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Supply chain agility and IT flexibility are keys from IFS
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06/10/2006
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Manufacturers need to invest in technology to make their supply chains more agile and responsive if they’re to compete in today’s global village.
That’s among the un-startling messages from ERP software developer IFS UK’s new managing director, Paul Massey. But he adds that they also need to look to their IT and make it more flexible to support inevitable and constant change.
He’s not being prescriptive: merely observing that as plants and businesses are bought and sold, subcontracting and offshoring mandated and moves to more service provision mooted, companies need their IT to be enabling business, not fighting with it.
“UK manufacturing is heading more towards service and distribution, with production somewhere else, and they need better systems to support supply chain agility and flexibility,” he says.
And he adds: “Having static business processes for more than a year or two is pretty unusual now. Manufacturers need to be able to take some processes out, integrate to different systems and so on. Maybe 60% of our new sales are to do with supply chains having to change – and new technology is a key enabler here.”
He also reflects on the ongoing importance of consolidation, regulatory compliance and lean thinking. “Sarbanes Oxley remains a hot topic, but not many systems are closing the loop here, so this remains a challenge,” says Massey.
“And lean to me is now part of rationalising the supply chain: companies have exhausted the potential for making their UK operations lean, so the focus is on their supply chains or outsourcing.”
As for the drive for IT infrastructure consolidation, he agrees that the pressure is on software providers to offer value for money and support. But he adds that manufacturers also need to keep on top of upgrades since these are likely to be cost reducing and business enabling.
“It’s not just about lots of new web functionality, but stopping their systems becoming old and stale – and minimising the cost of ownership,” says Massey.
IFS is now in what Massey describes as its third phase – after the initial rapid growth and period of stabilisation and cost rationalisation, the firm is now looking for double-digit growth, most but not all organic.
“Mergers and acquisitions are on the cards: we’re looking at various opportunities,” he says. “In the UK, we’ve got a reasonable market share, but there’s a lot of room for growth – although that’s not necessarily just in its chosen manufacturing markets.”
IFS is looking healthy. It has registered profits for the last nine quarters in the UK and globally, and has reported 21% licence growth for the first half of this year.
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Author
Brian Tinham
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