With the ongoing uncertainty surrounding trade and the economy in general, many businesses are faced with trying to plan for a future that could look any number of ways. While nothing is certain, one trend that looks unlikely to change in the near future is the rising costs associated with production and manufacturing.
This leaves businesses in those spheres facing a difficult problem- how to handle rising costs without alienating a stressed customer base that has already seen prices rise 2.3% over the last twelve months, according to research conducted by the Manufacturing Alliance. This inflation, coupled with a recent 0.5% dip in wholesale prices while the cost of imports has begun to rise, has left businesses looking for a new solution.
Making the choice to partner with Enavate for a modern, agile ERP solution like Dynamics 365 Business Central can help manufacturers navigate the choppy waters of the current economic situation.
One instant impact of the current economic instability is the rise of the costs of materials, a vital segment of every manufacturer’s business. Between tariffs on imports and disrupted trade lines, getting the materials and goods needed to produce your products is becoming increasingly costly.
With Dynamics 365 BC businesses have in-depth production costing software, tracking material costs, labor, and other factors that go into efficient and profitable production. This real-time insight into production costs is vital to maintaining profit margins during times of turbulence, when costs are liable to change rapidly.
Things like Bills of Materials (BOMs), route planning, and capacity planning all operate from within the BC system, rather than disparate and often conflicting systems or modules, allowing for easier planning and more efficient job completion, drastically lowering costly downtime between jobs.
BC also offers material requirements planning to ensure your materials inventory is consistently at a level that can meet forecasted order needs.
Because Dynamics 365 is a complete ERP platform, these tools are integrated with ordering, allowing for material inventory to be kept at the right levels, avoiding wasteful over-ordering and costly supply shortages.
Business Central also comes equipped with intuitive production order and scheduling suites, which are vital for planning for the unavoidable supply chain disruptions that crop up in times of uncertainty. These tools allow manufacturers to optimize production timing, both real time and forecasted, allowing users to quickly pivot should a disruption occur, rather than having costly delays.
Manufacturers are also urged to consider the unquantified benefits that come from a modern ERP system, such as the ability to access real-time data from your system on any internet connected device. This allows manufacturers to make rapid, informed decisions when faced with issues such as supply chain disruptions, equipment malfunctions, damaged products, or rapid changes in customer needs.
Additionally, reps can be much more decisive in solving customer problems, as inventory levels and projections will always be accurate and readily available, and leadership will always have access to the most up-to-date information, meaning decisions won’t have to be delayed, and won’t be prone to mistakes based on out-of-date data.
On top of these considerations, the data in BC is largely “drill-down-able” and AI-enabled, allowing for users to dive deep into the numbers to ask questions of their data, analyze trends, and improve projections, a vital tool in keeping rising costs in check.
Another tactic you can use to avoid unreasonable price increases for your customers is to find and lower (or eliminate) some “hidden” costs of doing business. In this arena, Dynamics 365 Business Central can be a paradigm changer. This is especially true for businesses currently operating with a legacy, on-site ERP platform.
The most obvious of the “hidden” cost savings are the simple fact that as a modern, cloud-based ERP solution, BC does not require the time, space, and financial resources legacy, on-site servers need to function. On-premises systems need physical space, meaning businesses must house them, and physical maintenance, meaning businesses must pay employees to keep the servers running.
Both of these costs are eliminated by BC, allowing businesses to save on direct costs, and also to use the space and work-hours previously tied up in housing and maintaining the servers in other, more lucrative ways.
Additionally, upgrades are no longer a time-consuming and costly process for businesses who move to the cloud, as not only are they able to be scheduled during non-business hours to prevent costly downtime, they are also included in the service, and require little to no manual intervention.
Additionally, BC offers hidden savings in its predictable pricing and licensing structure, a far cry from the often confusing and unpredictable pricing used by legacy systems. With a straightforward licensing model based on the number of users and user type, BC users no longer have to worry about complicated billing structures and surprise access fees.
Implementation costs are transparent and equally straightforward, allowing businesses to budget effectively and avoiding “surprise” increases during the go-live, lowering the overall cost of implementation compared to other platforms.
Manufacturing and distribution businesses face a challenging tight-rope to walk during normal times. With the current volatility in international trade, those difficulties are amplified. Uncertainty about prices, the availability of goods, and the ever-changing confidence in the economy raises anxiety for both businesses and customers alike.
With customers having more choices than ever before, businesses can no longer mindlessly pass rising costs onto the consumer without the risk of jeopardizing their customer relationships or even losing them entirely. To thrive in uncertain times, businesses must focus on ways to reduce costs in other areas to offset the changing tides of trade.
By partnering with Enavate to upgrade to Microsoft Dynamics 365 Business Central, a modern, agile ERP platform, manufacturers arm themselves with the tools they need to combat the rising prices of goods and materials.
With in-depth tools for production costing, forecasting, inventory management, route planning, and more, BC gives businesses more control over the costs of doing business than ever before, and its predictable, no-surprise implementation and licensing structure ensures that pesky “hidden costs” are kept to a minimum or eliminated entirely.
Combined with its top-of-the-line productivity features, manufacturers and distributors operating on BC have the best chance of managing rising costs with their customer satisfaction scores remaining intact.