The mechanical equipment sector remains an important segment of the UK economy. Within manufacturing, it is our second biggest employer, accounting for 8.6% of the workforce. The sector has excelled in spreading its wings and meeting demand on a global scale. Yet in an intensely competitive market, the pressure is on to boost productivity and with fresh challenges on the horizon, now is the time to embrace digitisation and fuel future growth through the power of ERP.
The mechanical equipment industry helped forge the Industrial Revolution and has made a significant contribution to UK plc ever since. According to Make UK, the mechanical equipment sector is one of the most export intensive segments of UK manufacturing, with a hefty 43% of demand derived from overseas consumers generating £33.2bn in 2017, an increase of 46% since 2000. Given the wide range of products and systems it produces, the sector has exploited demand from the entire industrial spectrum and the enduring appeal of British engineering has seen its customer base stretch right across the world.
Yet the sector faces numerous challenges from home and abroad so is well placed to drive efficiencies and boost competitiveness through ERP.
Competition has intensified in recent years and the UK now lags behind the remaining G7 countries and South Korea as the 8th largest mechanical equipment producer in the world in terms of GVA (Gross value added).
Commodity price and exchange rate fluctuations have always had a significant impact on profitability and forced businesses to look at how to build resilience. Now, the prospect of Brexit is forcing manufacturers to reassess their corporate strategy.
In 2017, 45% of mechanical equipment exports went to EU customers. Although since the referendum in 2016 the sector’s exporters have benefited from sterling’s depreciation, the cost of imports has risen and margins have tightened. On the UK’s exit from the EU and its single market, the imposition of tariffs and increased red tape will hit profits hard.
Benefits of ERP
Savvy manufacturers will take this opportunity to build their digital resilience and implement ERP solutions which will put them on a stronger footing to compete on the international stage.
The mechanical equipment sector remains labour intensive and has some way to go in cutting waste and improving efficiency. The key to boosting competitiveness lies in driving productivity.
Investment in ERP will revolutionise the way people work, automating mundane tasks, facilitating joined-up working and driving tangible gains in productivity. A centralised system will provide full visibility of every aspect of the business and offer the insight necessary to make the operation fitter and leaner to compete post-Brexit.
The tools offered by K3 Syspro allow mechanical equipment manufacturers to optimise their performance and steal a march on their competitors. As a leaner and more robust business, they can prepare better for cyclical fluctuations and be better positioned to exploit new opportunities arising from Industry 4.0, IoT and Big Data.
The K3 Syspro solution
SYSPRO seamlessly integrates with CAD/CAM and offers full traceability through all transactions, reducing inventories and improving capacity utilisation. SYSPRO’s engineering change control module reduces or eliminates the paper trail associated with product design data, whilst SYSPRO factory scheduling manages the entire supply chain from planning to the identification of potential problems.
User-friendly modules facilitate accurate job costing, the use of dynamic product schedules and greater control over capex expenditure and cashflow.
Customer order fulfilment is managed through SYSPRO’s extensive sales order picking and dispatch features, while SYSPRO’s multi-warehouse, distribution requirements planning and goods-in-transit features facilitate the planning, execution and control of parts distribution to multiple geographic locations.
Containment systems supplier Extract Technology was looking to embrace digitisation to boost performance and chose K3 Syspro to implement a new ERP system back in 2006.
Chief financial officer Jason Armitage says: “We wanted the level of automation that the system would provide to gain efficiencies throughout our process. By driving out manual non-value-added tasks, we knew we would have more time to concentrate on improvements, customer service and sales.”
Since adopting the new system, Extract has enjoyed significant cost savings and boosted productivity. It is now able to interrogate every aspect of its operation and make any necessary improvements.
“Visibility of information is much clearer than it has ever been,” says Armitage. The company is constantly discovering new applications for SYSPRO tools. He adds: “SYSPRO gives us a solid platform to work from that does not restrict us to rigid procedures. It is so flexible, allowing us to develop our processes as we need to – it is a system that moves along with us.”