ERP - a strategic growth

driver for manufacturing firms

January 2013 - 1

ERP - a strategic growth driver for manufacturing firms

Contents

Editorial
The challenges facing manufacturing firms
Information systems for superior
productivity and added value
Technologies as a driving force for innovation
and development
Sage - the partner for manufacturing firms
Our customer testimonials
Sage ERP X3 in brief

3
4
8
10
12
13
15

Sage 2013 All rights reserved SAS (simplified joint-stock company) with a share capital of 500,000 - Registered office: North Park, Newcastle Upon Tyne, NE13 9AA - a public limited company registered
in England and Wales under company registration number 2231246. The information contained in this document may be modified without prior notice. All logos, product names and companies mentioned
in this document other than those belonging to Sage are used for identification purposes only and may constitute trademarks registered by their respective owners - Photo credits: Fotolia, Kerry Harrison S787_MME 06-13 -

January 2013 - 2

ERP - a strategic growth driver for manufacturing firms

Editorial

Manufacturing firms are in a state

of constant change in their effort to
keep pace with the ever-developing
face of the business environment,
such as the increasingly globalised
marketplace, growing competitive
pressure and changing business practices.
These are just some of the factors prompting
companies to review their business strategy
and lead organisational change.
Changes are therefore required at every level,
whether in terms of the range of products
and services on offer, the organisational
structure and business processes, or the IT
infrastructure. At the same time, the use of
new technologies is spreading like wildfire and
ushering in a wealth of prospects for ramping
up business growth and creating value for
clients and customers alike.
ERP, the very backbone of the information
system, also needs to evolve in a bid to factor
in the companys structural changes and new
challenges. In addition to satisfying companies
traditional needs, ERP system also needs to
fuel their development by fostering superior
performance and innovation.

Isabelle Saint-Martin,
ERP Market Manage, Sage Mid-Market

January 2013 - 3

ERP - a strategic growth driver for manufacturing firms

The challenges facing

manufacturing firms
In todays world, manufacturing firms have a number of concerns in common, an indictment
of the winds of change sweeping through the sector and the new challenges threatening their
competitive advantage:
Automated manufacturing and lean

Continuous innovation in the companys

production, which are essential for

practices and tools in a bid to sense client

safeguarding profitability in every key stage of

needs and deliver high value-added services.

production, picking, planning and analysis.

Flexible skills and resources, including
temporary staff.
Increasingly globalised marketplaces, trade,
production and supply chains, requiring
companies to find opportunities away from
home.

Process manufacturing

Raise the bar on

operational efficiency
and productivity

Streamline scheduling
and manufacturing
to reflect demand

Discrete manufacturing

Gain a complete
insight into
business performance
and profitability

Minimise inventory
and WIP levels,
and monitor margins

Guarantee product
and service quality
for greater
customer satisfaction

Performance - Innovation - Development

The information system challenges facing manufacturing firms

January 2013 - 4

January 2013 - 5

ERP - a strategic growth driver for manufacturing firms

Risks and constraints fuelled by the economic climate

Ever fiercer competition on a global scale is accentuating the trends already mentioned and their
impact on the companys management constraints. Furthermore, customers are ratcheting up their
requirements and altering practices in response to the economic crisis.
The onus is on manufacturing firms to achieve a competitive advantage through the quality of
their products and services. To stay in the running, small businesses often have no other choice
than to focus on an increasingly specific range of products in niche or ever narrower markets.
They need to maintain a solid bottom line, despite seeing their margins eroded by rising costs
and a growing number of lower-cost manufacturers.
They need to constantly improve their speed of response, flexibility and efficiency in an effort
to meet customers expectations in terms of commitments, lead-times and quality of service.

January 2013 - 6

ERP - a strategic growth driver for manufacturing firms

Changing management practices

within and between sectors

Globalisation

Globalised trade, shifts in consumer behaviour,

growth in todays global marketplace, meaning

technical progress and changing legislation

that companies need to be more clued into the

are just some of the factors influencing

different rules and tools.

management practices across the board,

Furthermore, companies need to step up their

whether design, production, trade or logistics:

efforts at implementing a global production

International development is key to achieving

process if they wish to pursue a strategy of

Product lifecycle

extended production chains and distributed

Product lifecycles continue shrinking, while

manufacturing systems involving a wider

each day yields more new technologies than

network of subcontractors.

the one before.

If companies are going to protect their

Silo-breaking

margins in such a climate, minimising design

Management practices are morphing across

and production costs is a must, but this

the entire manufacturing industry and also

approach will hamstring their ability to diversify

spreading into other industries.

their product ranges or take manufacturing

Outsourced production, diversified products

complexity to the next level in their quest to

and sales channels, and the advent of bundled

fend off cut-throat competition.

services are just some of the reasons why

Keeping technical data under control will have

manufacturers are drawing inspiration from

a direct effect on the profitability of a given

the practices used by merchants, importers,

activity.

retailers and distance sellers.

Such sales professionals and manufacturing

Compliance

firms alike can secure a major strategic

New measures aimed at protecting the

advantage by improving customer relations

environment have tightened up the standards

and marketing, streamlining their supply chains

that require manufacturing firms to implement

and implementing multi-channel distribution

and carry out extra checks and controls at

systems.

every stage in the production and shipment

cycle. Compliance with these legal constraints
may be harder to achieve when activities are
spread over several logistics and manufacturing
sites or divided among a group of companies
operating in the same sector of industry.

January 2013 - 7

ERP - a strategic growth driver for manufacturing firms

Information systems for superior

productivity and added value
Manufacturing firms have absolutely no choice but to raise the productivity bar if they wish to
withstand the pressure in their ever-changing business environment, while constantly breaking
new ground to keep ahead of the competition. The information system and its underlying ERP
solutions represent a major step forward in achieving those aims.
Companies can install an ERP solution to not only meet their operational needs, but also
streamline their IT infrastructure and deliver support when pursuing new strategies.

New dimensions for supreme

performance

System) and CRM (Customer Relationship

Manufacturers management systems have

add-ons is available from specialised vendors,

often been pieced together over time and

most of which are missing from traditional ERP

consequently represent a patchwork of

solutions, except for solutions designed for key

solutions with varying levels of technological

account customers.

maturity.

In terms of the benefits of implementing an end-to-

The result most often seen is an array of hybrid

end ERP solution incorporating such leading-edge

solutions that have been added on in response

functionality, companies can expect to streamline

to the constraints of the moment, sometimes

and control their business processes to produce

including specialised tools and sometimes

superior quality products in accordance with

proprietary developments.

applicable standards, while improving customer

Interfacing and repository consistency issues,

data traceability and reliability problems, and
system maintainability and obsolescence are

Management). A whole range of software

satisfaction and reining in costs:

R
 amp up product development and
accelerate the time to market.

the main reasons prompting companies to

Increase production and curb costs.

abandon their piecemeal system in favour of

G
 uarantee quality through improved control,

integrated software solutions.

At the same time, streamlining administrative,
logistics and production processes may require
specialised solutions, such as PLM (Product
Lifecycle Management), APS (Advanced
Planning and Scheduling), MES (Manufacturing
Execution System), CMMS (Computerised
Maintenance Management System), WMS
(Warehouse Management

traceability and compliance with inventory

management rules.
S
 atisfy legislative requirements using
workflow mechanisms, audit trails and
document management systems.
Improve supply chain management and
forecasting.
R
 aise the bar on customer service by
improving order processing, automating
deliveries and interacting with on-site and
roaming customers.

January 2013 - 8

ERP - a strategic growth driver for manufacturing firms

Todays ERPs need to offer a broader set of

the companys internal business processes due

functionality than earlier-generation solutions

to enterprise-wide operations and management

and tick all the boxes with an explicit range of

practices between companies.

suitability criteria. The market requires standard,

Logistics can be improved by boosting the

integrated or consistent solutions featuring

global performance of all parties involved in the

an extensive array of modern technologies

same supply chain.

for improving process performance and

Manufacturing firms are required to keep tabs

management practices, while responding to

on their own stock as well as goods held by

the constraints facing small and medium-sized

partner companies, while sharing the same

firms.

forecast and traceability data.

On a different level, firms that belong to a

The need for an open and collaborative

system within the company and with
its ecosystem

national or international group often run

ERPs raise individual and collective

the sharing of standard data, group company

performance within the company by offering

disposals, financial reporting and statements,

real-time shared access to the same repository

and financial traceability.

into management problems that exceed the

boundaries of their own structure, such as

using a set of tools that meet the business

requirements of each user or area of expertise.
In reality, the ERPs mission is taken far beyond

ng
asi
rch
Pu
Contracts

Sales

Ser
vic
es

Contracts

Production

Customers
Clients

Marketing

d
is s e ci s

R&D

um

H
s
re

ou

Community
Business
Collaborative
work

a
rc n
es

io n

al

Suppliers
Subcontractors

acturing
Manuf

Ma Senior
nag
eme
nt

e
Financ

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an s
al aly
ion an
rat
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O

Logistics

WWW

EDI

Internet
Partners

Internet
EDI

Intranet

Communication
Standardisation
Security

Beyond the functional areas - business oversight and the companys ecosystem

As the backbone of an extended enterprise, information systems must be interconnected

to ensure free-flowing information between customers or clients, suppliers or subcontractors,
and subsidiaries or groups, as well as improve database synchronisation. To achieve this aim,
processes leverage the solutions technical capabilities in terms of supporting add-ons and
collaborative systems, including EDI, cloud-enabled real-time connectivity between systems,
sharing portals and platforms, trading hubs and other marketplaces.
January 2013 - 9

ERP - a strategic growth driver for manufacturing firms

Technologies as a driving force

for innovation and development
leading-edge functionality, interconnect the

Embedded technology for seamless

uptake and more effective tool use

ERP with external systems, software and

Technology is an integral part of ERPs and

hardware, provide third-party access as part

conducive to superior efficiency throughout

of a collaborative work environment... all of

the company. Examples abound, such as

these examples rely on the solutions technical

decision-support and reporting tools, electronic

capabilities, especially support for web

document management and workflow

technologies, mobility and third-party add-

mechanisms allowing employees to work

ons. ERPs built upon modern technological

together in an orderly and transparent fashion

platforms leverage service-oriented

via the messaging system. Offering users a

architectures and standardised protocols

personalised area complete with graphical

to deliver seamless application connectivity

representations of their commonly-used

with hardware and software, as well as the

processes and functions shortens the learning

prospect of pooling developments. As such,

curve and promotes higher productivity.

Extend the ERPs scope to encompass

ERPs are composite systems, rather than

monolithic systems, boasting a flexible set of
practical functionality, while losing none of the
advantages of a single, shared repository with
real-time capability.

Purchasing

Sales
Quotes
Orders
Invoices

Delivery notes
Invoices
Contracts

After-sales

Production
PDF

Callout reports
Orders
Invoices

Quality reports
Technical
documentation

Sage ERP X3

ERP documents
Internal and External

Accounting
& Finance

Financial reports
Accounting
records Online
tax returns

CV library
Contracts
of employment
Social security
statements
Pay slips

Human
resources

Application connectivity, power and flexible use: an example of an ERP with an EDM add-on
January 2013 - 10

ERP - a strategic growth driver for manufacturing firms

Furthermore, the technology encourages company employees

to adopt and use the management tools more effectively.
For a long time, steep learning curves put the brakes on ERP
uptake among users, often meaning that companies had to lay
on extra support and training.
The main culprits were counterintuitive applications often with
no bearing on business users needs, and poor knowledge or
even distrust of IT technology.

86%
New technologies
make life easier

Today, the relationship between individual users

and new technologies has changed. 86% of people
believe that new technologies make their life easier.
81% claim that new technologies improve working
conditions (IFOP/Sage, 2012).

81%
New technologies
improve working
conditions

The Internet, social networks, telephones, smartphones and

tablets have become a fixture of everyday life and spawned
a new set of uses that have crept into the workplace. This
phenomenon is accelerating the success of new practices in
companies and the introduction of new-generation tools that
are just as attractive as they are effective.
Drawing on suitable tools and a modernised information system, ERPs can put manufacturing firms on the road to growth
and innovation by implementing new solutions, web-based
customer services, mobile workforce devices, new marketing
channels... and many other value-added ways of achieving a
competitive advantage.

EXPERT PERSPECTIVE

Leveraging its insight into the new challenges facing todays

business world, Sage constantly updates its solutions to ensure
that manufacturing firms can respond to the needs of their
market, their customers and their employees, while finding new
sources of development.
Isabelle Saint-Martin, ERP Market Manager, Sage Mid-Market

January 2013 - 11

ERP - a strategic growth driver for manufacturing firms

Sage, the partner

for manufacturing firms
Sage has been recognised as an expert in
management solutions for 30 years and is a
long-standing partner to corporations, mid-cap
companies and SMEs, whether independent or
group subsidiaries.
As the worlds number three ERP vendor
(Source: Forrester, The State of ERP in 2011,
May 2011) and the number three management
software vendor in Europe (Source: Truffle 100,
European Software vendors ranking 2011),
Sage ERP X3 helps 204,000 users from 4,000
companies across 60 countries to do business.
Manufacturing firms may have a number
of characteristics in common, but they all
come with a wide variety of profiles, such as
their size, their organisational structure, their
hardware and their IT maturity.
Whatever their profile, manufacturing firms can
count on Sage to power their development
with a broad array of ERPs, software suites and
specialised solutions, as well as a network of
customer-oriented partners with expert industry
knowledge.

Solutions geared towards each

company profile
In response to the strong constraints facing
their sector, SMIs (Small and Medium-Sized
Industries) are looking to leverage an endto-end solution that dovetails with their need
for simplicity due to their low IT maturity and
limited manpower.
The challenge with these companies is to
offer a solution that instantly meets their
needs, while boasting a short deployment and
learning curve.
With a more mature organisational structure
and a more complex set of activities, mid-cap
companies and large SMEs are faced with a
series of strategic challenges. ERPs are the
lifeblood of their information system, and
these companies need to tap into all their
possibilities to support their growth.
Subject to the same constraints as the
previous two categories, national and
international groups are on the lookout
for flexible end-to-end solutions capable
of representing a solid alternative to their
group ERP for managing their subsidiaries,
controlling their supply chain and sharing
repositories.

January 2013 - 12

ERP - a strategic growth driver for manufacturing firms

Our customer
testimonials
TESTIMONIAL - SLAT POWER SUPPLIES

Manufacturer of power supply

and current transformer systems

Sage ERP X3 has enabled us to increase production and ultimately double

our revenues, while keeping the same number of people in our support
functions. We have improved our productivity in product development by
25% by automating tasks. Finally, the high level of functional integration -

only accounting and payroll are not included - has created a new driving
force within the company with an array of high-performance tools geared
towards the challenges of todays world.
Andr Guinet, Managing Director

TESTIMONIAL - ASICA

French manufacturing firm specialising

in professional electronics

Sage ERP X3 has been fully integrated into the company and
guarantees seamless information streams from one department
to another. We have utilised the solutions automation capabilities
to drastically reduce the time spent on everyday administrative
tasks. Finally, Sage ERP X3 has whipped our production processes
into peak shape and ushered in contracts with new customers
who previously would have refused to work with us, because
our organisational structure was too homespun. It should not be
forgotten that key accounts audit their suppliers. Not only do they
put product quality under the microscope, but they also see whether

you can meet lead-times... They give you a product quality score and
a performance score. Installing Sage ERP X3 is clearly a major asset
that works in our favour and reassures our customers.
Pascal Prenveille, CIO

January 2013 - 13

ERP - a strategic growth driver for manufacturing firms

Our customer
testimonials
TESTIMONIAL - WORLD MINERALS EUROPE

Expert in mineral extraction and processing

(diatomite and perlite)

We are part of an international group in a specialised business

sector. We need to align with the groups budgeting, reporting
and consolidation systems. Before, we were simply unable to do
that. With Sage ERP X3, we can fetch and aggregate data from

our various sites with just a single click. This obviously saves
considerable time and gives management access to the information
that it needs to run the company.

Estelle Jacq Leteurtrois, IS Functional Manager

TESTIMONIAL - GAILLON GROUP

Frances leading extruder of standard and

enhanced thermoplastic plates, sheets and reels

Employees are making intensive use of the new system, because it

provides a wealth of practical information, especially for our logistics
activities. Sage ERP X3 has also improved inventory management
and shaved a substantial 12% off our stock levels. Another major
advantage is that we can now see exactly how much production
is costing, which is prone to wildly fluctuating raw material prices.
Since we use 45 tons of plastics a day in each of our plants, that
information is mission-critical. Furthermore, the information provided

by Sage ERP X3 means that we can easily consolidate accounts

across our three companies and fill in the reporting templates
required by our shareholders.

Rgis Broujon, Extrusion Department Head

January 2013 - 14

ERP - a strategic growth driver for manufacturing firms

Sage ERP X3
in brief
Sage ERP X3 is specially designed for small and medium-sized companies, independent
SMEs and group subsidiaries. The solution gives manufacturing firms a complete response
to all their business needs (sales, production, logistics, services, finance, customer relations,
human resources and management).
Available in 60 countries and supporting a wide range of languages and legislative systems,
Sage ERP X3 can cope with the most complex processes and deployments across multiple
and/or international sites.
Sage ERP X3 builds on the softwares native possibilities and the skills of its ecosystem to
support the specifics of every business with an array of solutions for each sector and industry
(car, food & drink, pharmaceuticals and cosmetics, chemicals, plastics, and much more
besides).
Combining the benefits of an ERP and specialised solutions, Sage ERP X3 is unique with the
ability to extend its scope to encompass expert functions to suit the needs of industry (PLM,
APS, MES, CMMS, WMS and CRM), as well as built-in technical features (decision-support,
workflow, EDM, portals, and so on).
Leveraging the SAFE X3 development and integration platform, Sage ERP X3 features native
support for web technologies, cloud computing and EDI protocols for mobile terminals.

Sage
Value-added solutions
and skills for industry

January 2013 - 15

Sage
North Park
Newcastle Upon Tyne, NE13 9AA
www.sage.co.uk

Call us on

0845 485 9800

January 2013 - 16