Byte by byte, e-business is gaining ground in the manufacturing sector, an industry that has been notably sluggish to pick up and run with the information technology ball. But if manufacturing companies hope to fully reap the benefits of getting connected, they need to work more closely with IT consultants and resellers.
A recent Benchmark Research survey sponsored by business solutions software provider Sage has shown a marked increase in awareness of the benefits of e-business among players within the manufacturing industry. When compared with results gathered in 2000, which showed high levels of ignorance among decision-makers in the sector - 47% had never heard of online exchanges or e-marketplaces, the recent statistics illustrated a positive growth in e-business responsiveness, with a large percentage now beginning to recognise that making e-business a reality involves more than merely developing a Web site.
The survey, which was conducted in late 2001 among 1 831 manufacturing companies employing over 50 employees, showed the number of manufacturing companies in the UK recognising the advantages of e-retail using online catalogues or shopping carts has risen to 46%, with 41% placing orders directly onto their enterprise resource planning (ERP) systems.
Stephen Howe, divisional manager of Comparex Africa Tetra, believes that IT consultants and resellers are perfectly positioned to inform, educate and work with manufacturers on the benefits of implementing new e-business systems.
"An increasing number of manufacturers worldwide are recognising the immediate and future benefits that implementing an e-business solution can bring to their business. IT consultants and resellers, with their knowledge and expertise, need to be striving to work hand in hand with decision makers in the sector to reinforce this trend by providing advice on the specific benefits e-business can deliver," says Howe.
The survey illustrated a common recognition of the added benefits e-business can bring both internally and externally to business processes, rather than simply as another method of promoting the company.
Forty percent of manufacturing companies in the UK believe that Internet technology plays a significant role in improving communications between internal departments such as production, planning and procurement. Statistics showed the united belief that e-business would enable greater sharing of scheduling data and ensure the way towards improved after-sales service.
While the survey results pointed to increased awareness and positive growth, it also outlined the reasons why many manufacturers remain hesitant to empower their companies with the advantages of e-business. Such barriers to buying into technology included cost implications, security concerns and inevitably, fear of the unknown.
Uncertainties about the economic climate weigh heavy on most industrial sectors. In addition, many manufacturers are still reeling from the shock of implementing ERP systems that were mismatched with their business process, and as a result they failed. The directors of manufacturing companies may be reluctant to embark on yet another heavyweight systems project so soon. Take-up of Internet technologies among manufacturing companies may be slow because the benefits are unclear. E-business is often seen as a tool for sales and marketing staff, and production and procurement specialists do not see the relevance of e-business to their operations.
"People are looking up the supply chain to serve customers rather than looking down it to see how to use the Internet to help fulfil customer needs," says Howe.
The results gathered in the 2000 survey cited security concerns as the single biggest barrier to e-business adoption in the manufacturing sector, with 46% of companies regarding them as significant. But when Benchmark looked at those companies already running applications over the Internet, security fears played no role whatsoever.
"Fear of the unknown is the real prohibiting factor," believes Howe. "People are concerned about losing control of their data. IT consultants and resellers need to educate and inform decision-makers within the manufacturing sector, providing clear and concise guidance to help them understand the direct business benefits that e-business can deliver."
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