional challenge is to be as easy as possible to do business with.

That means having the agility to react quickly to new customer requests and orders. Improving day-to-day processes—such as increasing productivity through better matching required resources with demand and developing a more responsive supplier network—can deliver meaningful improvements in production scheduling that translate to shorter delivery timeframes.

Above all, it means giving customers the buying experience they want, to drive customer loyalty and win new business. A study from Salesforce found that 81 percent of business buyers say that the experience a company provides is as important as its products and services. Three quarters (77 percent) are ready to share good customer experiences with others; and 74 percent will actually pay more to get a better customer experience.

Capitalise on the Amazon effect

MTO manufacturers looking to capitalise on the Amazon effect to boost business should consider:

  • Providing online capabilities for customers to design and configure products, as well as place and track orders
  • Ensuring teams can respond quickly to customer queries at any time

One way to make great strides is to implement a manufacturing-specific enterprise resource planning (ERP) solution that’s designed to help you provide customers with Amazon-like self-service capabilities.

Rainier Industries, a manufacturer of custom-made display, shade and shelter products, relies on Epicor ERP to automate customer orders and improve the customer experience by accelerating time-to-delivery. Rapid growth meant it could not hire new customer service team members at the same rate that new orders were being placed. This left many employees not doing their intended job of offering customer service, but instead being inundated with order entry requests. The company can now process online orders helping to increase sales and drive revenue growth.

ERP has the power to incorporate eCommerce functionality and create configurator portals, as well as empower teams to answer customers’ queries at any time, from any location. Furthermore, customer relationship management (CRM) capabilities provide a 360-degree view of each customer relationship that puts customers at the center of a business’s objectives—just as they expect.

By Mr Vincent Tang, Regional Vice President, Asia, Epicor


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Interview With Andy Coussins, Senior Vice President And Head Of International Sales, Epicor

Interview With Andy Coussins, Senior Vice President And Head of International Sales, Epicor

Asia Pacific Metalworking Equipment News is pleased to interview Andy Coussins, Senior Vice President and Head of International Sales, Epicor Software Corporation regarding Epicor’s achievements for 2018, the company’s aims for 2019 and the trends that will shape the industry next year.

1. Can you sum up Epicor’s focus and achievements in 2018?

Globally, we had a good year in 2018, and we expect the momentum to continue next year. One of our major achievements in 2018 was our announcement of an expanded strategic partnership with Microsoft that allowed us to deliver enterprise-class solutions globally in the public cloud leveraging the Microsoft Azure platform. For customers, choosing Azure means more reliability, faster access to innovation, less disruption, greater ability to scale, and higher performance. Running Epicor ERP on the world’s most trusted cloud platform makes it even easier to focus on driving business growth.

We have also had two updates to Epicor ERP this year. The latest version of Epicor ERP supports omnichannel commerce strategy for manufacturers and dealers, and Epicor Kinetic Design is a three-pronged common cross-platform user experience (UX) framework.

2. What are your expectations on the regional economy in 2019?

I believe we will continue to see companies expanding their operations, particularly in Southeast Asia, where a higher growth path can be expected for 2019. This is coupled with the strong economic integration through the continued focus and commitment of the ASEAN nations to the AEC Blueprint which is aimed towards achieving the vision of having a highly integrated and cohesive economy by 2025.

I also see the expansion of the digital economy in this region particularly around the convergence of communication networks and increased connectivity of devices. The increased use of ICT in manufacturing and services will continue to be a big enabler of growth and that will help boost the economy of the region.

3. What business trends in Asia capture your interest for growth next year?

Asia, and particularly Southeast Asia, plays a very important role in the global economic landscape. The region is expected to become even more competitive as an industrial centre with deeper regional economic integration. This will be brought about by the ASEAN Economic Community focus on increasing trade and investment, integrating MSMEs in global value chains, and developing an innovation-driven economy.

The focus on digitisation, especially for manufacturers, in this region will be an opportunity for all. About 40 percent of the industrial companies in Southeast Asia rate their level of digitisation as high – it is believed that this will rise to 69 percent in the next five years.

Coupled with fast moving global markets, Southeast Asian manufacturers need to respond quickly to changing demands to maximise new market opportunities. Our product vision is designed to drive industry forward with an intelligent business platform primed for global customers to embrace cloud, IoT, mobility, and predictive analytics—likewise, we strive to be ahead of the curve on trends like artificial intelligence (AI), blockchain, and machine learning, so we can help our customers embrace them when they are ready.

The unique strengths of the Epicor industry-specific ERP platforms are underpinned by a modern service fabric and topped with cross-platform applications that enable our customers to achieve digital transformation and raise the bar for automation, analytics, and customer experience.

Innovative ERP solutions, combined with Industry 4.0 developments, are already helping to automate production lines, streamline supply chains, and provide the intelligent data manufacturers and distributors need to react quickly to changing consumer demands. One example include what Epicor customer Cladtek Singapore  is doing to embrace these trends.

4. What do you think is the key industry trend to watch out for 2019?

Manufacturers in Asia, and mainly in Southeast Asia, are beginning to understand the business imperative of the Internet of Things (IoT), as well as artificial intelligence and data science. Done right, Industry 4.0 will enable them to improve efficiencies whilst reducing costs.

By 2020, there will be 30 billion connected devices on earth. This is leading to a Big Data mountain growing beyond recognition. Machines communicating with people—and other machines—are creating so much data that we have generated more in the past two years than in the previous 5,000 years of human history.

5. What potential and opportunity do you see in the industry next year?

There’s solid proof that prioritising technology will help businesses grow. This year, Epicor delivered its second Global Growth Index, and discovered that around the globe, manufacturing businesses are showing healthy signs of growth.

In Singapore:

  • 69 percent of companies said they’d experienced growth in sales/turnover in FY18
  • 64 percent said they’d experienced growth in their product range in FY18
  • 71 percent said they’d experienced growth in profits in FY18
  • 67 percent said they are experiencing growth in exports/overseas sales in FY18
  • 50 percent said they’d experienced growth in their workforce in FY18
  • 67 percent said they’d experienced growth in geographic coverage in FY18

The report also showed 2018 saw up to 3.7 percent year-on-year business growth worldwide.  Global growth rates were impressive—with the proportion of businesses that have reported an increase in their sales/turnover up five percent, and with three percent more businesses experiencing profit growth, as well as product range growth, compared with the previous year.

Overall, more than a third (36 percent) of all businesses agree that investment in IT is a high priority. But interestingly, the prioritisation of technology investment, when comparing companies with high and weak growth, differs starkly—the figure rises to 57 percent among those experiencing strong growth, but drops to just 20 percent among companies with weak growth. It is therefore conclusive that, per the results of the Global Growth Index, companies that consider technology investment as critical to their strategic growth are reaping the benefits.

Technology is, after all, crucial to overall business growth in the manufacturing sector because it provides leaders with vital insight into their business operations, enabling them to make better decisions faster. Technology can also automate otherwise manual tasks, freeing up employee time—valuable to a growing company with a stretched workforce.


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The Megatrends That Push Manufacturers Towards Industry 4.0

The Megatrends That Push Manufacturers Towards Industry 4.0

Disruptive technologies and megatrends are shaping the future of manufacturing. The fourth industrial revolution has been gathering momentum in recent years and is set to be transformative for Southeast Asian manufacturers. Industry 4.0 refers to the digitisation of the manufacturing industry, and a realisation of the potential of the Internet of Things (IoT), combined with artificial intelligence and data science. Done right, Industry 4.0 will enable manufacturers to improve efficiencies whilst reducing costs. By Vincent Tang, Regional Vice President, North Asia, Epicor.

THE industrial revolution is far from surprising. By 2020, there will be 30 billion connected devices on earth. This will lead to the creation of a big data mountain that would have grown beyond recognition. Machines communicating with people as well as with other machines are creating so much data that we have generated more data in the past two years than in the previous 5,000 years of human history.

It is now up to manufacturers to unlock the potential of this data. The information generated by the increase numbers of connected devices and machines represents a significant opportunity. By determining how to best identify, capture and interpret this increased volume of data, it can help organisations understand their market and customers better, as well as gain market share.

Southeast Asia alone accounts for five percent of global manufacturing activity, and with deeper regional economic integration brought about by the establishment of the ASEAN Economic Community, it is poised to become a more competitive industrial centre. Two fifths (40 percent) of the industrial companies in Southeast Asia have already rated their level of digitisation as high, and this value is expected to rise to 69 percent within the next five years.

Manufacturers in Southeast Asia have an opportunity to leapfrog ahead of those in developed economies because they have fewer legacy issues such as outdated systems, processes, and technological capabilities that need to be addressed.

In today’s fast moving global markets, Southeast Asian manufacturers need to respond quickly to changing demands and maximise new market opportunities. From all indications, we are in an era of significant convergence, where information technology, operational technology, and global megatrends are on a collision course. This will drive changes in how we do business and how we interact with customers and suppliers.

Megatrend #1—Demographic Shifts

We are witnessing population growth in some nations and shrinkage in others as well as a growing middle class, consumer markets shifting from the west to the east and an ageing population with fewer people entering the manufacturing field.  Take heart though as the technology we are developing continues to make it easier to collaborate and is helping to attract the discerning millennial generation, which is anticipated to account for 75 per cent of the global workforce in 2025, and will play an important role in manufacturing as it continues to evolve.

Megatrend #2—The Globalisation Of Future Markets

Companies will expand their operations globally, with worldwide exports expected to triple by 2030. Exports from emerging and developing countries will quadruple, and regional and bilateral trade agreements are likely to further open the world’s borders. The share of GDP generated by the BRIC (Brazil, Russia, India, and China) countries will grow. Sub-cluster countries comprising Mexico, Indonesia, Nigeria and Turkey (MINT) and Mexico, Indonesia, South Korea, Turkey (MIST) are in a position to outperform the advanced world. Technology will continue to be a big enabler of globalisation. Not only through eCommerce and the opening up of additional markets, but also with regards to having enterprise resource planning (ERP) systems in place to support cross-border trading and multi-country manufacturing processes.

Megatrend #3—Scarce Resources

Due to increased energy use and requirements, we’re going to need more power. Resources are growing scarcer despite the focus on climate change and sustainability, and there will be continued reliance on fossil fuels. The majority of critical raw materials will be likely supplied by China by 2030, and certainly by countries outside the US and Europe. This could potentially be mitigated by innovative recycling technologies, and using technology platforms to streamline processes and improve efficiency so as to facilitate this shift.

Megatrend #4—Knowledge And Gender Gap

Manufacturers will feel the challenges incurred by a decreasing talent pool. As there may not be enough skilled people to perform the jobs of the future. The available pool of workers will likely come from developing countries as we see greater percentages of the population earning post-secondary degrees than their more developed counterparts. An ever increasing mobile workforce will continue to present challenges to employers and may lead to a global struggle for talent. Their wants and needs are very different to those of the generation before. Attracting millennials requires enhanced mobility, technology that meets their expectations with a sophisticated user experience and having more flexible working patterns than ever before.

Industry 4.0, ERP And The Transition Ahead

These four global megatrends, when combined with new and converging technologies, will require manufacturers to transform themselves. We are quickly entering an era of a new type of customer, a global customer who could be based anywhere in the world rather than in the countries that manufacturers have traditionally traded with. This new customer is more mobile, more aware, and more demanding.

In addition to the changing demographic of customers, new game-changing business models will cause continued disruption. Just take a look at what Uber has done to the taxi industry, Airbnb to the hotel industry, and Amazon to the retail sector. The frantic pace of change in every industry demands business owners to adopt new ways of thinking and execution.

There is a tremendous opportunity for manufacturers. However, it can only be realised by using emerging information technologies like social, mobile, analytics, and cloud alongside operational technologies like sensors, machine-to-machine communication, additive manufacturing, and robotics.

Industry 4.0 challenges the way that manufacturing, which is at its very core a risk averse sector, functions with centralised and offline systems that are not interconnected. We would further predict that their factories will soon evolve to become ‘smart’ with the capability to self-manage issues and internal processes.

Crucially, manufacturers need to address whether their existing ERP environment is ready to support their journey towards Industry 4.0.

For manufacturers, growth in an Industry 4.0 environment will be intrinsically linked with a business’s ERP system. Certainly, the boundaries between production and management must disappear, and ERP and manufacturing execution systems (MES) must form an integrated unit if businesses are to realise the growth opportunities presented by this new age of intelligent manufacturing. Taking a critical look at the existing IT environment in your business is the first step towards understanding how ready or unprepared you are for Industry 4.0.

Interview With Mr. Vincent Tang, Regional Vice President Of Asia In Epicor

Interview With Mr. Vincent Tang, Regional Vice President of Asia in Epicor

Asia Pacific Metalworking Equipment News is pleased to conduct an interview with Mr. Vincent Tang, Regional Vice President of Asia in Epicor on his views on Industry 4.0 megatrends in Southeast Asia.

1. In your opinion, what are the top three megatrends that are shaping Industry 4.0 in Southeast Asia?

Industry 4.0 is a hot topic in Southeast Asia, North Asia as well as regions outside of Asia such as the U.S. The term originated in Germany and is known by different names globally. For example, in China it is known as “Made In China 2025” and in the U.S it is known as smart manufacturing.

The trends shaping Industry 4.0 does not just involve ERP systems, it involves manufacturing execution systems, the extraction of data and its translation into meaningful information, big data, product lifecycle management (PLM) and the integration of robotics into processes. This means that Industry 4.0 is a long journey and companies begin their journeys at different points. For example, some companies may begin first with the implementation of an ERP system while others may not.

In Southeast Asia, Industry 4.0 is encouraged by government support through means such as grants and funding. This has allowed the region to advance in terms of the manufacturing technologies.

2. What are the key challenges that prevent manufacturers in Southeast Asia from digitalising and integrating artificial intelligence as well as data science into their manufacturing processes?

Retaining and attracting talent is the top challenge that prevents manufacturers from digitalising. In factories that are not fully automated, factors such as the increased amount of paperwork and high surrounding temperatures and harsh external environments may contribute to staff turnovers.

Additionally, the integrated implementation of automation is a challenge to some manufacturers in the region. This can occur because manufacturers may implement automation as a phase by phase process instead of as an integrated solution. For example, the accountancy department may be automated first before the inventory control department is automated.

Finally, manufacturers may find it challenging to successfully implement ERP systems. This could be because the successful implementation of ERP systems involves more than one key user, as it is a team effort. One that involves more than monetary investments and individual contributions. For mid-market companies, they possess limited ERP resources and budgets for ERP implementation and also require ERP systems to be installed in a short period of time – typically within six to nine months. These companies also tend to require flexibility.

3. How do you suggest that the above challenges be solved?

Departments can be integrated to increase the opportunities for rapid decision making and for different issues to be highlighted.

Productivity can also be increased due to the shortage of labour globally, especially in China which is also the largest manufacturer in the world. Although labour costs in China used to be lower, factors such as the one child policy has caused labour shortages and increased labour costs. While in Southeast Asia labour shortages are less severe and labour costs are cheaper, as in the case of countries such as Vietnam, Indonesia and Thailand.

Overall, the solution that is applied needs to be an integrated end to end solution. For example, processes that range from manufacturing to scheduling to finances have to be integrated. The solution that is applied has to also be multi-dimensional, multi-language based and focused on multi-localisation. This is because of the differing regulations in different countries that would require localised solutions to cater to it.

4. In 5 to 10 years time, how do you think the manufacturing industry in Southeast Asia will evolve?

The industry will continue to grow. This is because of the China-US trade war, as a lot of manufacturing companies are considering subcontracting their manufacturing operations to countries outside of China, such as Vietnam, to overcome restrictions when it comes to exporting to the U.S. This can be seen in the case of South Korean manufacturer, Samsung, which has moved its operations to Vietnam.

Thus, in Southeast Asia, manufacturing will continue to grow and this will be facilitated by Industry 4.0 and infrastructural developments such as the Belt and Road Initiative that will connect Bangkok and China via a high speed train.

5. What are your thoughts on the Industrial Transformation Asia Pacific event? Do you think this is the right time for an event like this?

The event occurred at just the right time. Different countries are at different stages of their development and the delegates that attend the event are keen to find out how they can engage in Industry 4.0 and where they are in their journeys towards Industry 4.0.

The event has also attracted over 1,800 registrations and I am able to meet a lot of individuals from Indonesia, Thailand and China. Everybody is working around the concept of industrial automation and it involves areas such as PLM, big data, manufacturing execution systems (MES), robotics, ERPs and integrated solutions.


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Bringing Industry 4.0 To Life

Bringing Industry 4.0 To Life

The manufacturing world has already decided to get on board the Industry 4.0 bandwagon. But where exactly is this wagon going to take us in a world that is getting very interconnected as we speak? Craig Charlton, SVP, Asia Pacific Operations, Epicor gives us the lowdown 

Manufacturing has come a long way since the Industrial Revolution in the 18th Century. The second Industrial Revolution in the 1900s saw the introduction of mass production. In the late 1960s, electronics and the automation of production lines entered the industrial environment. Now, we are benefitting from robotics and are beginning to discover the value of 3D printing. We are on the cusp of Industry 4.0 or the fourth industrial revolution.

Over the next decade, Industry 4.0 will emerge to meet consumer demand for tailor made products at affordable prices – from mobile phones, to cars and from household goods to wood ceiling installations. At the same time it will give manufacturers access to highly flexible mass production processes that can be rapidly adapted to market changes.

This will happen by marrying the world of production and networking in an Internet of Things (IoT) environment. Enterprise resource planning (ERP) will become even more central to production in this environment. The ERP system will become the backbone to the network; connecting smart machines, logistics systems, production facilities, sensors and devices as products and machines communicate with each other and exchange commands as products move the production line.

ERP vendors need to move away from pre-built interfaces and formulas to develop highly connected systems that conduct operations at the production line level, whilst giving business decision makers the real-time data they require. So what would this ERP system look like, how exactly would it behave and how should we go about embracing systems like it?

The Industry 4.0 ERP system will fully integrate with manufacturing execution systems (MES). As a result, it will be possible to track and document the transformation of raw materials through to finished goods.

Taking a bottling plant as an example, each bottle will have a RFID chip for the manufacturing process. This will contain all of the information about the product including the drink that will go in the bottle, the label it needs and the lid colour. When the bottle reaches the first workstation in the production line, the RFID chip will send a message to the MES, which will direct the machine to fill the bottle with the correct liquid. Once complete, the action will be registered on the RFID chip and the bottle will move onto the next work station.

With this level of intelligent connectivity, the ERP will be able to process production analytics data and line status reporting. Sales teams and management staff will be able to access this real-time information via an ERP dashboard to optimise conditions on the plant floor and improve orders and production output as well as inform sales processes and business forecasting.

Industry 4.0 means we will need to access ERP in new ways. In recent research 65 percent of business decision makers said that mobile access to ERP will become increasingly important, with 43 percent wanting that access through their smartphone and 38 percent via a tablet device.

The ERP for Industry 4.0 will allow employees to network around projects, using the system as a social collaboration tool. According to research over half (57 percent) say this will be beneficial in terms of customer and supplier communication as staff will be able to use the ERP to share knowledge and find solutions to problems on a project-by-project basis.

ERP will act as a single source for business intelligence in the age of Industry 4.0, presenting business decision makers with know-how, context or benefits, when they need it. An intelligent Industry 4.0 factory will, for example, remove the data discontinuities between a customer order and the production scheduling/ raw materials process, allowing all elements of the business to benefit from its data – whether that’s sales teams or production.

In order to benefit from the ERP systems of Industry 4.0 already today, businesses can follow these simple steps

Analyse current ERP use:

If your business is already using ERP, it’s time to think about how it fits with your business. How many users engage with it? Can this be improved with training? Is it time to start using ERP on mobile devices to take utilisation to the next level?

Embrace the latest technology:

When it comes to manufacturing, the industry is currently benefitting from exciting new innovations. 3D printing is already starting to change how we make things, as manufacturers use the technology to build models before production begins. Using the latest technology will help prepare a business for Industry 4.0 and its ERP.

Set goals:

As with any new implementation, it’s important to set KPIs. Measuring the effects of the new ERP will help businesses to understand its benefits and ROI. In Germany, the National Academy of Science and Engineering has estimated that Industry 4.0 could lead to a 30 per cent increase in industrial productivity, so if a business is able to meet the challenge of Industry 4.0 with an integrated and intelligent ERP at its core, it can expect to benefit significantly.

Collaborate across all business departments:

To get the most out of ERP in the world on Industry 4.0, businesses need to start sharing their knowledge across departments now. For example, knowledge of sales targets can improve the performance on the production line and stock data can help manage delivery planning.

The fourth Industrial Revolution hasn’t been fully embraced by the manufacturing world yet but when it does, we will see intelligent factories, with machines and products cooperatively driving production. Those businesses that have the technology – and processes – in place to optimise the new environment will thrive and we can expect ERP to be the glue pulling all operations together.


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Epicor: IScala 3.1

Epicor: iScala 3.1

The new version of Epicor’s iScala ERP introduces both online and offline mobile application for Google Android and Apple IOS.

The iScala 3.1 software’s key features and enhancements include: continued security enhancements in the Epicor Service, connect integration and business collaboration platform, new capabilities in the Electronic Compliance Platform designed to deliver structured output reports, and the introduction of mobile applications that simplify key operational tasks.

All iScala routines now run in a single application window, making it easier to see what is running, and also to switch between different areas.


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