What Role Is ERP Distribution Software Playing In The Changing Manufacturing Climate?

With the rise of labor costs and globalization of the economy, many fear the decline and fall of American manufacturing. Symptomatic of these economic changes is the outsourcing of U.S. manufacturing jobs overseas to emerging markets like China and India. With these troubling signs, why is it that American manufacturing and distribution companies are spending more than ever on ERP distribution software?

Eric Kimberling, managing partner of Panorama Consulting Solutions, a consulting firm specializing in the ERP and IT market for mid- to large-size companies, attempts to answer this question in an article on Business-Software.com. The recent change in the industry, Kimberling argues, is not a loss of manufacturing jobs in the U.S. but rather a change in the type of positions available in developed markets.

“Emerging markets are for the most part taking on a larger share of commodity-based manufacturing processes, while developed markets are shifting their focus to more complex make-to-order and engineer-to-order business processes,” Kimberling writes. The jobs in developed marketplaces like the U.S. are still there, but they’re more complex and focus more on business processes like planning, optimization, product configuration and supply chain flexibility.

This is where ERP distribution software plays a prominent role. Regardless of a company’s location, the supply chain is likely to be global with purchasing, manufacturing and assembly being performed in different countries. “Managing business processes and providing visibility into global supply chains can be very difficult without effective ERP software,” the article explains.

In addition to the supply chain, modern manufacturers and distributors require ERP distribution software to manage global human capital and regulatory requirements. It’s difficult enough to manage your workforce in one location. What if you have thousands of employees spread out over several locations in different countries?

“Executives and management team members need to see the status of manufacturing work being done by procurement agents in one location, warehouse clerks in another, manufacturing and assembly processes in another, and sales reps in several others,” Kimberling writes. So the automation of these complex business processes is vital to maintaining visibility into your business.

American manufacturing jobs are not declining, they’re changing. It’s true that there is less demand for commodity-based manufacturing processes, but this has been replaced by a significantly increased demand for workers who can oversee and manage diverse and changing global supply chain processes. ERP distribution software is facilitating this by making it possible to manage and automate complex processes.

Source: Business-Software.com, September 2013