What are the major factors that prevent entrepreneurs from updating their production management tools?
Production management tools range from the next-to-nothing approach, such as "in the owner’s head" and spreadsheets, to off-the-shelf software solutions and custom-developed applications. Every industry sector and company seems to have a different approach.
Entrepreneurs fail to update their production management tools for the same reasons they fail to adopt other technologies. Unfortunately there is no one reason for this, but there are both internal and external factors.
Externally the largest factor is probably competitive pressure. If competitors are adopting new technology, you probably will as well. Other external factors include currency fluctuations and pressures from customers and key suppliers.
Internally, companies adopt new production tools when they encounter increased growth, when they are aggressively pursuing cost reductions or improved efficiencies, or when they are trying to reduce customer service problems.
But even if internal or external factors are pushing a company to upgrade its tools, there may still be roadblocks.
One, change is hard in any organization, and there are a lot of stories floating around of technology change disasters. Companies are reluctant to risk changing a system or process that has made them successful, even if that next step will help them continue their success. The perceived benefit of the change must outweigh the perceived risk – and this will be different in every company.
Two, changing or upgrading production requires different skill sets within the organizations. Many companies struggle with acquiring these new skills, as it often means retraining or replacing existing staff.
Three, there may be an inability or unwillingness to finance the change, or a lack of clear understanding of the return on investment.
The external issues facing many Canadian manufacturers suggest that there should be a strong market for tools that will help them grow and become more cost-effective and efficient.