As we enter the new year, it is essential for manufacturing companies to stay updated on the latest trends that are shaping their industry. In 2023, significant transformations unfolded, we are seeing advancements that are continuing to have a profound impact on the manufacturing landscape as we move into 2024.
In this blog post, we will explore the prominent trends that emerged and their potential influence on manufacturing companies in the upcoming months.
Manufacturing companies that embrace these emerging trends and take proactive steps to adapt to the ever-changing landscape are primed to flourish in 2024. The transformative power of digitalization, the resilience of supply chains, the imperative of sustainability, the advancements in robotics, the focus on reskilling the workforce, and the integration of 3D printing are all crucial elements that will define the future of the manufacturing industry. By staying ahead of these trends, Aktion is helping companies not only overcome challenges but also unlock boundless opportunities for growth and innovation in the dynamic realm of manufacturing.
Increase Total Revenue and Digital Engagement While Reducing Your Costs
As a manufacturer, especially if you’ve been in business for decades, manufacturing and eCommerce may not be words that go together. Indeed, eCommerce may not be on your radar. Or, if it is, it’s a small blip that is disregarded in face of other, more pressing matters, like getting your products into the hands of your customers through your tried-and-true distributor, wholesaler, and retail channels.
This isn’t to say you haven’t entered the digital realm. Your website is an informational (e.g., this is who we are, and this is what we do) but not functional (e.g., used as a selling portal) part of your business. However, suggestions of taking the website further, such as using it to sell directly to customers (DTC), begs the question, “Why fix that which isn’t broken, especially with an impersonal online selling portal?”
While a fair question, the digital economy and the COVID-19 crisis have sparked major changes in the marketplace. Manufacturers that don’t evolve with these changes may be left behind, especially as competitors offering an eCommerce option are already seeing the benefits, including an increase in their revenue, efficiency, and digital engagement (of which they had very little beforehand), as well as a reduction in their overall operational costs.
The Importance of Your Digital Experience
A 2019 study by the UPS found that different generations are using different methods for researching their buying options. Not surprisingly, research via in-person discussions with company sales reps is lagging behind research via a company website, an online search engine, and social media—by all demographics. This shift in research patterns mimics the shift in purchasing items online, which has been going on for some time—since the early 90s, to be exact. Amazon was one of the first eCommerce sites, and it has been joined by anywhere between 12 million and 24 million eCommerce sites across the globe, according to some estimates.
The convenience of shopping online skyrocketed eCommerce’s popularity, and the pandemic lockdowns made it a necessity for many. An Insider Intelligence article states, “Tech-savvy consumers looking for quick, seamless purchasing options will continue to lean on ecommerce throughout the next few years—and more consumers will jump on the bandwagon. We forecast US retail ecommerce sales will grow 16.1%, reaching $1.06 trillion in 2022.”
The importance of creating and providing a user-friendly, engaging digital experience for your manufacturing customers (while simultaneously optimizing your revenue) cannot be overstated. Keep in mind, however, that the digital experience isn’t limited to an eCommerce platform. You and your team will need to consider adding or improving upon your social media interactions, whether that’s Facebook, Twitter, Instagram, YouTube, or others. This is a topic for another day.
Creating Opportunities for Innovation
Making changes to manufacturing operations is never easy, but if you’re ready to become a manufacturing and eCommerce organization, then there are some steps to you’ll need to take, starting with researching your eCommerce platform options. You could start with an alternate platform, like BigCommerce, or with a comprehensive and modern ERP solution, like Acumatica, that provides both manufacturing and eCommerce capabilities.
If you implement ERP software that allows complete integration of your manufacturing, inventory, and office functions, you’ll have access to synchronized, real-time data, can manage inventory and production from a single system, and combine customer demand with production forecasts. Solution features should include Financial Management, Customer Management, Project Accounting, Advanced Inventory, Bill of Materials and Routing, Business Intelligence, Sales Order Management, Material Requirements Planning (MRP), and more.
For eCommerce purposes, the solution you choose should provide payment, order, fulfillment, and inventory tools that can be customized for your organization. A multi-channel ordering experience for your customers with order automation and warehouse management capabilities built into it is another requirement, as is a customer self-service portal.
A customer self-service portal allows customers to check orders, request support, and resolve issues online. And while the customers will enjoy instant service, you’ll be able to use their feedback to improve and personalize their experience.
It’s important to note that while having the foundational technology with manufacturing and eCommerce capabilities is critical, having a technical and sales team that can handle emerging needs as you move forward is, too. The ERP solution you choose should be provided by an ERP vendor and team that you can trust and rely upon for years to come.
Together, you’ll be able to create opportunities to innovate in the digital world.
Example of a Successful Manufacturing eCommerce Portal
According to a PwC article, 66% of U.S. manufacturers believe that implementing digital marketing and sales over the next two years is a “high” or “very high” priority, but there are manufacturers who already took the eCommerce plunge. Ray Allen Manufacturing is one of them.
The company manufactures canine equipment for military and police departments and has been since 1948. It bought a competitor in 2009 and then diversified by acquiring a company that makes products for dog training clubs, schools, kennels, and individual trainers. Ray Allen Manufacturing also operates Ray Allen B2B, which has an Amazon store. Though a thriving company, it was having challenges connected with its two different systems and inventories. The legacy system needed to be replaced, especially as it was unable to integrate with the company’s eCommerce software.
After researching for a year, former President Steve Cates selected Acumatica Cloud ERP. In Ray Allen Manufacturing’s customer success story, Cates says, “I had not heard of Acumatica but started doing some homework and looking at demos. I quickly realized Acumatica’s open platform was well-aligned with our company’s goals.”
The company implemented multiple editions, including Acumatica Manufacturing Edition and Acumatica Retail-Commerce Edition. In addition to streamlining their processes, gaining robust reporting, utilizing a central database, managing their accounting for various subcompanies in one place, eliminating manual, paper-based tasks, and being able to log in from anywhere, at any time, Cates says they’re able to manage their eCommerce needs easily.
“We chose Acumatica primarily because of its flexibility and its ability to integrate with an eCommerce platform,” says VP of Operations John Oakley. “[We] were able to integrate all of our websites directly into our ERP. It just really streamlined the whole process for us. We use it for purchasing, customer service—our inbound customer service agents are using it. It’s been a really solid back end [solution]. It essentially runs all aspects of our company.”
How We Can Help
As you contemplate the benefits of online selling through Acumatica, Aktion, a national ERP Value Added Reseller (VAR), IT infrastructure and cloud & managed services provider, would be happy to answer any questions about how they can help you embrace new digital trends through an eCommerce platform. Contact their team at any time.
And before you go, here are a few Acumatica eCommerce dos and don’ts for manufacturers:
Are you coming to Acumatica Summit 2022 in Las Vegas?
If that’s a yes, please join us for an exclusive Aktion Customer Event at the La Cave Wine and Food Hideaway Terrace within the Wynn Las Vegas on Monday, January 24th during the Acumatica Summit 2022 (before the Attendee Celebration Party).
The La Cave Wine and Food Hideaway is located inside the Wynn Las Vegas along the Fairway Esplanade hallway behind the casino.
With cocktails and passed hors d’oeuvres, this is a great way to network with your Aktion friends and other Aktion customers in a relaxed setting.
*Note, the restaurant has a resort casual attire policy and requires appropriate footwear.
Click here for more information on the 2022 Acumatica Summit.
Are you coming to Acumatica Summit 2021 in Las Vegas?
If that’s a yes, please join us for an exclusive Aktion Customer Event at the La Cave Wine and Food Hideaway Terrace within the Wynn Las Vegas on Monday, July 19th during the Acumatica Summit 2021 (before the Attendee Celebration Party).
The La Cave Wine and Food Hideaway is located inside the Wynn Las Vegas along the Fairway Esplanade hallway behind the casino.
With cocktails and passed hors d’oeuvres, this is a great way to network with your Aktion friends and other Aktion customers in a relaxed setting.
*Note, the restaurant has a resort casual attire policy and requires appropriate footwear.
Click here for more information on the 2021 Acumatica Summit.
Businesses of all types and sizes find themselves relying more and more on technology. To stay functional, every modern company needs some type of IT assistance. Running a company is challenging enough without dealing with constant technology headaches. But once you decide you’re ready to hand off some or all of your IT responsibility to a managed services provider, how do you figure out who to talk to when there are so many choices? It can be daunting to evaluate and select the right technology partner for your business.
Below are three key characteristics to consider when deciding on a managed services provider.
1: Industry Expertise
Start by checking potential MSPs to be sure they’re familiar with your industry. So many generic MSPs really aren’t able to address industry-specific problems that might arise. With industry expertise comes knowledge of the ins and outs of your technology. This means knowing what requirements a particular piece of software needs to operate smoothly or which upgrades are necessary in order continue business as usual. The goals should be to keep your infrastructure healthy and eliminate downtime. When you partner with a managed service provider that knows the platforms your business runs, you gain confidence in the health of your technology.
2: Responsive Hotline Support
This builds upon the previous point, in that industry expertise is also extremely valuable in a hotline support team. A team of technology experts who can answer your calls quickly and efficiently should be another key factor in your evaluation of MSPs. Not all help desks are created equally, and unfortunately some businesses find themselves getting used to long wait times and speaking with people who can’t directly address their issues.
A good technology partner brings a full bench of support to every customer support issue. Whether a request is best resolved by a network engineer, an application consultant, or a software engineer, this program ensures that the appropriate resource is assigned to you. Be sure your new MSP has a proven case management and escalation protocol for timely and efficient issue resolution.
3: Remote Monitoring
Active monitoring and management of your system will keep it running smoothly. Remote monitoring items can include a cloud environment or server hardware, operating system status, and network performance. An MSP can also give you additional support such as database troubleshooting related to system uptime. You also might ask the providers if they can give you timely notice of developing issues, provide security, and perform regular system maintenance.
Providers now need to be able to offer a multi-layered approach to ensure each customer’s success. As with any partnership, you want to be positive the MSP you choose fits your needs and understands your overall business goals.
Because Aktion excels at each point listed above, we believe that these unique qualities set us apart from the competition. Our experience as a technology provider focused on the construction, distribution and manufacturing industries gives our customers complete technology peace of mind. Our goal is to protect your technology, both primary business applications and the platform that they run on.
If you’d like to discuss Aktion’s Managed Services features and benefits, please reach out and I’d be happy to get you started on your Managed Services journey.
Manufacturing companies are often plagued with inefficiencies. These issues tend to cause a domino effect that results in customer turnover and missed sales opportunities. If you experience any of the following problems, it might be time to think about a technology upgrade.
A manufacturer faces high expectations from customers. When you struggle with taking and delivering correct orders on time, it really impacts your customer retention. We have found that one central application helps our manufacturing customers to provide a polished and streamlined customer experience. Whether through a secure customer portal or a connected online storefront, you and your customers need real-time automated communication. An ERP like Acumatica can deliver an exceptional customer experience, so customers are able to buy more with less effort.
Automations aren’t just for making your life easier, although they can certainly save a lot of time. But having automated notifications for your customers empowers them with self-service. What if you could let your customers know through automation when their products have shipped or when returns are received? Acumatica also lets you set up automations for sending customer invoices and their statements can be easily downloaded. It’s a significant time-savings on your end and provides much needed customer empowerment.
Empowering your customers with information is also a great way to grow sales. The simpler the customer experience is, the more likely they are to keep coming back and order more of your product. But this increase in demand is a juggling act between production and inventory. Many of our current Acumatica customers say they’ve been able to quickly respond to the increase in sales yet reduce inventory. This saves you money while giving your customer the best experience possible.
If you’re feeling limited by your current disconnected group of manufacturing solutions, consider migration to Acumatica. With every aspect on one single platform, you’re able to empower your employees and customers with real-time information from anywhere.
Scale as your manufacturing business grows and adapt to changing customer demand. With Acumatica, not only are you creating loyal customers, you’re also able to add users at no extra cost. This is a big savings for a growing manufacturer.
Learn more about Acumatica Manufacturing Edition here or reach out to me directly. We would be honored to add your business to our growing group of happy Acumatica customers.
When it comes to sales and use tax, the manufacturing industry is riddled with potential land mines. Challenges arise at the outset, when determining nexus — the connection that establishes a sales tax obligation. They continue with registration, collection, and remittance. And since manufacturers often deal in exempt inputs and sales, managing and validating exempt transactions tends to be one of the most complicated aspects of compliance for businesses in the manufacturing industry.
Sales tax compliance can quickly become overwhelming for manufacturers. To make it less so, it’s helpful to break it down into five buckets:
There are many ways for a business to establish nexus with a state, including having ties to affiliates in a state (affiliate nexus) or having a physical presence in a state. Nexus can also be created solely through economic activity (economic nexus).
Today, 43 states and the District of Columbia enforce economic nexus. Most provide an exception for small businesses with sales beneath a certain threshold (e.g., $100,000 in sales or 200 transactions). But since thresholds in many states include exempt sales, economic nexus laws often apply to manufacturers.
Register with the state tax authority as soon as nexus with a state has been determined. Yet if you think you may previously have established nexus, consult with a trusted tax professional prior to registering. Businesses with a past tax liability often benefit from entering into a voluntary disclosure agreement with the state.
Once registered, you need to calculate and collect the correct amount of sales or use tax on all taxable transactions. It’s a big job. There are more than 13,000 tax jurisdictions in the United States, and each has a unique sales tax rate and jurisdiction code. Adding to the complexity, states have unique product taxability rules, so what’s exempt in one state may be taxable in another. Rules pertaining to manufacturing inputs and outputs can be particularly complex.
Managing exempt transactions is perhaps the most challenging aspect of sales tax compliance for manufacturers. Every exempt purchase or sale must be validated with a proper exemption or resale certificate, and failure to properly document exempt sales is a common cause of negative audit findings. Automating the collection, storage, and renewal of exemption certificates greatly improves the process and reduces errors.
The final step in the sales and use tax cycle is filing and remittance. Processes that vary from state to state, so arming yourself with information is essential: You need to know filing frequency, due dates, and format — some states require some or all businesses to file and remit electronically.
For more information about achieving end-to-end sales tax compliance, check out 5 Steps to Managing Sales Tax for Manufacturers
Over time businesses makes decisions to grow in new directions which can lead to challenges in the future. We’re seeing three distinct types of companies in our target industries of Construction, Distribution and Manufacturing that have adopted new avenues of growth. We call these multi-industry hybrid companies.
One type is a distribution company that starts a lucrative value-add business to convert lower margin products into higher margin by offering modified or tailored products. An example is a packaging product distributor that creates custom packaging for a product used by an Original Equipment Manufacturer (OEM) looking to reduce its manufacturing labor costs.
The second type is a manufacturing company that reaches capacity in its production operation and decides to add more buy-sell products. Expanding a manufacturing operation can be costly so dedicating some floor space to warehouse consigned or purchased inventory can add margin without a large investment.
The third type is a manufacturer that manufactures and installs a product. Aktion has a few clients that make cast concrete products and also need to install and service their products. This example has combined needs for inventory, manufacturing and project accounting which is an interesting combination of requirements.
Again these are just three examples. There are many more and I will go into a detailed analysis of specific challenges and solutions for these Multi-Industry hybrid businesses.
Of these three types, the majority are running their business using multiple disparate, disconnected software systems or, even worse, using a central accounting system and manually managing these additional requirements using spreadsheets and other home-grown methods.
As an ERP reseller and technology adviser, Aktion receives inquiries weekly from companies who need to modernize their business software and are looking for a single, integrated ERP system that meets the company’s diverse needs and growth capacity.
We anticipated these diverse and evolving requirements and earlier this year invested in adding staff, services, skills, and deliverables to provide these multi-industry companies with the software and support they need to run their business. The Multi-Industry (MI) Division was launched in January 2020.
The MI Division includes application consultants and software engineers focused on servicing the complex needs of a multi-industry company. To ensure the success of the new division, Aktion transitioned senior staff from our Distribution, Construction and Manufacturing practices.
The cornerstone solution of the MI Division is Acumatica Cloud ERP. Four years ago, Aktion became an Acumatica Gold Partner. Acumatica is a modern, cloud-based, integrated ERP solution that delivers everything a hybrid company needs to manage operations. Acumatica developed its own XRP platform which gives each customer control over integrations and upgrades, even in a SaaS environment.
Acumatica offers Construction, Distribution, Manufacturing, Field Service and Commerce editions. Each of these editions may be combined to include cross-over functionality needed for hybrid company requirements making it an ideal platform for Multi-Industry division customers.
In future blogs, I’ll go into more detail about some of the common hybrid business scenarios we’re addressing. Every business is unique and presents its own set of challenges, however; we’re seeing commonality and repeat scenarios to solving these complex challenges.
If you’re a hybrid company that’s struggling to find a solution, just know there is one available – Acumatica.