Tatiyana Emylia | 16 September 2021
Head of Finance for Arctsone
Gone are the days of simplicity. Where manufacturing processes used to be simple – some manufacturers only made a single product – they now need to evolve to keep up with the production of a plethora of complex products consumers of today demand. It is up to manufacturers to rapidly extend, transform, and adapt their existing systems to increase efficiency and efficacy to meet expectations and keep ahead of the competition.
Arcstone, a manufacturing software company, specialises in digitalisation: they aim to help manufacturers gain control and optimise their production processes for the larger cause of complete manufacturing transparency across the entire supply chain. Head of Finance, Jaison Kimura, gave DigitalCFO Asia the run-down on the digitisation of manufacturing and steps beyond.
Digitalisation is not a matter of if, but when
When it comes to SMEs, businesses need to digitise or risk falling behind, Jaison said. Times are changing – software solutions must be flexible and easily updated so that changes to operations can easily be implemented when needed. To achieve this, manufacturers must invest in IT and be open to adopting newer, more agile technologies. A Manufacturing Execution System (MES) and Enterprise Resource Planning System (ERP) are some elements that need to be well-connected and integrated to provide manufacturers full end-to-end visibility of operations they need on the shop floor. Beyond internal processes, digitalisation via enhancing data collection methods can also boost customer relations through providing today’s more conscious consumers with data transparency.
This is easier said than done. Some businesses may resist change not because they are against digitisation, but do not know where to begin. Lack of knowledge on technology solutions and the cost associated are some contributing factors as well.
Despite these concerns, Jaison stressed that digitisation is still inevitable, for it is only through this evolution that SMEs can stay competitive and serve their customers in the long run. A bold statement, but rings true: a lightweight MES alone can streamline heavy manual-based production processes to more automated ones, simplifying workflow and driving greater efficiency.
Adapting to Industry 4.0
As a start, Jaison recommended CFOs have a look at tools and digital systems that are scalable and integratable within their existing systems. Most manufacturers already have their own systems, so adapting to industry 4.0 – the era of smart factories – would mean integrating new tools with them for operational enhancement. The core idea is not to replace, but to augment, integrate, and enhance what is already there.
When it comes to cost, small and steady is key. Jaison advises against jumping into the deep end of complex technologies like AI tools and vision detect systems but rather take digitalisation a step at a time. The first thing CFOs need to focus on is to digitise their operations, before moving on to optimisation and the like. Most importantly, CFOs need to be open minded. This is an iterative process – there would be much trial and error before finding the perfect fit – but it will happen.
Evolution is a two-way street
Digital growth isn’t limited to manufacturers. Arcstone themselves continue to automate and transform where they can. They switched over to an accounting system, Xero, from traditional human accountants within the past year. Not only does the system manage and process all accounts, but also hosts the company’s financial information on a server for more accessibility and collaboration. Xero’s integration into Arcstone’s existing systems cut down time needed for paperwork and enabled finance staff to focus on more analytic work and ways to optimise our business operations.
Automation and transformation on the whole eliminates inefficient workflows and manual tasks, increasing workload savings and efficiency where attention can be redirected to more important work. With offices in India, Vietnam, and Indonesia, it’s important that Arcstone employs digital systems providing accurate and consistent information for standardisation, so they can serve their clients to their fullest.