A recent study published by the US Chamber of Commerce noted that small businesses that utilize technology platforms outperform their competitors and are more optimistic about their future. Small businesses that use technology directly employ or support almost a billion jobs.
Technology Use Is Linked to Growth and Optimism
By leveraging technology, small businesses substantially influence America’s economic growth. These technologies include platforms for digital advertising, business software such as ERP, and other apps. Ninety-three percent of small business owners use technology, and 94% report that technology helps them run their business more efficiently. Eighty-seven percent of companies believe technology has helped them grow in challenging situations.
Another benefit of technology is that 9 out of 10 small business owners enjoy their businesses more and gain time to spend with their families. They also have a more optimistic outlook for the future. Eighty-three percent of the companies that use technology plan to increase it across the business in the next few years.
Deloitte’s analysis in Connected Small Businesses in the United States found that digitally advanced small businesses realized significant benefits compared to companies with low levels of technology engagement. They:
- Earned two times as much revenue per employee
- Experienced revenue growth over the previous year that was nearly four times as high
- Were almost three times as likely to be creating jobs over the previous year
- Had an average employment growth rate that was more than six times as high
- Were also three times as likely to have exported over the previous year
Technology Reduces Supply Chain Disruptions for Small Manufacturers
Technology plays a significant role in helping small manufacturing businesses have supply chain resilience. They achieve greater visibility with technology that allows them to see the entire business operations. It lets them better collaborate with vendors to work more closely together. It is also easier to manage a complex supplier network to have more resources to draw upon. Suppliers can connect directly to a business with a vendor portal that lets them access purchase orders and be responsive in real-time. Technology in manufacturing can help companies stay on top of vendor performance to ensure they meet their expectations.
Cost-Efficiency and Resource Optimization
Small manufacturing businesses often have limited resources, making cost-efficiency a critical factor for success. Technology allows these businesses to do more with less.
Cloud computing, for example, provides access to powerful computing resources without significant capital investments in physical hardware. This scalability ensures that small manufacturers only pay for the resources they use, thereby optimizing their spending. With cloud solutions, small manufacturers can compete with larger enterprises in data storage, processing, and online presence without breaking the bank.
Additionally, automation and artificial intelligence (AI) have become indispensable tools for small manufacturers, allowing them to streamline operations and reduce labor costs. Automating repetitive tasks like order processing, customer support, and inventory management frees employees to focus on more strategic and value-added activities.
Small manufacturers have recognized the value of data and are using it to make informed decisions. They gain insights into customer behavior, market trends, and operational efficiency by harnessing data analytics and business intelligence tools.
Small manufacturers can collect and analyze data in real-time, allowing them to respond to changing conditions rapidly. This real-time analysis enables small manufacturers to stay competitive and make data-driven decisions without the bureaucratic delays larger corporations face.
Operational efficiency is a key driver of success for any business, and technology for manufacturing plays a pivotal role in optimizing processes. Small businesses can leverage software solutions for inventory management, project tracking, supply chain management, and more.
This streamlined approach to operations reduces the margin for error, cuts costs, and enhances productivity. For example, a small manufacturing company can use enterprise resource planning (ERP) software to coordinate production, manage inventory, and track orders, improving efficiency and reducing waste.
Access to Global Markets
Technology has transformed the world into a global marketplace. Small manufacturers can now easily tap into international markets without the massive investments in physical infrastructure that were once required. E-commerce platforms, online marketplaces, and digital payment gateways allow small manufacturers to reach customers across borders. This level of global access was traditionally the domain of large corporations with vast distribution networks.
Flexibility in Remote Work
The COVID-19 pandemic accelerated the adoption of remote work across industries. With the right technology, small businesses, including manufacturers, have adapted quickly to this new work environment. Small companies can pivot relatively soon, unlike large corporations, which may struggle to implement remote work infrastructure due to their size and complex organizational structures.
By embracing remote work technologies such as video conferencing, collaboration software, and cloud-based project management tools, small businesses have maintained business continuity while ensuring the safety and well-being of their employees. This flexibility in the face of unexpected challenges has positioned small businesses as adaptable and resilient players in the modern business landscape.
Determining Your Manufacturing Technology Needs
So, how do you know what you need regarding advanced technology in manufacturing?
Examine your pain points and determine what technology can help you improve business performance to address those challenges. Look at the technologies you have in place and how effective they are in managing your business issues. Ask users what pain points they are experiencing. Consider what technology could address these issues. What do you want to accomplish in the future, and will your existing technology help achieve it?
Many small manufacturers don’t have someone specifically responsible for information technology in manufacturing. Hiring someone skilled in new technology in manufacturing can help you determine what your needs are and help you maintain anything you incorporate. You may also have an existing employee(s) who could use resources to become technology adept.
What’s Your Technology Budget?
When assessing technology in the manufacturing industry, your budget is a pivotal factor to remember. The use of technology in manufacturing can be a valuable resource for small businesses, enhancing efficiency, communication, and sales. Nonetheless, it’s crucial to acknowledge that technology is a tool, and its efficacy hinges on its proper utilization.
The manufacturing industry is evolving, and the use of technology in manufacturing is the driving force behind this transformation. Small and medium-sized businesses that embrace technology are reaping the rewards of increased efficiency, cost savings, and a brighter outlook for the future. In this ever-evolving landscape, technology is not just a tool; it’s the key to success for manufacturing SMBs.