As we mentioned in Part One of our Top Key Characteristics of SMB Manufacturers blog, small and midsize manufacturers have some key strengths that make them ideally suited for the digital era. Often categorized as insignificant, small to mid-sized businesses (SMBs) are often and mistakenly overlooked.
This is a near-sighted mistake that can have severe repercussions for competitors – and a huge advantage for SMB manufacturers. In today’s digital economy, SMBs have some unique opportunities available to them. Let's look at the remaining key characteristics of a SMB manufacturer.
Always expanding into new markets, SMB manufacturers tend to be growth driven. Always on the lookout for new mergers and acquisitions, SMBs are continuously searching for new opportunities. Expanding a SMB too quickly, in, for example, the Life Sciences industry, can create hazards with cashflow and issues with regulatory and compliance mandates. If expanding across borders, international issues such as currency exchange rates, taxes and tariffs, and reporting mandates, can become troublesome.
In today’s competitive market, SMBs can integrate ERP software solutions that can expand with them as their companies grow. It is no longer necessary to do a complete replacement of an ERP system when the company merges with another firm, creates a new division or expands into new target markets. Operating systems for today’s ERP solutions are highly flexible and offer integrations for sharing data and compiling an agreeable result.
Often working long hours, stakeholders in SMB manufacturers work hard, but, as their companies continue to grow, more personnel will be added. Using each employee to their top level of performance is essential. The slim pickings of skilled workers can be stressful and often forces SMBs to use the resources available – which may be less than optimal. Companies must hire employees with little skill in their industry and provide training or, when unable to find qualified applicants, they must turn to outside consulting firms to take on roles otherwise held by employees.
The goal is to have each employee work smarter, not harder. SMBs who empower their workforces and make well-informed decisions that are in-line with the strategic plan of the company. ERP systems assist executives in making well-informed decision by utilizing easy to use reporting tools, role-based workbenches and dashboards. Knowledge bases and prescribed workflows push data to users and guide them into using best business practices. Optimizing the existing workforce, tracking certifications, current skills, and career goals can be identified by a Human Capital Management (HCM) solution.
The conservative approach to investments, and conscientious use of resources is a great strength of SMB manufacturers. Recalling the difficult days of the start-up phase when finances were tight may be a reason for this frugality. SMBs also may be trying to capture investors or prepare for an Initial Public Offering (IPO). Whatever the reason, SMBs need to monitor cashflow closely, carefully timing investments. In turn, this can make purchasing a new ERP software solution challenging.
Cloud solutions with monthly subscription models provide digital tools and end-to-end efficiency, which is enticing for SMBs. Not requiring a large investment up-front, the cloud solution makes it a realistic approach to set up operational and financial processes without reaching your cash flow limits.
SMB manufacturers are here to stay and will continue to thrive into today's fast-paced economy. SMBs can identify opportunities quickly without the multiple layers of approval structures, providing many strengths from innovation to frugality. Strengths of this type can be expanded upon without limitations. ERP software can support SMBs strengths and be an important factor in their growth, offering data-driven insights needed for short- and long-term goals.