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Leveraging Technology to Thrive in a Down Economy
Why and how technology investments lead to a competitive edge during tough economic times
Today we are clearly experiencing a widespread economic downturn: food, energy and raw material prices are causing fears of inflation; unemployment rates are increasing; and oil continues to be two to three times the price of a year ago. Typically, when the economy falters or shows signs of slowing, businesses have a tendency to retrench. And yet making strategic investments in technology and finding more ways to leverage the capabilities of existing technologies can lead to a competitive edge during uncertain economic times.
Tough conditions are affecting much of the U.S. and world economy today, and many companies are reacting to them by trying to reduce their risk. For example, while attempting to lower costs and reduce overhead, some organizations will slash budgets across departments and kill initiatives that were considered keys to success just a year ago. These firms clearly have not prepared a plan for tough times, thereby forcing them to react with short-term tactics that will, at best, help them weather the storm for one more quarter. But if they were to take a step back, these businesses might recognize that the budgets typically affected first are often the areas where they should continue making investments (or at least leverage existing ones) in order to ensure long-term success.
Some of the key business drivers dictating the current behavior of manufacturers include, but are not limited to, the following:
Let's delve into each driver and consider potential actions by firms, along with their implications.
Streamlining Processes
Manufacturing companies must examine their core processes and operations in difficult economic times. It is there that they can most likely find ways to improve productivity, empower knowledge workers and satisfy customers in the most efficient manner. Repeatable and documented processes form the core of the operations, which means that streamlining these processes can lead to tangible efficiency gains, but only if the improvement effort is accomplished with confidence and measurable results. Tools and technologies that enable the company to optimize processes become critical to achieving the efficiencies necessary in leaner times.
Best practices can often be found by examining existing processes. Once the highest performing processes are identified, the company must act to spread them throughout the organization. Technology that brings and enforces changes in behavior to core processes can have a positive material impact on operations. Retraining and implementation are necessary costs that must be borne to facilitate positive results. The long-run benefits outweigh the initial investment in most cases. Once achieved, the company can generate a self-sustaining competitive advantage that is not easily replicatable by competitors.
Tough conditions are affecting much of the U.S. and world economy today, and many companies are reacting to them by trying to reduce their risk. For example, while attempting to lower costs and reduce overhead, some organizations will slash budgets across departments and kill initiatives that were considered keys to success just a year ago. These firms clearly have not prepared a plan for tough times, thereby forcing them to react with short-term tactics that will, at best, help them weather the storm for one more quarter. But if they were to take a step back, these businesses might recognize that the budgets typically affected first are often the areas where they should continue making investments (or at least leverage existing ones) in order to ensure long-term success.
Some of the key business drivers dictating the current behavior of manufacturers include, but are not limited to, the following:
- A strong need to streamline core processes to achieve production efficiencies;
- Compliance pressures for regulated industries, such as pharmaceutical, food and biotechnology, as well as companies facing any type of internal or external audit;
- The understanding that managing critical documents and documenting workflows cannot be overlooked in a successful operation; li>A requirement to bring more functions together, connected to core operations and the key performance indicators (KPIs) produced. Visibility into key processes will enable changes and adjustments to increase output, efficiency, customer satisfaction and the bottom line.
Let's delve into each driver and consider potential actions by firms, along with their implications.
Streamlining Processes
Manufacturing companies must examine their core processes and operations in difficult economic times. It is there that they can most likely find ways to improve productivity, empower knowledge workers and satisfy customers in the most efficient manner. Repeatable and documented processes form the core of the operations, which means that streamlining these processes can lead to tangible efficiency gains, but only if the improvement effort is accomplished with confidence and measurable results. Tools and technologies that enable the company to optimize processes become critical to achieving the efficiencies necessary in leaner times.
Best practices can often be found by examining existing processes. Once the highest performing processes are identified, the company must act to spread them throughout the organization. Technology that brings and enforces changes in behavior to core processes can have a positive material impact on operations. Retraining and implementation are necessary costs that must be borne to facilitate positive results. The long-run benefits outweigh the initial investment in most cases. Once achieved, the company can generate a self-sustaining competitive advantage that is not easily replicatable by competitors.
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