Top 4 Challenges Faced by CFOs of Manufacturing Companies

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When discussing the future of manufacturing, it’s easy to get carried away and imagine a world where technology will solve all the problems and completely automate operations.

Powerful tools like AI, Machine Learning, intelligent devices and machines and mixed reality apps are all well on their way to creating factories of the future and increasing efficiency, but that doesn’t mean there aren’t challenges to consider when using them.

This blog aims to present potential issues CFOs in the manufacturing industry might face when guiding their organization towards a digitized and optimized future.

Transparency

Even though CFOs shouldn’t be focused solely on hitting numbers, it is a major advantage to have a detailed overview of the impact of every intricate mechanism behind manufacturing processes. This means measuring key performance indicators has to be taken to the next level – collecting data is one thing, but knowing how to translate it into concrete answers to questions regarding operational efficiency can be quite a challenge. Understanding manufacturing processes from the inside out enables CFOs to cut costs and increase efficiency at the same time. For example, possessing exact knowledge about potential machine breakdowns and failures means companies can prepare for such scenarios ahead of time, instead of having to rely exclusively on historical data.

Making entire manufacturing systems and networks transparent means CFOs will know exactly how every piece of the puzzle is affecting profit margins and overall efficiency.

Getting the most out of your workforce

The benefits of a fully engaged, satisfied workforce are innumerable. By using technology to empower employees to do more and spend less time on menial tasks, efficiency goes up significantly.

Manufacturing companies that make sure workers are happy and have the best tools to accomplish their goals are usually the most productive ones. Technology itself can’t overcome the different challenges posed by the manufacturing industry, but it can provide your workforce that extra space and time to think, innovate, and enjoy work.

For example, mixed reality apps can make life easier for every manufacturing company, offering frontline workers flexibility, practicality and the ability to solve problems remotely. This spares CFOs the headaches of additional travel- and work-related costs.

CFOs have to make sure they communicate with CEOs and CIOs in order to find the best possible solutions regarding their organization’s workforce, whilst remaining highly efficient.

Justifying big investments

Even though innovation efforts in the manufacturing world are based on trying to devise lean strategies and sparing as much resources as possible, they still require a great deal of effort and present a serious financial obstacle.

CFOs have to understand that by investing in technology now, companies can open up avenues and paths towards even greater efficiency and gains. Using tools such as AI, Machine Learning and advanced analytics, manufacturing processes can be improved on many levels.

Enhanced supply chain and quality assurance capabilities, demand forecasting and inventory optimization are just some of the factors which could contribute to greater profit margins in the future.

CFOs can use these arguments to drive transformation initiatives and make sure their organization is ready for inevitable market shifts and disruptions.

Lowering production costs

Gradually increasing profits is among the biggest priorities for any CFO, which also means lowering operational costs. In order to make sure wasteful business processes are reduced to a minimum, manufacturing companies can use several solutions and approaches. Setting up a customer-centric strategy is definitely at the top of the list – taking the time to define and understand your customers’ behavior patterns and needs means you’ll be more agile when it comes to adapting and improving your products on the market.

Unifying your efforts under one roof using a solution like Microsoft Dynamics 365 can also lead to more cost-effective business processes. Manufacturing operations can best be controlled through a centralized, real-time system that can make contextual suggestions on how to improve efficiency.

On top of that, adopting a just-in-time approach can also spare CFOs the trouble of having to worry about out-of-stock or downtime scenarios. Organizations can leverage digitalization to decrease costs by reducing overall inventory, freeing up assets and lowering obsolescence rates. A much more time- and cost-effective supply management process allows for constant improvement, while advanced data analytics and AI protect manufacturers during market shifts.

Conclusion

We are undoubtedly headed towards the most exciting and innovative era in human history, but CFOs still have to consider several challenges on the path towards optimizing manufacturing processes and work with CEOs and CIOs in order to overcome them.

Luckily, they’re not alone. With Merit Solutions, organizations can implement a single platform for all their needs and hit their numbers by doing much more than cutting costs. Browse our website for more information on how to achieve this goal and transform your initiatives. 

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