Manufacturing companies around the globe are faced with many hurdles in their quest to be more profitable. To keep improved profitably in sight, business owners must make tough choices on issues such as automation, vendor relationships and software solutions.
As the manufacturing sector continues to grow in the U.S., many manufacturers are looking for ways to reduce expenses and ultimately increase profits.
Let’s look at three questions every manufacturing company should ask in their pursuit of enhanced profitability.
Have I Considered Automation vs Human Production?
The benefits of automated processes are simple. Automation gives manufacturers the ability to produce more products in a more efficient manner, resulting in lower production costs and increased profit margins. Automation decreases cycle times, improves quality and reliability, and reduces waste.
Automation allows manufacturers to obtain or improve a lean manufacturing environment, which is the ultimate goal for every manufacturing company. Automation also allows the ability to perform certain tasks with precision and a heightened level performance that human employees cannot deliver.
The question manufacturers need to ask when considering automation vs. human production is, Am I willing to replace my current workforce with automated production? This is one of toughest decisions manufacturers need to make.
Many decision makers balk at reducing their workforce, and rightfully so, yet automation is often one of the easier ways to increase the company’s profitability by reducing employee related costs.
When Did I Last Evaluate My Vendor Relationships?
Many manufacturers are willing to do business with any vendor that is willing to provide the cheapest product that meets demands. Despite this, some companies work with the same vendor for a number of years and have established strong relationships with that vendor.
Manufacturers need to continuously research new vendors in order to find ways to reduce cost and potentially find better service, even if that means discontinuing business with a vendor you have been working with for a number of years.
How do you find out if you are paying the market rate for your demands? This is a great question with a simple answer: send a bid request every couple of years to a few outside vendors to see what the current market demands for the service or product in question. It is important for an organization to continue to shop for the best service at the best price if there is flexibility to make vendor changes.
Have I Invested In Business Tracking Software?
Business tracking software comes in many forms such as production scheduling, managing and tracking your inventory; and allowing instant responses to client inquiries for superior customer service. Other software programs also have the capability to provide detailed cost analysis of your current processes as well as determine what other competitors may be charging for the same product in the same market.
You can read more in our article, Five Signs That Your Manufacturing Business Needs to Update Current Systems.
In order for any manufacturer to continue to be competitive, they must invest in the latest technological advances. These types of packages range from a few hundred to millions of dollars. Your company must determine the cost you are willing to pay today to increase profitability in the future.
If you are interested in finding out more about these type of software packages, contact our Technology Solutions Group for more information on how software solutions can make your organization a more profitable business.
Times Have Changed
As a result of technological advances and global markets, the manufacturing company that was once the only one within its industry within its market is now one of many. Many companies, especially in manufacturing, must constantly be willing to invest in their business and must be open to change.
Companies that are not willing to invest in their businesses and have trouble understanding the changing industry environment will have trouble remaining successful. These tough choices must be discussed within your organization with your organization’s success in mind.
Need Help?
Our manufacturing industry specialists are here to help you navigate tough business issues. Contact us online or call 800.899.4623.
