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Author's profile photo Terukazu Doi

Grow in the cloud: How cloud ERP benefits midsize high-tech manufacturers

Companies in high-tech manufacturing are accustomed to operating in an industry subject to dramatic advances and rapid evolution. But, for mid-market component manufacturers in particular, the level of change in today’s business landscape is unlike anything most have had to deal with before.

Change in every dimension

These companies, which typically operate high-volume make-to-stock and make-to-order manufacturing businesses, play a critical role in the supply chains of a multitude of industrial and consumer electronic products. And they’re facing a whole range of competing priorities.

Not only must they manage fragilities in their own supply chains, but also adapt to changing demand patterns among their customers, as global businesses increasingly look to move their suppliers closer to end consumers.

At the same time, they must manage their own costs to maintain profitability in their core products, while also building capabilities for the sustainable, low-carbon, innovative, and predefined solutions that more and more businesses, governments, and consumers are demanding.

As the world cries out for faster decarbonization and greater corporate responsibility, these companies are increasingly required to provide accurate environmental data about their products for end manufacturers, as well as provide assurances to regulators around issues like the use of slave labor and the protection of personal information.

What’s more, midsize high-tech companies are having to manage all these day-to-day challenges while keeping pace with broader societal changes and new business opportunities, such as every consumer having a smartphone. That calls on them to drive digital transformation, reinvent business processes, adopt smart manufacturing techniques, expand into new business models, and target international growth.

Time to consider cloud

Can midsize manufacturers achieve all these goals together? They can. But to do so they need the right business technology systems in place.

In particular, they need enterprise resource planning (ERP) solutions that are as agile, responsive, and high-performing as possible — and able to support product and process innovation with holistic real-time data insights.

The reality on the ground, however, is often very different. Some of these midsized manufacturing businesses are still managing a fragmented set of legacy technologies, while others are relying on manual processes and paper-based workflows. These are simply too cumbersome and siloed to deliver the necessary agility, while also increasing the cost of running the business.

It’s why cloud ERP is rapidly becoming a priority for these companies. And, with solutions like SAP S/4HANA Cloud Public Edition, the option of running industry-standard ERP applications in the cloud is opening up to more and more manufacturing businesses.

Say goodbye to IT complexity

Historically, concerns around IT complexity have sometimes made midsize companies cautious about adopting market-leading ERP solutions. That’s because they typically don’t have large IT teams to implement and maintain complex applications on their own hardware.

But the beauty of cloud ERP is they don’t have to. With a software-as-a-service model, like that provided by SAP S/4HANA Cloud Public Edition, a business can go live with cloud ERP quickly.

What’s more, they can do so with confidence using the proven guidance provided by SAP’s Grow with SAP best-practice support. So they know they’re getting the most out of their new cloud ERP solution.

An example? Look at Wuzhen-based FlexTOUCH Technologies, a manufacturer specializing in next-generation flexible metal mesh touchscreens, with a workforce of around 100 people. By implementing SAP S/4HANA Cloud Public Edition, FlexTOUCH was able to reduce its IT complexity and cut its IT maintenance costs in half.

Not only that, the company also improved access to data across the enterprise to enable more nimble decision-making and saw a 30% increase in production capacity through greater efficiency.

Operational value

The value of cloud ERP is about more than implementation speed, of course. Take manufacturing operations. Whether the business is running make-to-stock, make-to-order, configure-to-order, or engineer-to-order, cloud ERP solutions can be used to seamlessly integrate processes across the entire value chain.

This enables companies to streamline operations, improve efficiency, and enhance collaboration between departments, ultimately resulting in faster time-to-market and increased customer satisfaction.

Cloud ERP also offers a real-time view of the business at multiple levels — including insights into revenue, profitability, and margins. This empowers decision-makers to make more informed choices, identify trends, and proactively address manufacturing and customer issues before they escalate.

Standardized efficiency

That’s not all. Mature cloud ERP solutions like SAP S/4HANA Cloud Public Edition also come with preconfigured best practices across business and manufacturing processes.

This is particularly relevant for midsize manufacturers because it helps them standardize their data and workflows. And that standardization is a critical prerequisite for increasing the levels of automation, efficiency, and agility across the business.

Look at how Taiwan’s APLEX Technology used cloud ERP to create a unified information system — standardized across its global locations — capable of supporting innovative product development.

Thanks to SAP S/4HANA Cloud Public Edition, APLEX was able to automate business processes, generating a time saving of up to 20% for its team members. The company was also able to maximize cross-department communication and enable real-time visibility of operational data.

Growth with SAP

Big picture? All these benefits can be brought together to help midsize manufacturers resolve competing business priorities and focus on the ultimate aim: growth.

A mature cloud ERP system offers both stability and scalability, allowing businesses to streamline day-to-day operations while also opening up opportunities for innovation, expansion, and M&A. Importantly, it can also expedite international growth by providing support for global standards, localized requirements, and harmonized processes.

It’s why cloud ERP is now a critical growth enabler for high-tech industries. If you’d like to find out more, please take a look at our Grow with SAP site here.

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