Your ERP is not Broken – But It’s Holding You Back

The manufacturing industry in Australia and New Zealand is at a pivotal moment. 

In mid-2024, Australian manufacturing entered into a recession after three years of growth. The industry is battling adverse global trading conditions, soaring costs (especially energy costs), and massive skills shortage. Productivity has fallen below pre-pandemic levels, making it difficult to compete at a global level.  

In New Zealand, manufacturing has been see-sawing; declining after growing in the first half of 2025. Conditions are tough, with weak demand, high costs, and economic uncertainties undermining business confidence. 

However, growth’s possible for those who are able to manage costs and complexity while continuing to invest in automation, digital transformation, and innovation. (Top Australian mid-market manufacturers have proved this by achieving six times the average sales growth.)

The future (and present) of manufacturing is modern technology, especially AI-driven operations. (According to 68% of manufacturing leaders, AI is the foundation for future competitiveness.  ERP (Enterprise Resource Planning) systems have a crucial role in this transformation - making it easier to automate processes, reduce inefficiencies, and provide real-time data to make faster, smarter decisions. 

Unfortunately, legacy Tier 1 ERP systems - implemented years ago and patched together to remain functional - are unable to keep up with modern manufacturing. Outdated technology stacks make older systems less adaptable. They struggle to handle higher data volumes, and become expensive to maintain. So, they become a bottleneck instead of a reliable backbone. 

You’re working around your system, not with it

Customising or upgrading a Tier 1 ERP isn’t easy. Even small changes in workflows or processes can take months and cost tens of thousands to implement.

Meanwhile, 

• Operations leaders are forced into spreadsheet hell as they resort to manual tracking to keep the line moving.
• Finance teams spend days (or weeks) piecing together P&Ls and inventory reports across multiple plants and markets because the ERP can’t dynamically consolidate real-time data.
• IT is slogging through patchwork integrations that consume 60-80% of their budget and leave you in technical debt while also slowing innovation. 

The outcome is a slow, reactive operation where delays, errors, and duplicated effort pile up. Decisions take longer because you don’t have access to timely, accurate data. Deadlines slip as your teams devise work-arounds to plug system gaps. And, your Cost to Serve rises. 

Meanwhile, the resources that should be driving digital transformation are wasted in fixing problems the ERP was supposed to solve. 

Scaling up exposes the cracks

As you grow - increasing volumes, adding product lines, introducing smart machinery, or opening new sites - the shortcomings of legacy Tier 1 ERP systems become more visible. 

• When orders climb from hundreds to thousands, your system crawls, batch processing lags, and delays cascade through operations.
• As you tweak processes and workflows, your ERP requires expensive (and long drawn-out) customisation.
• You’re unable to share inventory data or transfer stock efficiently between multiple plant locations.
• You invest in IoT-enabled production lines, but your ERP can't process the real-time data, forcing you back to manual entry.
• Your ERP creates compliance silos instead of unified oversight as you enter new markets and geographies.

It takes a high toll, both financially and technically. Changes can take months, require external consultants, and introduce risk every time something is updated. Your teams may start to rely on workarounds, bypass essential workflows, or skip system upgrades. 

Over time, this introduces fragility. Operational risk increases. Stock data becomes unreliable. QA steps get missed. And instead of enabling growth, the ERP becomes a constraint.

When ERP friction kills momentum

You’re paying for capability you don’t use - and missing key features

Tier 1 ERP platforms often come loaded with generic capabilities like global finance and banking interfaces. But most manufacturers don’t need that. Meanwhile, the functionality you actually need - supply chain management, real-time shop floor tracking, complex BOMs, embedded quality workflows, and MES integration - is either missing or bolted on as an afterthought. You end up paying premium prices for features you don't use, while the capabilities that drive manufacturing excellence cost extra. 

This leaves you over-invested and under-supported. You’re tied to a costly, inflexible system that can’t adapt to your operational reality. And because these platforms come with long renewal cycles and complex contracts, you're often locked in, even when it's clear the system isn’t delivering what your business needs. 

The real cost of stagnation

Australian manufacturers are serious about staying innovative.  You’ve reinvested 4.1% of value added into R&D, the highest of any industry. You also contribute 8% of the nation’s total capital investment. New Zealand manufacturers are on the same path, pouring NZ$780 million into digital transformation.

But the return on these investments will fall short as long as manufacturers remain tied to outdated Tier 1 ERP systems.

Innovation needs agility - the ability to test new ideas, respond to market shifts, and scale what works. Legacy ERP platforms slow you down. They impose rigid, pre-set processes that make it hard to adapt, experiment, or respond quickly to changing conditions.

These systems also create roadblocks to adopting future-ready technologies like AI/ML and IoT. Without native and easy integration, you end up with slower innovation cycles, lower competitiveness, and growing frustration on the shop floor, especially from teams eager to do more but held back by the limitations of outdated tech.

If your ERP is lacking  agility, increasing costs, failing to scale, or hindering innovation, redefine what “fit for purpose” means in 2025 and beyond:

• Embedded AI and automation-ready workflows
• Real-time landed-cost visibility and shop-floor integration
• Financial, inventory, and operations data unified in real time
• Cloud-native architecture that evolves with your ambitions
  

Epicor Kinetic is purpose-built for modern manufacturers - smart, adaptable, and engineered to keep pace with complexity. 

Discover how to make achieving manufacturing excellence easier with Epicor.