Are you Ready for Growth? How to become ready for growth?
This article aims to help manufacturing SMEs assess, whether this is the appropriate time to think of growing their business and also to understand what are the steps and measures they need to adopt in order to become ready for growth.
When should you think of growing your business?
Here are some questions that help you determine, whether you should think of growing your business?
- What are the trends in your industry? How is the industry outlook?
- Do you have a steady stream of customers?
- Do you have a lot of repeat customers?
- Are you making regular and increasing amount of profits?
When the industry you operate in shows a positive trend towards growth and development it is the right time to think of growing your business. When you have a steady and growing number of regular customers; it is an indication that there is a continued demand for your products or services. When you have a lot of repeat customers, it is proof that your products and services are meeting customer expectations and the recurring revenue from happy customers ensures that your business has a stable income. When you are making continuous and increasing amounts of profits, it is easier to invest money into growing your business.
If your response to all the above questions is in the affirmative, then you may well be in a position to say that you can positively think of growing your business and should take the necessary steps to become growth ready.
Let us now look at the specific requirements of Manufacturing SMEs to understand how they can become growth ready.
The manufacturing industry in India
As per a report by IBEF, Manufacturing is considered as one of the high growth sectors in India. It is said that the manufacturing sector of India has the potential to reach US$ 1 trillion by 2025. With the government also introducing various initiatives that support the holistic development of manufacturing in India, it is a sunshine sector right now and manufacturing SMEs should leverage this momentum to grow and expand their business.
Digitization and Digital Transformation is the need of the hour and way forward.
Digital Technology is changing the world of manufacturing and turbocharging processes to bring in speed & efficiency. If you really want to grow and expand your business in order to stay ahead of competition, it is inevitable to adopt digitization. (if you have not embraced it yet).
Digitization involves gathering your data in the digital format so that it can be easily saved, accessed and shared across using mobile, computers and internet. It is the first step towards creating a digital backbone and moving towards the automation of processes.
Digitization will do away with a lot of redundant, monotonous paperwork and save significant time of your workforce. They can then focus on more important tasks such as how to improve processes, products, services and grow your business etc.
Digital Transformation focuses on modifying and redefining your current processes to streamline and automate the entire processes to bring transparency, improve collaboration among departments, team members as well as improve speed, efficiency & productivity.
Providing Right Information to Right People to make informed decisions
Digitization ensures real-time data is captured and stored in a single central location. This data now becomes available at the click of a button from any time anywhere. Companies can provide appropriate & right information to the right people based on their roles and designations to improve the functioning of an organization.
Speed in Transactions and Business
In terms of a Business, Speed means how quickly your business performs. What is your turnaround time? How soon do you respond to prospect queries, clients’ requirements, customers’ feedback, etc. Even if you can speed up each of these processes by 10% or 15% you will be able to achieve significant improvement in your profitability. Digitization and Automation of your business processes will help you achieve speed which is crucial for every business to grow and expand.
If you want to grow and expand, you must focus on the principles of lean. You must study your current processes, identify problem areas, blockages, wastes and continuously eliminate waste from all business processes to provide maximum value to its customers.
Similarly, you must focus on Cost Reduction by identifying and removing unnecessary expenses from businesses to increase profits without impacting product quality. It can lower your product costs and boost your profits. You can set competitive prices of products & gain an edge over competitors.
An organization which really wants to grow and flourish, must keep the customers at the forefront and build products and services designed to suit the specific needs of customers. Hence you must focus on providing a great customer experience from the first interaction with the organization to the purchase and after-sales support. Customer-Centric organizations are able to make their customers happy and ensure customer retention, which leads to more business and eventually higher profits.
Knowledge Management for continuous learning & improvement
Knowledge management is the process of gathering important knowledge and best practices relating to people, processes, technology within the organization. It is crucial for building the corporate IQ and a strong base for improving customer relationships by keeping track of customer requirements, choices, preferences, & more. It becomes the basis for continuous improvement in products and services, making data-backed decisions.
Management by Exception
Management by exception focuses on identifying and handling cases that deviate from specified acceptable norms. With ERP you can define a set of business activities and associated rules to monitor the metrics which are crucial for smooth functioning of your business. Whenever any activities deviate from specified acceptance levels, or any rules are likely to be broken, ERP sends alerts & notifications for information and approval from concerned authorities. You can read more about how to implement management by exceptions with ERP.
Every organization is driven with a purpose to meet the objectives and goals set. Key Performance Indicators (KPIs) help to monitor, control, analyze how you are performing as compared to the key business objectives. By defining appropriate KPIs to monitor and control functions such as plant & machinery, inventory, purchases, sales, quality, and customers, you can ensure optimum utilization of the resources as well as consistent quality to customers. We have compiled a list of organization-level KPIs that should be measured for continuous improvement and progress.
Becoming growth ready is a process of continuous learning and adopting the above-mentioned strategies that will help prepare your business for growth. Implementing ERP software as a change driver in the organization will provide the technology edge that businesses require to improve their processes to grow and scale their businesses.
Benefits of implementing ERP software in an organization
- ERP creates a single source of accurate data and a digital backbone.
- ERP enables you to standardize processes and implements business discipline across the organization.
- ERP enables you to carry out Better Planning, Productivity & Optimum Utilization of Resources.
- ERP Improves collaboration & empowers employees to make decisions.
- ERP helps to measure performance & process KPI Metrics and improve customer Service.
- ERP helps to create a cultural change in terms of making timely, data-backed and informed decisions.
Therefore ERP is an effective mechanism to roll out and implement growth strategies for an organization.