US Manufacturing Surge Impacts ERP Vendors

July 1, 2011
By djohnson

ERP Software for ManufacturingAll indicators are that US manufacturing, one of the segments hardest hit by the economic slow down, is having a strong revival in 2011.

About the Manufacturing Recovery

As reported in the Financial Times, manufacturing is the strongest sector in US economy, with annual estimated rate of 9.1 percent in the first quarter compared with 1.8 percent for the economy as a whole.

Some of the reasons cited for this upward trend:

  • Lower Labor Costs have made US based manufacturing labor costs more competitive with their Asian counterparts
  • Higher Quality has proved to be a “competitive advantage” for US based manufacturing as “glitches and nearly-missed deadlines” add to the overall costs of operating overseas – see article in Smart Advantage.

The April 2011 Manufacturing ISM Report on Business claims that the “the first four months of 2011 are the highest readings in the last 38 years.” The ISM report lists the 17 specific manufacturing verticals in order of growth, with Wood and Plastics and Rubbers leading the way.

ERP Software Vendors – Take Note

Of special interest to ERP vendors is that a lot of the growth is coming from smaller and more nimble manufacturing companies who are “battling to innovate and become more productive.”

Quoted in the Financial Times article “Growth in jobs belies rust belt’s reputation”, Tom Waltermire of the Team NEO non profit agency based in Cleveland, also notes the trend that “When the dinosaurs are dead, all the little mammals take over…”

VARS with cloud based ERP and manufacturing capabilities should be taking their message of higher productivity, innovation, and lower costs to the “little mammals” being born all over the US.

Also see: MFGWatch Quarterly Survey of North American Manufacturer (http://www.mfg.com/en/mfgwatch/)

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One Response to “ US Manufacturing Surge Impacts ERP Vendors ”

  1. Nikhil Kumar on July 14, 2011 at 4:18 am

    It is certainly a pleasant surprise for many ERP vendors and SI integrators to see revival in growth of US manufacturing industry in this volatile global economic scenario. ERP systems play a crucial role in enabling this industry to remain competitive. As ERPs mature and grow, the focus on innovations and ‘beyond ERP’ also intensifies. Today, more and more enterprises are exploring ways to improve their workforce productivity and customer engagement. ERP deployments such as Oracle, SAP and Microsoft, as well as from other vendors, are not seen as mere IT initiatives; they are considered as strategic levers to leapfrog ahead of the competition by enabling standardization and improvement of business operations across the enterprise, which in turn positively impact the company’s financial and operational metrics. Today, enterprises are also implementing mobility, social CRM and cloud enabled solutions to take ERP implementations beyond their traditional realm.

    Please also see my thoughts on best practices on successful ERP deployment by visiting http://www.sdcexec.com/online/article.jsp?siteSection=12&id=13365&pageNum=1

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