Small and medium enterprises (SMEs) are widely believed to be the backbone of the world’s economy. In truth, recent research shows that in nearly every industry, including manufacturing, the size of a business doesn’t predict its job creation capabilities as much as its age does. Early stage startups create jobs simply as a function of being startups, but many jobs are lost to small company failures. However, what small companies absolutely excel at is innovation.
Industry journals regularly publish articles about large major manufacturers overcoming cumbersome internal business processes to bring an innovative new product to market quickly and at a fraction of its usual budget. Most small manufacturers don’t find either the budgets or the time frames particularly stunning, since overcoming obstacles on a shoestring is a core competency for most SMEs. SMEs excel at finding new products and new ways of accomplishing tasks by combining information and ideas from multiple sources and coming up with a completely new category or approach.
Governments of some countries have long understood the innovation capability of the SME. Germany, most notably, has a strong support infrastructure for manufacturing innovation. The infrastructure consists of a strong network of universities, government funded agencies and small businesses. The strong support network enables SMEs in Germany to compete globally based on their innovation, if not their productivity.
Learning from countries that support manufacturing innovation, the U.S. has been working toward creating similar programs to support and encourage the rebirth in manufacturing. Over the last few years, the U.S. Department of Commerce and the Department of Defense have funded several centers for sharing and disseminating the latest technologies and methodologies for manufacturing. There are currently three such institutes in various locations, and plans call for 45 in total.
With the renewed recognition that manufacturing innovation is the engine that drives the economy there will be an increased emphasis on the tools and techniques that support manufacturing. Over the next several years, we predict there will be an increase in the number of people seeking APICS certifications and lean six sigma black belts. Along with this manufacturing renaissance will come a surge in the demand for manufacturing focused ERP systems, the information backbone of a manufacturing company.
While ERP systems are in use in many other industries, ERP was born in manufacturing and manufacturing continues to be the primary industry that ERP software companies focus on. Because of its strong dependence on manufacturing to keep it healthy, the future of ERP does rely on a continuous stream of startup companies and manufacturing industry growth to keep it healthy. Innovation is key to successful manufacturing and a strong ERP ecosystem. The future of ERP rests in the hands of SMEs.
