Cloud Technology for a Competitive Manufacturing and Exporting Industry

Cloud Technology for a Competitive Manufacturing and Exporting Industry

The Australian manufacturing industry has undoubtedly contracted when compared to other booming sectors in the past two years. Due to this fact, many manufacturers are leading their industries by implementing more efficient and automated systems to not only support their individual growth but to allow them to scale without increasing overheads in an industry where margins are falling.

While MRP software has been around since the 1960’s and has gone through generations of technology upgrades, and system advances, its core the business use case of the software is still to increase efficiencies in ordering and procurement, streamline workflows on the shop floor, and provide more accurate data around demand and supply planning. Manufacturers with a single system that supports their businesses from end-to-end have a strong market differentiator. These innovating companies can get a clear picture of past, current and future performance and make educated decisions that ultimately save time, money and resources.

Australian manufacturing industry’s undeniable decline.

Over the past ten years, Australia has seen an undeniable decline in the performance of manufacturing compared to other industries. What does this mean for key Australian industry players that are exporting to Asia and Pacific region?

It means that businesses in this market need to pioneer new and better ways of managing their customers, their accounting, their systems and their operations, or they will face continued erosion of their bottom line.
A paper by economists Georgeson and Harrison,  states that manufacturing is still an essential part of the Australian economic growth plan. It produces $100 billion of output each year, ranking sixth among ANZSIC industries. Manufacturing accounts for over 930,000 jobs. The manufacturing industry is in the middle of a much-needed structural change, as it is in most developed economies.

However, we still see a decline in overall output in percentage terms. This lower percentage does not mean the industry is falling; it only shows that it is growing less than the rest of the economy. Therefore, there is a door open for manufacturers that want to differentiate in their business from the competition.

Manufacturing and exporting are rebalancing says economist Julie Toth: “In the last ten years, Australia switched to produce more consumables and fewer heavies.” There are growth pockets in products and services including food, beverages, groceries, specialist machinery, pharma, cosmetics, vitamins, supplements, building materials, textiles and furniture.

23% of the industry had moved to Advanced Manufacturing by 2013. Advanced Manufacturing or Industry 4.0 is the ability of companies to capture customers’ needs and transform them into products quickly through the use of integrated systems, sensors and technologies.

These leading companies combine the competitive advantages of a multidisciplinary team and digital transformation. The market niches in which they compete have low volumes. These smaller niches require a specialised service that offers quick response, cost-and value competitiveness and after-sales support.
China, South Korea and Japan need support to fulfil their demand for efficient buildings, sustainable energy, and new transport infrastructure. These cities offer excellent international trade opportunities for innovative manufacturers.

The specialisation of the industry will lead the way in manufacturing for Asia and Pacific markets. Australian’s technology and engineering skills can respond to the region’s rapid urbanisation. Over the next decades, there will be an incremented demand in the Asia trade for specially-designed and custom goods. Gregory O’Brien, Australian Government’s labourer, in his paper “Australia’s trade in figures,” said eight of our top ten markets are in the Southeast Asia region: China, Japan, South Korea, India, New Zealand, Singapore, Malaysia and Taiwan. 

Australia’s top ten export markets.

  • 1. China.     AU$ 91 297 millions 28.8% 28.8%
  • 2. Japan.     AU$42 355 millions 13.4% 13.4%
  • 3. United States.     AU$22 114 millions 7.0% 7.0%
  • 4. South Korea.     AU$20 014 millions 6.3% 6.3%
  • 5. India.     AU$3 574 millions 4.3% 4.3%
  • 6. New Zealand.     AU$12 577 millions 4.0% 4.0%
  • 7. Singapore.     AU$11 044 millions 3.5% 3.5%
  • 8. United Kingdom.     AU$8 815 millions 2.8% 2.8%
  • 9. Malaysia.     AU$7 966 millions 2.5% 2.5%
  • 10. Taiwan.     AU$7 479 millions 2.4% 2.4%

Technology relieves complexity and supports exporting through automation and systemisation.

Companies exporting to the Asia Pacific region know well that the process takes time and requires high and continual investment. If supported by robust domestic demand, exporting it’s a noble path of growth with a substantial return.

The export path requires strategic controls that allow managers to lead and adjust the supply chain quickly to different market demands. Australian Business models may be unfitting in other countries for cultural, regulatory, and other reasons.

Modern cloud systems provide levels of control and flexibility that have not been easily achievable in legacy on-premise MRP solutions. These systems improve operational efficiencies and provide a robust framework to ensure the business can grow and expand, while still have full visibility on the overall performance of each area of the company. 

ERP systems are essential for any business that is wanting to scale in the manufacturing sector. With the complexities that arise when considering the transactional relationships between inventory, procurement, panic and preventative maintenance, multi-location warehousing and distribution, foreign currencies, taxes, laws, languages and many other global preferences.

“Manufacturing businesses should focus on centralising their data in the cloud and making it easily accessible by users in different locations and satisfying different roles and responsibilities within the organisation.” Said Klugo’s consultant, Michale Dean.

Companies with systems operating in silos will spend countless resources on communication technology to connect their databases with APIs and integration. While these types of solutions may get to the point where they are working, there will always be added risk with an increase in the number of software vendors a business’s needs to deal with on a day to day basis. Also, the ability to report across siloed systems means data is rarely live, and often inaccurate. 

In contrast, Cloud ERP solutions, such as NetSuite provide a single platform technology which eliminates the need for integrations, offers live and accurate data and does it in a way designed for delivery over the internet. 

Download NetSuite Guide for Manufacturers

Find in this guide all the modules and technologies integrated into NetSuite, the cloud-based ERP that can support your growth.

Investing in dynamic systems from the start gives a manufacturing company an edge over the competition in an increasingly competitive space. It is smarter to start with the right platform than trying to move into it in the future.

Also, for modern manufacturers involved in exporting, ERP software provides a lot of digitally transformative opportunities to automate and simplify global trade and investment with full automation and support of multi-company, multi-entity, multi-currency and multi-language requirements. 

NetSuite has customers all over the world, and a particularly strong following in manufacturing from the European Union, Hong Kong, and Southeast Asia.

NetSuite Manufacturing Edition is a fully featured solution to cater to the needs of a growing manufacturer. The platform provides a single solution that includes: 

  • Sales and CRM Management.
  • Accounting and Financial Control.
  • Advanced Inventory and Demand Planning.
  • Warehouse Management.
  • Import-Export
  • MRP functionality to manage Work Orders.
  • Complex WIP and Routings.

Need a specialist’s free advice?

NetSuite has thousands of clients all around the world, who have made extensive use of the sophisticated functionality that is on offer for a growing manufacturer. To find out more about how NetSuite can support your growth, contact Klugo today.

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GABS Beer, Cider and Food Festival Highlights 2018

GABS Beer, Cider and Food Festival Highlights 2018

The Best of GABS 2018

GABS 2018 was held in Melbourne on 18-20th May and our Marketing team couldn’t resist the opportunity to check it out, do a little industry research, and of course support our Aussie craft brewers. It’s safe to say that the beer, cider and food festival did not disappoint! The annual  GABS ‘specTAPular’ was held at the Royal Exhibition Building, and was packed with entertainment and more beers than we could ever dream of tasting – not forgetting the Yenda Ferris Wheel (the only ever indoor ferris wheel at a festival), a Stomping Ground ‘Broolander’ silent disco, Milawa cheese and prosecco bar, Holey Moley mini golf, beer hall games, and street food stands galore.   GABS boasted 170+ beers and ciders made exclusively for the event, with brewers across Australia and New Zealand embracing the opportunity to be creative, push boundaries, and show off their talents. Many of the beers and ciders exhibited were unique, one-offs, with a selection of tasting paddles made up of the limited release beers for the crowds to enjoy.  

Snapshot of Top Five GABS Hottest 100 Beers 2017

  1. XPA – American Pale Ale (Balter, QLD)
  2. Pacific Ale – Australian Pale Ale (Stone & Wood, NSW)
  3. Crankshaft – American IPA (BentSpoke, ACT)
  4. Newtowner – Australian Pale Ale (Young Henry’s, NSW)
  5. Single Fin – International Pale Ale (Gage Roads, WA)

Find out More

If you’d like to find out more about how we help growing craft breweries, please download the brochure below or get in touch.  

Top Three Cashflow Tips for Craft Breweries

Top Three Cashflow Tips for Craft Breweries

If there is one business goal that a growing craft brewery needs to focus on, it’s this: don’t run out of cash.

In recent years, the craft brewery industry has seen increased demand and competition. More microbreweries are entering the market, with even more regional breweries expanding nationally.

As with any manufacturing business, the pressure to ensure steady supply and maintain growth is important, but the ability to optimise inventory control and production planning is critical.

The nature of cashflow in craft brewing can mean that it’s often delayed. Whilst a sale might be recorded, it could be weeks (if not months) before the cash for the transaction physically hits the bank account for reinvestment.

Similarly, breweries require high levels of capital investment to get started, which can include facilities, equipment, vehicles, and more. This often means that a growing brewery is running on a very tight budget, and not having the ability to report live on the impacts of decisions and transactions presents a high level of risk.

So, what can you do to better control your cash?

There are three main ways that a brewery can better control their cash.

 

1. Accounts Receivable

The impact of your invoice terms have a huge impact on your cashflow, because this dictates when customers are required to pay. Negotiating these terms with customers should be done carefully, with a balance struck between removing barriers to sales, whilst optimising your cashflow for reinvestment.

Similarly, by working with your customers to decrease late payments (or even incentivise for early payments) could be the most straightforward way to improve your overall cashflow. This also means that you can reinvest into the business more quickly and regularly.

Takeaway: Do you have visibility over your “average debtors outstanding” trends? Do you have brewery management software systems in place to automate payment reminders or overdue notices? Could you benefit from a system that would allow you to do this?

 

2. Inventory Control

When speaking to our customers, better inventory control and the ability to automate demand planning and purchasing are two of the key drivers to looking into upgrading their existing brewery management software. Most businesses have progressed from spreadsheets to basic inventory management/warehouse management but have never built the link between sales, inventory, warehousing and accounting and finance. By streamlining this flow of information, brewery owners can make better decisions about purchasing, inventory min max policies and stock on hand.

Takeaway: Does your system allow you to automate demand planning based on sales pipeline, historical sales or upcoming marketing initiatives? If not, you might be missing a huge opportunity to make your cash work harder for you, and minimise waste and lower inventory holding costs.

 

3. Accounts Payable

Cashflow is key for any business, and your suppliers are no different. As a brewery grows, it gains more traction with its key supplier base, which provides an opportunity to build on the relationship – and potentially gain better contract terms. This could include price breaks for high volumes, or discounts for paying early.

If your wholesalers are anything like you, they will value the opportunity to be paid quickly, because it helps them reinvest into their own businesses. Many brewers find that once they have reached a certain size, they have been able to negotiate additional “early payment” discounts of between 1-2% depending on what they’re purchasing. There is really no easier way to lower your COGs, and what might initially seem like a small amount invoice by invoice quickly adds up and goes straight to the bottom line.

Takeaway: Are you able to see dashboards for your vendors? Can you quickly and easily see how much you’ve bought, purchasing trends or on time/late payment metrics? This information is power for a brewery and being able to quickly access this can be a powerful negotiation tool for new and existing contracts.

 

There are numerous benefits to having a holistic system to manage your growing brewery. If you’d like to find out more, please feel free to get in touch.

 

This article was written by Michael Dean, Business Consultant and specialist in ERP for Growing Craft Brewers at Klugo Group. Klugo is the exclusive implementation partner for Crafted ERP, a business management suite built on the NetSuite platform. Find out more about Crafted ERP.

Software for Small Breweries: Myths Busted

Software for Small Breweries: Myths Busted

We’ve compiled a few misconceptions we often hear when it comes to Crafted ERP brewing software and just some of the reasons explaining why it’s suitable for breweries of all sizes.

Myth: “Our brewery is too small to need a brewing software system”

Fact: Crafted ERP was built by seasoned industry veterans to meet the requirements of craft breweries both large and small. It provides one user-friendly, seamless solution that comprehensively manages every job function within the beer manufacturing process.

Myth: “Crafted ERP is a better fit for bigger breweries”

Fact: Business problems faced by breweries will be similar no matter your size. Efficiency and transparency are crucial for any brewery to grow, and with the right technology in place, your business can thrive. Using Crafted ERP software for small breweries, businesses have a 360 degree view of the organisation, with real-time dashboard driven intelligence.

Myth: “Crafted ERP is too complex for what our brewery needs”

Fact: While the idea of a one-system solution can seem complex or intimidating to begin with, the reality is that you’ll already be managing every process that Crafted manages – they’ll just be looked after in multiple systems instead of one. Bookkeeping software and spreadsheets can create the illusion of simplicity, however, when it comes to consolidating all information and connecting the dots, a single solution is much easier to manage. Crafted ERP helps brewers simplify their entire business. Using one complete system means that you can make better informed business decisions and streamline mission critical processes, whic allows you to gain full visibility, scale and future-proof your business.

Myth: “It’s too expensive”

Fact: Ultimately, you get what you pay for. Cheaper alternatives can seem more appealing, but there’s always a reason why. Most brewery software systems on the market are simple web apps with an inventory database, which is not an all-in-one system. While these alternatives may provide a short term solution, they won’t solve any long-term challenges because you’ll still be having the same struggle using multiple systems to run your business.

Does Crafted ERP sound like what your brewery needs?

Book a demo or download the brochure below.

Bringing you the all new #ThirstyThursdays

Bringing you the all new #ThirstyThursdays

Introducing #ThirstyThursdays: half an hour webinar each month where you can kick back with a beer while talking about how to gain a competitive edge in the craft beer industry. Learn from our in-house experts about the ins and outs of our brewing software, Crafted ERP. We’ll be kicking off our first #ThirstyThursdays with a general overview of the software plus a 15 minute live Q&A. Go on, crack open a cold one while you learn! Can’t wait to find out more? Check out our breweries page or download our brochure at the bottom of the page.   Follow #ThirstyThursdays on instagram for topic updates, session times, guest speakers and more. We love to hear from you, so if there’s anything specific you’d like to hear about in our webinar  please send in your suggestions.

Don’t forget…

When: Thursday 1 March 2018. Time: 4pm – 4:45pm. Fill out this form to register for the 30 minute demo and 15 minute Q&A session. [activecampaign form=49]  

Meet the Makers of Crafted ERP

Meet the Makers of Crafted ERP

Why Brewing Software is in Demand

Brewers are facing increasing pressures on margins, high customer demand – and there’s a great deal of competition around. With so many aspects of the business to manage, using one centralised system helps to cater for business growth, consolidates data and ensures that processes are streamlined.

Meet the Makers of Crafted ERP

We are holding an exclusive ‘Meet the Makers’ event, with the creators of Crafted ERP joining us from the USA. Come along to the event for a live demo of the brewing software, gain an insight into industry trends and take part in a Q&A session.

What is Crafted ERP?

Crafted ERP is built within the NetSuite platform – an Enterprise Resource Planning system that runs all of your back-office processes and business operations in the cloud. This means that breweries are presented with one unified solution, rather than using several disconnected systems. Designed to meet the requirements of breweries both large and small, Crafted ERP comprehensively manages every job function within the beer manufacturing process, including; financials, sales and marketing, production, purchasing and inventory management, quality assurance and quality control, packaging and more. As Crafted ERP is built upon a cloud-based system, users can manage their business from anywhere at any time. Processes are streamlined and made more efficient, so your time is spent making and selling more beer.

Event Details

Where: 95 Highbury Road, Burwood, VIC 3125. 
When: Tuesday 23 January 2018.
Time: 3pm-5pm. We look forward to seeing you there! Register below to learn more about Crafted ERP [activecampaign form=48]