An aerospace products manufacturer is learning this firsthand following the release of its third quarter profits and revenue. According to a PCWorld story last month, Woodward reported that it had generated $460 million in revenue last quarter, short of the expected $491 million analysts had anticipated it would earn.

While the organization did cite additional reasons for the shortfall, it specifically mentioned problems involving its ERP software project as being a contributing factor. It is still unclear where implementation problems may have occurred, but PCWorld speculated that the most common culprits of greater-than-expected ERP costs are alterations to the initiative after it has begun, employees not understanding the system and insufficient testing of the system before it goes live.

To ensure that an ERP project timeline remains accurate, Network World contributor Shawn Scanlon recommends that businesses be fully prepared to implement ERP software when it comes time for a vendor to provide them with the services they desire, including ensuring that staff understand how these upgrades will ultimately benefit them.

“End users don’t like change because it causes them additional work,” Scanlon wrote July 30. “They would rather deal with the quirks and inefficiencies of an old system than test a new one. If the end user has a bad perception of the upgrade, it will hinder the overall effectiveness of the new system even if the software and hardware are fully functional.”

ERP software that can be customized to the specific needs of a business is ultimately more likely to be embraced by companies that are in need of new computer business solutions and desire more efficient operational processes.

Operating with a reduced inventory limits the likelihood of unnecessary surplus, but it also could lead to demand not being met if there is a sudden surge in orders.

"It's always a balancing act, but today's marketplace will often allow for a smaller inventory on hand with same-day or next-day delivery on additional inventory," inventory management expert Michael McNeilly told The Huffington Post on July 18. "Having good control of your inventory allows you to not only offer a wider selection of products, but also can free up significant levels of cash flow while still providing the service your customers demand."

By keeping regular inventory and assessing products that are currently on-hand, businesses are better able to gauge the movement of materials and what percentage of their inventory may need to be replenished. If an organization is unable to fill an order due to a lack of inventory, customers could come to distrust that company and take their business elsewhere.

Of course, savvy business owners can avoid this arduous process altogether by using comprehensive inventory management software to track the movement of goods in real-time.  This management software can also help businesses to as they involve other aspects of sales, including ecommerce, marketing and merchandising, into one streamlined process, according to a Multichannel Merchant story from earlier this week.

Ultimately, these programs allow facility managers to reach more informed business and forecasting decisions, ultimately freeing up more cash in the process and guaranteeing that customer demands are met.

The 24th Annual Energy Symposium, organized by the Texas Energy Council, had well-informed speakers. One was Jason Wilcox speaking on “The Future of Oil and Gas Service Companies.” Wilcox has as knowledgeable a perspective as any on this topic.

As founder and managing director of Wilcox Swartzwelder & Co. , his primary focus is the energy sector of investment banking. He and his principals have completed over 100 transactions (business sales, mergers, acquisitions, recapitalizations, and public offerings) collectively valued over $3.6 billion. Wilcox is also part owner in multiple oil field service companies.

Wilcox and his partners assist owners of Oil and Gas Field Services companies under $150 million in revenue. Generally these owners are in their 50’s and 60’s and are often stretched on capital, people, and equipment. Some are ready to sell and are attractive to integrators interested in either their geography or their service.

When asked the following question in the open forum:

“Other than having a specifically desired geography or service offering, what can all Oil and Gas Service companies do to be more attractive to investors?”

Wilcox answered verbatim:

“Management capability and how well documented is their back office: billing, payables, accounting. Back office sophistication is often more lacking in technology than the field. What buyers are looking for is assurance that they are getting what they are being told.”

Naturally, since that is the role filled by Computer Business Solutions’ Oil and Gas Field Services software built within Microsoft Dynamics NAV accounting modules, I was grinning from ear to ear.

See the rest of my notes from the TEC Energy Symposium starting here, including a perspective from Mr. W. Herbert Hunt himself.

The different factors associated with supply chain management have multiplied and diversified in recent years, as outsourcing, volatile consumer demand and the development of new products has pushed manufacturers to the point where a single plan of production is no longer adequate to fill orders sufficiently.

"Acute volatility has led to the need for creating a range of plan possibilities through what-if analysis, rather than the traditional goal of creating a single plan," according to a recent IndustryWeek webinar. "Sales and operations planning needs to evolve into a process in which teams can evaluate the full market potential and associated supply chain risks for multiple, varying scenarios."

Manufacturers do not need to look any further than the most recent Federal Reserve report on industrial production, which continued its recent up-and-down trend of the last few months. In June, production climbed by 0.4 percent, after dropping by half that amount in May, which replicates the pattern of March's weak numbers and April's slightly higher figures. Still, growth in June did exceed most economists expectations.

As industry-wide inconsistency in manufacturing and production continues to persist, organizations need to be able to inject some degree of predictability into their operations processes, which is where ERP software comes into play. These computer programs are able to manage inventory and production, so that improved cash flow and better efficiency can help these organizations weather the current turbulence.

Now, a new study from the U.S. Commerce Department suggests workers within the manufacturing industry may enjoy greater benefits when compared to their nonmanufacturing counterparts. The Economic and Statistics Administration reported that manufacturing workers are paid 17 percent more than nonmanufacturing employees, when considering both wages and benefits.

Higher wages may be the result of more demanding job requirements within the manufacturing industry, said the report. Many manufacturing workers need to possess significant math, science, engineering and technology skills to succeed in that industry.

The average hourly salary for a manufacturing employee is $29.75 per hour, while totally hourly compensation is $38.27 when including benefits.

"This report reaffirms that manufacturing is a matter of fundamental importance to our country's economic strength, so we must do everything we can to continue to build an overall environment where U.S. manufacturing can flourish," commented Commerce Secretary John Bryson.

The U.S. economy added 16,000 new manufacturing jobs in April, according to the most recent data available from the Department of Labor.

Businesses in the manufacturing industry may want to accompany any success on the hiring front with an investment in ERP software that can contribute to their overall productivity. These professionals are advised to seek ERP software that can aid with the efficient management of production ordering and material billing.

Panjiva, a search engine that allows product buyers to locate ideal suppliers around the world, released a report titled "The State of Global Trade in 2012" earlier this year. In the report, the company noted that while most buyers still rely on Chinese suppliers for materials – 73 percent said they source from this country – 68 percent say sourcing from countries other than China is "much more important" or "more important" than it was a year ago.

Many businesses think finding suppliers elsewhere can contribute significantly to their own attempts to curb spending, according to the report. Fifty-three percent said they intend to look to other Asian countries for new opportunities, while 24 percent view the U.S. as a potentially favorable destination.

Among international suppliers, the U.S. was the most attractive trade partner for new business – earning favor among 68 percent of suppliers. Fifty-six percent pointed to Europe while 41 percent highlighted China.

In an interview with Industrial Distribution, Panjiva CEO Josh Green said optimism among distributors increased overall, although smaller businesses were more likely to experience improved sentiment than larger ones. Green surmised that this may be because smaller distributors "battened down the hatches" and made their operations more efficient to save costs during the recession. Those that were successful now run relatively lean operations and have rosier outlooks to show for it, Green suggested.

For businesses that wish to further improve their distribution efficiency and bottom line, an investment in inventory management software may help distributors increase inventory turns and lower costs as a result.
 

Strategy Analytics released a report in April that described the increasing desire for mobility among today's workers. These professionals desire constant access to critical business information, but the nature of technology needs that this information often has to be delivered through new channels, including mobile devices.

As a result, the number of mobile workers making use of CRM and ERP software will grow significantly in the next five years, according to a press release on the report. Though Strategy Analytics did not offer a specific number, it did estimate that "tens of millions" more users should be using CRM and ERP software by 2017.

"With an eye toward becoming mobile businesses, today’s organizations are committed to mobilizing critical applications by ensuring that workers have access anywhere, including at home, at remote work and customer sites, and while traveling," said Gina Luk, a senior analyst at the firm and author of the study.

While mobile capabilities are increasingly important for individuals who use ERP software, manufacturers and distributors considering an upgrade should also gauge if a potential new piece of software satisfies the key requirements as defined by their particular business.

The Wall Street Journal cited a recent Bank of America report that said the economy is currently on the brink of a "manufacturing renaissance," noting that the success of the industry's heavyweights has trickled down to smaller businesses and ensured strong overall growth prospects.

"Manufacturers are increasingly likely to bring at least some production back to the U.S. while established players reinvest for further productive capacity and productivity improvements over the coming years," said the Bank of America report, according to the Journal.

The Bank of America report reinforced recent findings from the Boston Consulting Group, which noted that between 2 million and 3 million manufacturing jobs could return from China to U.S. shores based off foreign wage increases that have made doing business in America more affordable.

Changes in the manufacturing industry have piqued the interest of investors, particularly those who invest in exchange-traded funds, explained the Journal report. These are baskets of individual stocks that consolidate businesses within a single industry. For example, investors could conceivably invest in the U.S. manufacturing industry as a whole, enjoying investment returns comparable to the performance of the sector overall.

As for manufacturers, improving business allows many managers the opportunity to reevaluate existing technology, practices and objectives to determine if new capital investments should be made to increase business productivity. ERP software is one purchase that might help ensure manufacturers continue to enjoy steady sales and production into the future.
 

PricewaterhouseCoopers released its first quarter Manufacturing Barometer on May 1, reporting that manufacturers feel more optimistic about their ability to generate profits and feel fewer obstacles to growth are present in today's economy. Industrial manufacturers feel more optimistic regarding economic growth in the next 12 months, with the report's index measuring that sentiment climbing 40 points in the first quarter.

On average, manufacturers predict their company's revenue to grow 5.6 percent in the next year, an increase from the 4.4-percent average for projected growth reported in the previous quarter. Ultimately, 92 percent of respondents say they expect revenue to increase this year.

"Following a prolonged period of streamlining and cost-cutting during the economic downturn, there is no question that companies have achieved efficiency gains, while balance sheets improved measurably," said Barry Misthal, global industrial manufacturing leader for PwC. "Hence, management teams are increasingly focusing on strengthening their product offerings and competitive positioning, as well as evaluating global expansion strategies through both M&A and new facilities building."

Manufacturers searching for valuable ways to extend existing growth trends may benefit from evaluating their business' technological capabilities. By analyzing existing ERP software, for example, business owners may be able to identify shortcomings that  when solved could lead to improvements in productivity or profitability.

The National Restaurant Association released its most recent monthly report on the outlook for the U.S. restaurant industry, revealing growth in its Restaurant Performance Index (RPI). That measure reached a reading of 102.2 in March, which was an increase of 0.03 percent from the previous month and matched the index's highest reading in several years.

According to the trade group, the index has remained above the 100 for five consecutive months, showing consistent growth.

"The first quarter finished strong with a solid majority of restaurant operators reporting higher same-store sales and customer traffic levels in March," said Hudson Riehle, senior vice president of the Research and Knowledge Group for the trade group, in a press release. "In addition, restaurant operators are solidly optimistic about sales growth and the economy in the months ahead, which propelled the Expectations component of the RPI to its highest level in 15 months."

Restaurant owners also said they were more inclined to increase capital spending on key business improvements given rising customer traffic and sales.

To better manage changing financial dynamics in a period of industry strength, restaurant operators may want to take a closer look at the technological tools they currently deploy in their stores and consider an upgrade. Improved restaurant accounting software can help automate many of the financial responsibilities that back office managers must handle each day.