Guest Column | March 10, 2014

Five Reasons VARs Should Focus On Manufacturing

VARs Should Focus On Manufacturing

By Mike McGuriman, MSSSI Vice President for Manufacturing & Field Service, Motorola Solutions

To stay competitive, all companies have to continually place bets on where to invest their time and resources; assess how to strengthen solution offerings; and innovate around them. We are all evaluating the industry sectors that deliver the most promise and provide the biggest opportunities for business growth. If manufacturing isn’t on your short list, it definitely should be. Here are five big reasons why:

1. Manufacturing Is Big Business

Manufacturers remain the unsung heroes of invention and innovation. Behind the scenes, they are increasingly investing in technology solutions to connect them to the real-time information and intelligence they need to shave off seconds, drive down defects, and work more productively and safely. Their impact on the economy is hard to ignore. In 2012, manufacturers contributed $2.03 trillion to the economy, up from $1.93 trillion in 2011. For every $1.00 spent in manufacturing, another $1.32 is added to the economy, the highest multiplier effect of any sector. U.S. manufacturers also are among the most productive in the world, far surpassing the worker productivity of any other major manufacturing economy. And if that’s not enough, consider U.S. manufacturers perform two-thirds of all private-sector R&D in the nation, driving more innovation than any other sector. And with more and more companies considering a move to bring offshore operations back home, business opportunities will continue to flourish.

2. Renewed Interest In “Made In The U.S.A”

While it’s certainly a source of national pride, the decision to reshore — return outsourced manufacturing operations back to U.S. — only increases the attractiveness of this sector. In fact, Apple, Lenovo, and GE have announced plans to move manufacturing back to the U.S. And they are not alone. More than 200 companies, including domestic organizations, have brought production to the U.S over the past three years, which has helped generate more than 50,000 jobs. Key drivers for this resurgence are primarily financial. Wages in China have increased 500 percent since 2000 and are projected to continue to rise at a pace of 18 percent per year. Oil prices have tripled since 2000, dramatically affecting shipping costs. Concern over the lack of IP protection and communication issues are also encouraging many companies to keep manufacturing operations closer to marketing and engineering. For those companies planning to expand production in the U.S., it will be important to evaluate the cost benefit of doing so in their favor. Profitability will ultimately be tied to how efficiently its operations can run — and technology will increasingly play a role in that equation.

3. Shifting Technology Priorities

According to Gartner, the top four technology priorities of manufacturing CIOs through 2015 include analytics and business intelligence, mobile technologies, enterprise resource applications, and collaboration technologies. Investments that help increase worker productivity, decrease costs, and increase sales, revenue and customer service levels are the first to get funded.

The 2011 Motorola Solutions Manufacturing Barometer study found that inventory management solutions and logistics applications comprised key investments in manufacturers’ material warehouses, maintenance shops, remote facilities and finished good warehouses. Asset tracking, management and maintenance solutions were increasingly being used in batch processing and assembly plants as well as for parts and tools in maintenance and repair operations. Not surprisingly, field service applications have become an integral part of field sales to increase efficiencies and automate reporting processes.

4. Mobility Changes Everything

Mobility provides a force multiplier for manufacturers. It allows them to extend mobile voice and data right to the point of activity — both inside and outside the four walls. Real-time data entry replaces the collection of information on paper forms that are then entered into a computer. The ability to scan a bar code, RFID tag or direct part mark (DPM) combines with drop down menus and check boxes to automate data collection, reducing errors, and speeding the flow of information to key enterprise systems. New levels of efficiencies and profitability can be achieved. Yet, despite the growing penetration of mobile devices and tablets, many manufacturers lack a cohesive mobility strategy to help them maximize the business benefits of these investments. Given that less than 20 percent have aligned mobile strategies mapping business process and technology to user adoption, efficiency and business benefit, this is one area where solution providers can have a significant impact. Building mobility solutions that deliver measurable results will help speed deployment and utilization of mobile technologies.

5. Better Visibility and Tracking

Regulatory requirements related to track and trace are on the rise for manufacturers, particularly those in the food and beverage and pharmaceutical space, have driven the need to create an end-to-end pedigree for products. Mobility solutions — from asset to device to wireless infrastructure — enable the automatic, real-time tracking of parts, and ingredients at any point in the manufacturing process, even after delivery to the customer and all with just a split second scan, a bar code or RFID tag. The same holds true for the tracking and maintenance of critical assets, from roll cages and pallets to totes and tools. Asset management solutions provide the needed visibility to improve accountability, reduce theft and keep business operations running efficiently — and profitably.

The Time Is Now!

These are exciting times in an exciting space. Manufacturers are investing in a wide variety of mobile technologies and solutions to upgrade existing systems throughout their operations. Now is the time to work together to deliver more value to this sector. There’s a lot of money to be saved out there, new efficiencies to create. Walk your customers’ facilities, come to the table with new ideas to improve how they work. Meet regularly with key customers to understand their needs and then introduce new end-to-end mobility solutions that market to those needs and drive measurable ROI.

Today’s manufacturer’s must address a number of growing business issues, from changing market dynamics, heightened competition and faster product lifecycles to a demand for more customized products. To succeed, they need to find a way to cut costs without impacting quality, customer service or product availability. And they need to innovate. You can help!

To learn more about how insight into how Motorola Solutions is partnering with manufacturers to help them achieve what will always set them apart, please watch Manufacturing — Building Efficiency Growing Economies.