Even small businesses can participate in the digitization process.
by Sjors Hooijen on Mar 22, 2023 10:54:51 AM
Tech2B facilitates digital communication outside of ERP software as an SCSN service provider.
Communication within various value chains is increasingly becoming digital. But what if you are a smaller supplier, dependent on the work passed on by the big players, and you do not yet use an ERP system, let alone have your own IT department.
A significant group of manufacturing companies still do not use an ERP system. In Flanders, this percentage is 43% of companies with 10-49 employees. In the Netherlands, it fluctuates around 38%. The Benchmark Machining shows that in this sector, about 48% of companies manage planning from within the ERP package. So, more than half do not use it at all.
“Thinking about digital communication means working on positioning within the connected value chain of the future.”
Rob de Beule
Director of the SCSN foundation
E-mail is still free
When Tech2B, the online B2B platform for the manufacturing industry, brought up the possibility of exchanging order information through ERP software in a conversation with manufacturing companies, the general reaction was, "email is free, so why pay to exchange information?" "They are practical and less concerned with how they can maintain their position in the long term, say 5 to 10 years," says Sjors Hooijen, CEO and co-founder of Tech2B.
In the Brainport region, the birthplace of the platform for the manufacturing industry, many manufacturing companies lack a sense of urgency that digitalization is necessary to maintain and strengthen their market position. Such standardized information exchange can optimize not only order processing but also productivity, for example, when material suppliers in the future digitally send information about material batches that can be read by machines. Instead of making a test piece first, the machine can produce first-time-right. Other factors come into play as well. The European Union aims to introduce a Product Passport in 2025, in which the origin of materials in an entire value chain is recorded, among other things. "You can't achieve this if the chain is not connected in a standardized way," says Hooijen. Metadata will, therefore, play a role. "And 2025 is not far away."
SCSN has about 300 companies that use the services of one of the service providers.
By 2023, this should grow significantly. "We want to have at least 600 connected companies," says Rob de Beule. "But our ambition is 1200 by the end of the year." He believes this is not unrealistic, as there are often four to five other companies behind each company that joins. Exponential growth is therefore not impossible. So far, the users mainly come from the Benelux. However, from Europe, where similar initiatives are underway, such as Gaia X, there is interest in what SCSN is doing.
Save one hour of time per day
To offer companies that do not work or work with an outdated ERP system a solution to participate in this digitization battle, Tech2B has become a service provider at SCSN. The SCSN Foundation, which originated from one of the Smart Industry Fieldlabs, is working on the rollout of the data standard with which companies can easily exchange digital information, even if they work with different ERP packages. Rob de Beule, director of the SCSN foundation, describes SCSN as a 'cloud' that floats above the hubs of the providers and ensures that the right data goes to the right parties in a universally readable way. “Just like a mobile phone. You do not need to know which network the person you are calling is on, you will be connected automatically. In this way we bridge the gap between ERP and the SME manufacturing company.” Service providers are, for example, suppliers of ERP software, who make their software compatible with the SCSN standard. Tech2B has joined this list of providers.
Sjors Hooijen: “You can upgrade the subscription at Tech2B with the SCSN connector. If you use this connector, the digital information exchange with outsourcers can start without needing ERP software.” Depending on the number of transactions per month, you pay a certain amount. The companies that choose this option will be listed in the SCSN Address Book. In it, users can see exactly with each party they are communicating digitally. Parties that are connected can then communicate one-to-one or create their own network. Currently, requests for quotations can be sent in this way. Outsourcers who do this via Tech2B use the platform's eSourcing environment for this.
The manufacturing companies without ERP receive the information in their Android or iOS app from Tech2B and can respond therein. Rob de Beule: “Many of these entrepreneurs are at the machine during the day. There they can possibly respond to requests and handle matters with their smartphone. An app like this unburdens them.” This simply saves them time; time that they now often spend in the evenings going through their e-mail box and answering the e-mails. “If we can save them even one hour a day…”
Secure long-term position
With this tool, they can go along with digitization without having to invest directly in an ERP system, including the time required for an implementation process. Sjors Hooijen thinks he has to convince the entrepreneurs with the time savings they can achieve. And fewer chances of error. In the long term, however, it will mainly be a matter of getting orders or not. In the future, buyers will probably place more orders with suppliers who have been digitized because this takes them less time. “Some buyers are already imposing that.”
Rob de Beule notices this by the number of questions he receives whether a certain software for the manufacturing industry is 'SCSN ready'. He thinks that there is still a lot of profit to be made, especially in smaller companies with less than 25 employees. They usually do not have an IT department and knowledge is often lacking. With these kinds of hands-on solutions, these companies can be supported and the entire chain will eventually gain efficiency. “It's nice if you can look through the entire chain.” This is absolutely necessary for future developments such as the Product Passport, but also CO2 registration per product.
Subscribing to larger tenders
Tech2B launched the SCSN connector a few months ago. The team wants to accelerate this in 2023. With the new Assets module, Tech2B goes one step further by making the capacity visible, so that entrepreneurs can share it with other entrepreneurs. Sjors Hooijen: “At present, smaller companies often cannot respond to a large tender because they lack capacity. If they start sharing it, they can respond to those tenders.” This gives the smaller suppliers, important for maintaining the sector's clout, a means to participate in digitization without having to make substantial investments themselves.
Few companies generate revenue from electronic data exchange
In general, the turnover that companies make via electronic data exchange (EDI) is higher as the size of the company increases. 3% of companies with 10-20 employees generate turnover from EDI, 12% of companies with 50 to 100 employees and 17% of companies with 100 to 250 employees. Of the latter group, 6% derive more than half of their turnover from EDI. For 53% of these companies, this remains at a maximum of 10%, according to figures from Statistics Netherlands. If 10 to 20 employees work, the percentages are 1% and 10% respectively.
Rob de Beule - Director of the SCSN foundation | Sjors Hooijen - CEO Tech2B
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