Are you in the manufacturing niche? Are you wondering how you can survive it even when the economy takes a bad turn? Well, here are the best tips to help you survive manufacturing without any hassles.
1. Maintain Your Focus
Decide on the type of company you want to run and stick on that lane. With new infusions of capital, a lot of manufacturers move into new niches without a proper plan in place. As such, in 2008 and 2009 when the economic crisis hit, they had the worst hits.
On the other hand, the smart ones maintained their focus by using investment money and loans to develop their businesses. They remained strong in the downturn of the economy because of this move.
2. Reinvent Your Products Regularly
As a supplier, you will fare well in the manufacturing industry because of differentiating your products. The success can be attributed to your mindset and the money you use to invest in new technology. Simply put, thinking out of the box and adding a little creativity will work wonders for you. For instance, who would have imagined that the technology used in the rearview mirror could ever surpass the workings of a car’s headlamps?
3. Enhanced Product And Process Design
You should rely on enhanced product and process design to maximize your productivity and improve the overall speed of manufacturing. With lean manufacturing functions, you can focus on product and the associated costs of it from the conception of a component. Make sure that your manufacturing and product design teams work closely and communicate effectively from the start.
If the component is production-friendly it will reduce labor costs and the overall production time. Use crowdsourcing to get design ideas and reduce production time by applying manufacturing techniques. Once the economy improves, there will be a lot of pressure to boost production without increasing labor costs. Using lean manufacturing methods is the best way to solve these issues. Spending less on machinery can leave you with more profit, take a look at Surplus Network for used manufacturing equipment.
4. Pay Enough Attention To The Supply Chain
You should know any risks associated with your suppliers, especially financial risks. You don’t need any surprises, especially when a particular supplier disappears. It will be too daunting to replace a particular supplier in the shortest time possible. You should find out if your suppliers are focused on research and development or the quality instead of the price of the component alone. Do you factor in the global cost footprint as you source the parts? If you are not, you will end up paying more money in the end.
5. Offshoring vs Onshoring
You should be aware of the total costs of the products. If the parts are outsourced from low-cost countries, they are likely going to be of poor quality. It’s prudent for your employees to inspect every piece in the shipping container to identify those that need to be scrapped or repaired. Don’t forget to consider logistics when ascertaining the total cost of a product.
For instance, long distance shipping from Asia often affects your delivery time. That’s because you require maintaining the parts inventories instead of sequencing them into the production cycle immediately. To determine the total cost of ownership, you should check out the tool available on The Reshore Initiative official website. The tool compares the manufacturing costs for parts in 17 countries with 29 factors in question.
6. Improving Overall Quality
Many manufacturers are still offering components with high defect rates. As such, you can gain a competitive advantage by whittling the issues down. There should be a detailed action plan to improve the quality of components being produced. Start by improving the first time through-rates to reduce reworking and scraps.
If something is done the right way the first-time round, you should be able to increase your overall productivity and reduce your costs. Identifying the root cause of the problem in the first round is more affordable than paying for repairs and defects.
7. Diversify Your Customer Base
You may be forced to segment your industry or going outside it to diversify your customer base. For instance, a few auto industry suppliers have been successful by entering new markets. For instance, a product can be applied in different types of vehicles or in aviation.
