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According to a recent study by Oxford Economics, midsized companies in the industrial manufacturing sector are setting their eyes on ambitious growth targets. The research, authored in partnership with SAP, revealed that 38 per cent of industry leaders have identified market expansion as their top priority.
In industrial manufacturing, midsized companies face a significant challenge: competing with larger enterprises with deeper pockets, more resources, and stronger brand recognition. They must manage complex functions similar to their larger counterparts, from sourcing and fabrication to machinery maintenance and overall business operations.
In this challenging landscape, Oxford Economics stated in the paper “Reinventing Industrial Manufacturing: How Digitization Can Help Midsize Manufacturers Grow and Compete” that technology can be a critical tool for midsized manufacturers to level the playing field.
Growth targets and what’s holding them back
As manufacturers chart their course for the future, business growth remains a central focus. Oxford Economics’ research revealed that market expansion is the top priority, with 38 per cent of executives naming it their primary goal.
Close behind is innovation, with 37 per cent focusing on developing new products, services, and business models. Attracting new customers and growing revenue are equally important, each prioritised by 34 per cent of industry leaders.
Notably, midsize manufacturers are more inclined than their peers in other industries to pursue geographic expansion, with 26 per cent aiming to enter new markets in a bid to increase competitiveness.
Despite these ambitious targets, midsize industrial manufacturers face several roadblocks on their path to growth, the research paper noted. Companies struggle with three main challenges: keeping up with innovation, finding skilled workers and dealing with economic pressures.
Tech up or get left behind
In today’s rapidly evolving manufacturing landscape, midsize manufacturers who embrace digital solutions are positioning themselves at the forefront of innovation, efficiency and resilience.
- Cloud solutions: Oxford Economics cited cloud-based technologies as a means of improving employee experiences, increasing agility, reducing costs and enhancing innovation capabilities. These benefits can help manufacturers scale processes and systems to match business growth and adjust to real-time information or shifting priorities.
- Enterprise resources planning (ERP) systems: Midsize manufacturers have been noted to be ahead of their peers in leveraging ERP solutions, along with advanced logistics, supply chain and procurement software. These integrated systems provide the end-to-end visibility crucial for sustainable scaling with less complexity and provide end-to-end visibility, which are essential for growth.
- Data integration and artificial intelligence: Data integration and AI are emerging as crucial differentiators in various industries. However, industrial manufacturers are lagging behind others when it comes to AI adoption, with only 18 per cent using AI in their operations.
The Oxford Economics research paints a clear picture for midsize manufacturers. Cloud solutions, ERP systems, and AI integration are powerful tools, but implementing them requires substantial investment, not just in technology but in skills and organisational change.
By investing in digital technologies and adopting a forward-thinking approach, midsize manufacturers can overcome the challenges of innovation, talent acquisition, and economic pressures while reaching their ambitious growth targets.
To further explore how AI and smart ERP systems are reshaping the manufacturing landscape, SAP, in partnership with Australian Manufacturing, will host a webinar titled “Unleashing the Power of Smart ERP: How AI is Redefining Manufacturing in Australia.”
The session will explore how AI and ERP technologies are helping manufacturers drive growth and stay competitive. Register now to secure your spot.
