With the right technology, manufacturers can strengthen their foundation, reduce hidden costs, and position themselves for long-term success.
Small and medium-sized manufacturing enterprises (SMEs) are the backbone of the global economy. In Canada alone, SMEs make up approximately 98% of all businesses and employ 88% of the workforce, according to organizations like StatsCan and BDC. It’s been accepted that these companies are the backbone of our economy and provide innovation and job creation. However, to remain competitive, it is vital to harness the power of technology to streamline and optimize their operations. In this article, we’ll talk about how companies can optimize their processes in distribution and manufacturing using technology and what factors they should keep in mind.
The Changing Landscape of Technology for Small & Mid-Sized Manufacturers
Thirty years ago, computer technology was a luxury few SMEs could afford. The internet was just beginning to gain traction, and many small businesses had no access to the tools that are now commonplace in today’s digital world. Fast forward to today, and technology has become more accessible. The smartphones many of us carry are more powerful than the computers businesses used just two decades ago. As a result, SMEs now have access to resources and data that were once out of reach.
Over the last decade, technology has become more affordable and accessible. Regional and international trade agreements have also made it easier for SMEs to tap into global markets, purchase goods, and expand their reach beyond local borders. Yet, with rapid changes in market demand, fluctuating material costs, and shifting regulations, the pressure on SMEs to optimize their operations and adapt to change is higher than ever.
How Technology Enhances Efficiency
For SMEs in production and distribution environments, technology can significantly enhance the efficiency of operations. It enables businesses to:
Automate routine tasks:
Tasks such as data entry, financial record-keeping, and inventory management can be automated, saving valuable time and reducing errors.
Improve decision-making:
With better data collection and analysis, SMEs can make informed decisions that help optimize production schedules, inventory levels, and resource allocation.
Enhance communication:
Technology improves internal communication among teams and external communication with vendors, suppliers, and customers, ensuring everyone is on the same page.
For example, one company we worked with at Kwixand Solutions implemented an initiative aimed at improving process efficiency across their operations. By encouraging employees to use technology to streamline their daily tasks, the company saved 1,000 hours over six months. This time savings translated into the equivalent of one additional employee without the added cost.
How Can You Start Optimizing Your Production & Distribution Processes?
Here are some factors to take into account when attempting to increase efficiency in your distribution and manufacturing processes
⚙️ Transition Away from a Patchwork of Solutions
Many small and mid-sized manufacturers today are still working with a patchwork of different software applications, spreadsheets, and manual processes. While these solutions might seem effective in the short term, they can lead to inefficiencies and siloed operations, which hinder growth. The result? Increased labour hours, higher costs, and greater risk if key employees leave with critical knowledge without having it documented somewhere.
To scale effectively, SMEs must transition from fragmented solutions to integrated systems. By adopting an Enterprise Resource Planning (ERP) system that connects all business processes—finance, inventory, sales, purchasing, and production—SMEs can gain real-time insights into their operations and improve decision-making.
⚙️ Build Resilience to Remain Competitive
For small and mid-sized manufacturers to remain competitive, they need to be economically scalable and resilient. Ask yourself, how quickly could you recover from a downturn in your market? You need to be able to grow and contract according to market needs. As market conditions change or new opportunities arise, having the right technology in place allows businesses to quickly adjust. Whether it’s adjusting workforce levels, optimizing machine capacity, or managing fluctuating inventory needs, technology enables SMEs to make proactive, data-driven decisions.
For companies in manufacturing and distribution, as demand for certain products rises, you must scale production, which often involves increasing raw material purchases and managing larger inventory. This can lead to more complex supply chains and higher financial investments. By leveraging technology, companies can optimize their purchasing strategies, reduce waste, and better manage cash flow.
⚙️ Utilize Technology as a Gateway to Global Markets
In today’s interconnected world, SMEs are no longer limited to local markets. Technology enables businesses to tap into regional, national, and even international markets without the need for physical presence. Communication tools such as email, messaging platforms, and video conferencing help SMEs interact with customers, suppliers, and partners across the globe.
However, expanding internationally also presents challenges, including higher costs of freight, stricter regulations, and a lack of familiarity with foreign markets. The right technology solution helps SMEs navigate these challenges by providing tools to manage logistics, track shipments, and ensure compliance with international regulations.
⚙️ Centralize Your Data & Transactions to Improve Communication
Nowadays, efficient communication and information sharing is vital for companies with their customers and vendors. Customers want faster confirmations for delivery, you need the same from your vendors in turn. Not to mention, you need access to regulatory information and quality traceability. Using an organized central library of records stored in one central solution so that it can be accessed when needed to provide information for regulatory documents, for requests for quality control documents, for traceability, material tests and lot numbers, and transaction tracing, is imperative.
By implementing a centralized ERP, you’ll also be able to automate process recording that creates and stores records and allows you to monitor and analyze key information. For example, you’ll be able to monitor production input, order tracking, fulfillment rates, and more, by pulling up a dashboard. This will allow you to gain time and reduce the hidden costs of data management.
⚙️ Don't Neglect Data Security and Cybersecurity
As SMEs adopt more digital solutions, data security becomes increasingly important. With multiple software tools and applications being used, businesses must ensure they have robust cybersecurity measures in place to protect sensitive information. This is especially crucial given the growing number of regulations around data protection. This is where having a centralized ERP system is so important againas it also ensures that sensitive data is securely stored and easily accessible when needed. A dashboard view of your operations can help identify issues before they escalate, ensuring businesses can maintain a high level of efficiency while safeguarding their data.
Takeaways: Key Considerations
Small and mid-sized manufacturers face immense pressure to optimize their production and distribution processes to remain competitive. By embracing technology, businesses can not only improve efficiency but also build resilience and scale operations more effectively. Whether it’s automating processes, improving communication, or expanding into new markets, the right technology solutions can help SMEs navigate the complexities of today’s business environment.
The first step in this transformation is integrating an ERP system that centralizes data and provides actionable insights. With the right technology, manufacturers can strengthen their foundation, reduce hidden costs, and position themselves for long-term success.
It’s important to view technology as an investment, not just a cost. Just as businesses maintain machinery and equipment to ensure optimal performance, investing in modern technology ensures that your business remains efficient, scalable, and resilient in an ever-changing market.
So, ask yourself: Is your technology aligned with your growth goals? Are you ready to take the next step in your digital transformation journey? The time to invest in technology is now—because when your technology works for you, your business can work smarter, not harder.
Get Started with Digital Transformation with Kwixand Solutions
Digital transformation doesn’t happen overnight. It requires a thoughtful, strategic approach. For small and mid-sized manufacturers, partnering with the right technology solution provider is key. A trusted partner will understand the unique needs of your business, help implement the right technology, and provide ongoing support to ensure your system evolves as your business grows.
Here at Kwixand Solutions, we help businesses across Canada and the US digitally transform, setting you up for long-term success. As Dynamics 365 Partners, we bring over 50+ years of combined experience and our team of experts design creative solutions and strategies for your unique business needs.
About the Author: Peter Paquette, Supply Chain Solutions Engineer at Kwixand Solutions, is a Certified Supply Chain Professional (CSCP) with over 30 years of expertise in operations, production, and material planning. He is also certified in Planning and Inventory Management (CPIM) and as a Dynamics 365 Business Central Functional Consultant.