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Overcoming Manufacturing Industry Challenges with MYOB Advanced Manufacturing

In the dynamic realm of manufacturing, confronting manufacturing industry challenges is a given. But what if these challenges could be transformed into stepping stones for success? Before we delve into how MYOB Advanced Manufacturing can be your ally in this transformation, it’s crucial to understand the backdrop.

In our recent blog post, we explored the resilience and innovation of Australia’s mid-market manufacturing sector highlighting the findings of a Dynata research study for MYOB. This study provided a comprehensive insight into the challenges and innovative strategies adopted by these businesses.   

Now, equipped with that knowledge, let’s explore how MYOB Advanced Manufacturing can be the game-changer your business needs, turning challenges into lucrative opportunities. Are you ready to turn challenges into opportunities? Let’s get started. 

What Are the Challenges That the Manufacturing Industry Faces?  

1. Supply Chain and Operational Complexity

Supply Chain manufacturing industry challenges

The complexity of managing supply chains and operations is a significant hurdle for many businesses. In the Ai Group CEO Survey for 2023, business leaders identified supply chain disruptions as one of the main challenges afflicting the Australian industry. Despite expectations of improvement with the easing of pandemic-era restrictions in 2022, the situation worsened. 

In 2021, 65% of businesses reported supply disruptions and only 52% anticipated similar occurrences in 2022. However, these expectations proved incorrect as the number of businesses affected surged from 65% to 79% in 2022. For about a third of these businesses, the disruptions were significant enough to interrupt normal operations. 

No sector was left unscathed. Manufacturing was the hardest hit, with 88% affected, while construction fared relatively better at 72%. Surprisingly, even 79% of services businesses, an industry not typically associated with supply chain dependencies, suffered disruptions. 

Without a comprehensive map of the supply chain, it becomes difficult to anticipate disruptions and respond proactively. This lack of foresight can lead to costly delays and inefficiencies, affecting both large businesses (89%) and small businesses (79%). 

Solution: Simplifying Complexity with MYOB Advanced Manufacturing 

Simplifying Complexity with MYOB Advanced Manufacturing - manudfacturing industry challenges

MYOB Advanced Manufacturing provides you with a robust solution to tackle operational complexity. Its centralised platform allows you to anticipate raw material & sub-assembly availability, providing greater accuracy of the production schedule completion or delivery date.  

With features like Material Requirements Planning (MRP), Rough Cut Planning (RCP), and Capable to Promise (CTP), you can set accurate and reliable delivery dates based on material and resource availability. This empowers you to better anticipate potential supply chain disruptions by following up on procurement. 

2. Lack of visibility on costs, and real-time data

Lack of visibility on costs, processes and real-time data

In the fast-paced world of manufacturing, visibility is key. Without a clear view of costs, processes, and real-time data, businesses are left in the dark, making it difficult to make informed decisions. A lack of visibility can lead to poor decision-making, delayed responses to performance issues, and ultimately, a loss of time and money.

This lack of visibility is not just an inconvenience; it’s a significant hurdle that can hinder your business’s growth and profitability. It’s a concerning problem that needs an immediate solution. 

Solution: Complete visibility to make informed decisions 

Complete visibility to make informed decisions 

MYOB Advanced offers a solution to this challenge. It provides configurable manufacturing dashboards with pre-defined metrics and graphs, giving you a clear view of all areas of your business, not just manufacturing.

This visibility allows for faster, more informed decision-making, enabling you to identify and address potential risks. 

With MYOB Advanced, you’re not just reacting to issues; you’re proactively managing your operations based on accurate, real-time data. You’re not just saving time and money; you’re also improving your decision-making and maintaining your competitiveness. 

3. Improving Efficiency 

Improving Efficiency - manufacturing industry challenges

Efficiency is the key to maximizing the utilisation and effectiveness of the production process. It’s the key to reducing costs, increasing output, and ultimately, driving profitability.

However, achieving efficiency is easier said than done. Many manufacturers resort to cutting corners, often at the expense of product quality, in an attempt to reduce production costs.

Solution: Boost efficiency through better resource utilisation 

Production Schedule Board

The Production Schedule Board within MYOB Advanced Manufacturing drives optimised planning of your production, it allows users to automate the scheduling of planned production by assessing available work centre and machine capacity.

Users can also reschedule orders as needed to accommodate high-priority customer orders, helping users quickly respond to interruptions, speed-up decision-making, and easily identify costly delays. 

With MYOB Advanced, you’re not just improving efficiency; you’re doing so while maintaining, or even enhancing, product quality. You’re not just reducing costs; you’re also increasing customer satisfaction and loyalty, which can lead to higher sales and profitability. 

4. Controlling inventory

Controlling inventory - manufacturing industry challenges

Inventory management is a critical aspect of any manufacturing business, yet it remains one of the most significant challenges in the industry. Many manufacturers, particularly smaller ones, still rely on manual methods to manage their inventory. This approach is not only time-consuming but also highly inefficient

Overstocking not only ties up valuable capital but also restricts its potential use in other crucial areas of the business. Conversely, carrying insufficient stock introduces its own set of challenges:

  • Extended lead times in placing and receiving orders.
  • Delays in the production of finished goods.
  • The risk of missing out on sales opportunities due to stock unavailability.

Moreover, the drawbacks of manual inventory management are evident across various facets, including:

  • The challenge of maintaining information in a centralised system.
  • The intricacies of managing cost and selling price rules.
  • The need for barcoding and mobility, especially during processes like receipting goods, pick & packing, and stocktaking.
  • Handling multiple warehouses and specific bin locations.
  • Setting and adhering to replenishment rules.

For a deeper dive into inventory management capabilities, we invite you to visit our previous articles on ERP Solutions to Inventory Problems and Guide on Efficient Cost Management.

Solution: Integrated supply chain 

Benefits of an integrated supply chain 

MYOB Advanced Manufacturing offers a robust solution to the inventory management challenge. The integrated Material Requirements Planning (MRP) engine calculates factors such as safety stock levels, lead times, reorder points, forecasts, and customer demand to automate procurement and production plans. This tool: 

  • Provides a comprehensive view of all supply and demand 
  • Allows creation of production and purchase orders directly from the planning screen 
  • Ensures all requirements are recognised and satisfied for smooth production operations 
  • Plans every requirement for every item, ensuring no detail is overlooked 

This level of detail and automation not only helps to avoid stock shortages and overstocking but also reduces the risk of unidentified damages.  

5. Maintain a healthy margin on production

Maintain a healthy margin on production - manufacturing industry challenges

The Australian manufacturing industry faces a big challenge: how to keep making a healthy margin when things keep changing. Healthy Margins help companies stay strong, especially when times are tough. It lets them invest in new tools and methods, stay competitive, and offer good prices without cutting quality.  

But with changing customer needs, rising costs of materials, and global uncertainties, it’s hard to keep profits steady. Plus, a good profit means companies can pay their workers well and offer them growth opportunities. So, the industry is trying to figure out how to keep making a good profit while dealing with all these changes. 

To ensure you maintain a healthy margin in your manufacturing business, consider leveraging these pivotal features of MYOB Advanced Manufacturing:

a. Bill of Materials and Routing

Bill of Materials and Routing
  • Connecting materials, work instructions, and overhead costs to an operation ensures that resources are allocated efficiently, reducing wastage and unnecessary expenses. 
  • Multiple levels of bill of materials provide a comprehensive view of the entire product structure, allowing for better cost management. 
  • The ability to calculate costs at average, standard, and actual cost, along with incorporating tooling and overhead costs, ensures accurate pricing and cost management.

b. Production Management  

Production Management 
  • By capturing the entirety of your manufacturing costs, including elements like material, labour, and machinery, you’ll have a transparent view of where your expenses lie. 
  • Monitoring the difference between actual and standard/planned costs lets you pinpoint inefficiencies and address them swiftly, ensuring you stay on top of your profit margins. 

c. Material Requirements Planning (MRP)

Material Requirements Planning (MRP)
  • With a clear view of all supply and demand, you can manage your inventory efficiently, ensuring you neither overstock nor run short. 
  • The comprehensive multi-level planning ensures all your production requirements are met, streamlining operations and reducing potential delays. 

 d. Estimating

  •  By preparing estimates for both existing and custom items, you’ll gain foresight into potential costs and revenues, allowing for better financial planning. 
  • The flexibility to create and revise estimates based on existing data ensures your pricing and cost predictions remain accurate, factoring in expected labour, material, and overhead costs. 

Harnessing the Power of Technology for a Resilient Future 

The manufacturing industry, as evidenced by the Ai Group CEO Survey for 2023, is grappling with a multitude of challenges. However, these challenges are not insurmountable. With the right tools and strategies, businesses can turn these challenges into opportunities for growth and success.

MYOB Advanced Manufacturing emerges as a robust solution that can help businesses overcome these challenges. Its centralised platform simplifies operational complexity, provides visibility, enables cost alignment with demand, boosts efficiency, and aids in effective inventory management. 

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Ready to overcome the challenges in your manufacturing business and drive growth and success?

It’s time to experience the power of MYOB Advanced Manufacturing firsthand. Don’t wait for the future; embrace it today.

Book a demo with our expert MYOB ERP consultants at AlphaBiz Solutions and take the first step towards a more efficient, profitable, and resilient future for your manufacturing business. 

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