Get Lean in Manufacturing & Distribution with Dynamics NAV

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Though some manufacturing and distribution (M&D) companies have eagerly embraced technology with regards to barcoding and tracking of their inventory with their supply chain innovations, many remain stuck in the past when it comes to their corporate back office. Many of these organizations often have bloated, high-priced technology infrastructures that may have been state-of-the-art a decade ago, but require significant resources and spending on upkeep.  They also can fail to deliver the efficiency and flexibility these organizations need in order to optimize performance today.

When the economy is soaring, these costs and inefficiencies may not have posed a significant risk to corporate performance. But companies, especially midsize companies, can’t bank on high prices and a robust economy to sustain them anymore. In fact, many economists say that what we have encountered over the past seven or eight years is the “new norm.”  I cannot speak to that analysis,  but I have witnessed that most successful companies today control costs and operate under a lean back-office operation in order to provide services as efficiently as possible. The ability to deliver their product at the lowest possible price needs to be the ultimate goal for the manufacturing and distribution industry in order to protect itself from the volatility of the market and ensure long-term success.

The good news is: enterprise resource planning (ERP) software like Microsoft Dynamics NAV and various mobility solutions are available today to help streamline operations and create efficiencies. These solutions can optimize operations, improve cash management, and enable companies to record and access data efficiently–all of which can help executives make better and timelier decisions and in turn, more effectively plan and strategize for the future.

done at a fraction of the cost of some of the current large mainframe systems. In fact, there are a number of cost-effective solutions on the market that deliver the same functionality at only 10-15 percent of the cost of the “big iron” solutions. The most successful companies will recognize this tremendous opportunity and break away from the technology that is costing them money and productivity and anchoring them to the past.

Embrace the Tech Revolution

Like consumer technology, ERP and mobility solutions have evolved rapidly, offering the potential for greater efficiency in the field and the back office at a lower cost. But companies often stick with their bloated infrastructures because they are familiar and entrenched in the organization. That’s equivalent to insisting on using a first-generation car phone while the technology rapidly passes you by. A tech-savvy consumer would never do this, and an M&D company hoping to maintain profitability, no matter the state of the economy, wouldn’t either.

ERP and mobility solutions have improved and proliferated. From tracking manufacturing jobs and delivery tickets to managing invoices, the advanced, nimble and cost-effective ERP systems on the market today (like Microsoft Dynamics NAV) boost productivity, improve financial management practices and reduce back-office errors.

For example, we helped an industrial equipment manufacturing and rental company with implementation of an equipment management solution as part of its Microsoft Dynamics NAV system. This enabled it to double the size of its fleet without having to devote more resources to billing and record keeping. Further, the mobility solutions allowed for constant connectivity to the field. Operating in the cloud, engineers and managers in the field can more easily access data and send information to the home office to facilitate more efficient accounting and billing.

In another case, we worked with a distribution company to improve its invoicing processes by implementing a mobile solution. With the mobile solution in place, the company was able to significantly speed up its billing cycle, and its Days Sales Outstanding (DSO) dropped from 90 days to 45 days.  What is the impact of that solution on the bottom line? A three day reduction in in DSO improved cash flow by $5,000 for each $1 million in revenue. If you owned a $10 million revenue business, imagine what could do with $50,000 more in free cash flow.

Instead of an operation based on clipboards, paper and spreadsheets, cloud-based mobility can help companies streamline their operations and cut out the manual processes that sap efficiency.

Enhance Your Operation

Many of the information technology platforms in use today offer only historical data, which hinders long-term decision-making and planning. True leaders of the industry will not only have historical data available, but will be able to easily access the reliable, forecastable data and business intelligence analytics that are now part of the newer, more comprehensive ERP systems. This enables executives to learn more about their customers and business on a real-time basis, and look into the future to project jobs, orders, costs and revenues. This is not science fiction anymore, but science fact!

And thanks to all of the advances in Microsoft Dynamics NAV and mobility, this can be done with a smaller technology footprint. You should expect more from your technology, but your infrastructure need not be as big today as it was five years ago – let alone 15 years ago. Just as mobile phones have slimmed down, your technology infrastructure can be smaller, more nimble–and still more robust.

And while making the switch from a big mainframe technology infrastructure to one of the lean solutions on the market today can seem challenging, it doesn’t have to be. Once an organization recognizes the realities of the current marketplace, an affordable solution like Microsoft Dynamics NAV mobility solutions can be easily integrated, and the company can see results almost immediately.

An added bonus of making the change to this more agile, up-to-date technology is that the workforce of today and the future will demand it. In an environment with fewer qualified workers where companies have to compete aggressively to attract talent, you need the best tools and technology that enable highly valued employees to do their jobs as effectively and efficiently as possible.

A New Model and a Bright Future

The model of relying on good economic time to sustain profitability is increasingly unreliable for M&D companies. If you can’t bring the cost of manufacturing and service delivery down, you’re going to lose market share to your competition.  Don’t fall victim to the over-selling of “big iron.”

There are companies making investments in these modern, advanced – and affordable – ERP and mobility solutions, and they are getting leaner, more efficient and better equipped to remain profitable, no matter the economic conditions.

The longer others hold out and continue to pour money into their oversized technology infrastructures, the farther they will fall behind. Given the promise of significant cost savings and productivity gains, upstream companies should jump at the opportunity to shed their expensive technology, embrace the future with nimble ERP-like Microsoft Dynamics NAV and mobility solutions, and position themselves for long-term success.


This publication contains general information only and Sikich is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or any other professional advice or services. This publication is not a substitute for such professional advice or services, nor should you use it as a basis for any decision, action or omission that may affect you or your business. Before making any decision, taking any action or omitting an action that may affect you or your business, you should consult a qualified professional advisor. In addition, this publication may contain certain content generated by an artificial intelligence (AI) language model. You acknowledge that Sikich shall not be responsible for any loss sustained by you or any person who relies on this publication.


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