Kiwi manufacturing ‘on the boil’

Published on the 22/06/2017 | Written by Newsdesk

Manufacturing_on the boil_Abel

Perspectives from specialist trans-Tasman ERP vendor…

Despite the realities of being far from anywhere, which makes the export of manufactured goods that much more expensive and difficult, and despite a minimum wage which makes it expensive to hire people in labour intensive environments, manufacturing in New Zealand continues to be on the boil. That’s confirmed not only by government stats, but also by those on the frontline, including ERP vendor Abel Software.

“The manufacturing sector is doing very well and I think with the clients that we have taken on, we are helping to create real advantage in process automation and capturing inputs throughout manufacturing processes,” said David Mills, MD of Abel Solutions.

Abel is an interesting organisation for several reasons. Founded in 1996 by Allan Baird and Jane Mattsen, it specialises in the provision of manufacturing, distribution and services-specific ERP solutions. Abel is locally developed, privately owned and has been licensed on a subscription model for 21 years (long before software as a service was a thing). There are two distinct companies: Abel Software, which develops Abel ERP, and Abel Solutions which implements it.

Mills said that while Abel’s sweet spot is companies turning over anywhere from $20 to $80 million per annum, it also has considerable success with startups, which, he added, tend to be very well funded. Why is that? “The main reason is that if you are a manufacturing startup, you need a factory, machinery and perhaps purpose-built environments like clean rooms to meet compliance standards. These are not guys in a back yard shed, there is decent capital behind these start-ups.  And they need serious ERP from the outset.”

That start-up activity, from Abel’s vantage point, is in industries like honey, vitamin supplements and also on the back of more traditional Kiwi primary activities like dairy and fruit.

Be the capital situation as it may, Mills pointed out that for any startup, cashflow is king, and so its subscription model provides access to proven ERP software without putting a noose over funds required for marketing, product and business development. “We think our model helps these organisations to be streamlined in terms of costs.”

Mills noted that for local manufacturers to succeed despite the odds, efficiency is a non-negotiable.  That means eliminating jobs that don’t add value. “While there is a social effect from automation removing roles, this allows businesses to move faster, to react and perform in a global market and re-allocate resources to other areas of the business. But if you think about it, automating mundane tasks enables resources to add value elsewhere in the business.”

Not only that, but being competitive and enabled through technology also means manufacturers stay in business, retain higher-end jobs, contribute to the economy and keep companies like Abel Software and many others hard at work.

Providing an example where automation alleviates any individual from performing mundane task, Mills explained Abel’s ability to provide detailed track and trace of ingredients from the farm gate through to the retail shop shelf, a function of specific importance to food manufacturers. “Visibility is essential. That means collecting and assimilating information from global supply chains. When you need to report to, for example, the Ministry of Primary Industries, that can come at a big cost if it isn’t automated. By using clever software solutions, manufacturers can re-deploy resource from the office to the factory.

While a ‘channel partner’ approach might enable ‘scale at pace’, Abel eschews that, preferring to sell and implement through Abel Solutions. Jane Mattsen, business and channels manager, said all of this is ‘the Abel way’. “We’ve always had a view that we enable our customers to do what they do best. Part of that is understanding their businesses and part of that is making available software without punitive costs, that’s why we’ve been subscription since forever. And, while going channel does have some advantages, it also adds cost to the end user,” she explained.

Abel’s subscription model works well, evidenced by a user base nearing 10,000 users across 13 countries, many of which have been using Abel for over 15 years.

And with the consolidation that has swept through the ERP vendor environment, Abel is determined to stick to its ‘way’. “Of course, we have been targeted for acquisition, but our answer has always been a firm ‘no’.   We are enjoying consistently strong growth, we are passionate about what we do, and we like forming value-added long-term relationships with all of our clients,” Mattsen concluded.

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