May 31, 2024 Optimizing Production: Strategic Smart Manufacturing

How manufacturer, Nexen, is addressing current ERP challenges with major software providers like SAP, and modern strategies to mitigate.

As the manufacturing industry becomes increasingly competitive, the pressure to adopt efficient, smart factories is on. In fact, a recent Deloitte study reported that 86% of surveyed manufacturing executives cite smart factory solutions as the primary drivers of competitiveness in the next five years. These connected facilities promise productivity and innovation, and their ultimate success hinges on data found in mission-critical Enterprise Resource Planning (ERP) systems. However, the pressures of ERP reimplementations, which often entail abandoning years of customizations, put manufacturers in a major predicament.

Enterprise software vendors such as SAP are pushing manufacturers toward cloud-based systems, like S/4HANA Cloud. While cloud offerings are beneficial for ERP vendors and promise manufacturers the ‘innovation’ they need, they can also be disruptive and costly. Replacing customized ERP systems can jeopardize operational efficiency and obstruct established workflows.

The road to smart factories that provide real value isn’t a one-size-fits-all approach. Leading manufacturers seek flexibility, control, and cost-effectiveness, which in turn means realizing the full value of resources invested in ERP. Instead of succumbing to vendor pressure, smart manufacturers are seeking new strategies.

A strategic shift is needed, prioritizing alternatives like third-party support for existing systems. This allows for continued value extraction from existing ERP while freeing resources for cutting-edge technologies (AI, IoT) that can drive smart factory success.

Nexen Corp., a global manufacturer, exemplifies this approach. In order to maximize its processes, Nexen wanted to continue building on its mission of creating sustainable initiatives and turned to Rimini Street to free up resources and time to invest in technologies, including AI/ML, as opposed to being locked into forced S/4HANA upgrades.

Nexen leverages a well-established, on-premises IT infrastructure, prioritizing the granular control it affords over its data, applications, and underlying systems. However, the enterprise’s current SAP system presented operational hurdles. The system’s inflexibility in accommodating their customizations and slow software support times emerged as significant bottlenecks, impeding Nexen’s ability to fully capitalize on the potential of Industry 4.0 technologies.

Since implementing modern third-party support and services, Nexen has cited significant benefits, including extended support for SAP Business Suite, guaranteed support for customizations, reduced annual maintenance fees, 24/7 access to highly skilled support, including engineers with over 10 years of experience in support, and faster IT issue resolution.

The path to smart factories is unique for each manufacturer. A “rip and replace” mentality ignores individual needs and infrastructure.

Manufacturers like Nexen navigate the innovation landscape by critically evaluating upgrade needs and seeking alternative support models. This strategic approach ensures their ERP systems remain aligned with broader innovation, adaptability, and differentiation goals – safeguarding their finances and operations for a connected future.

About Emmanuelle:
Emmanuelle Hose has over 25 years of proven experience in the IT industry, leading enterprise software sales, service, and development operations across 3 continents: Europe, North America, and Oceania. After serving in several executive roles with global software companies, Ms. Hose was recently leading Rimini Street business operations across Australia and New Zealand, delivering exceptional service to our clients, accelerating sales growth, and extending the leadership position of Rimini Street in the software support market across the region.

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