Whether it be a new business start-up or the review of an existing commercial operation,
there are a few fundamentals that can be assessed to ensure a manufacturing concern
operates to its fullest potential.
Long-term business success is naturally of prime interest to the corporate manager in any
market or business sector. For those in the manufacturing and light industry, let’s investigate
some of the fundamentals to ensuring profitability and longevity.
Raw Materials and Suppliers:
The acquisition of raw materials and supplies can be considered to be the lifeblood of any
manufacturing process, so this is the logical place to begin a viability assessment.
Consider the following external procurement factors:
- Are quality materials being procured at the lowest or most cost-effective price?
- Could an alternative supplier be sourced to reduce procurement costs?
- Is it possible to achieve cost and/or time savings by consolidating orders with one
or more suppliers?
- Are materials being delivered reliably, cost-effectively and in a timely manner?
In addition, now consider a series of internal (in-house) factors:
- Are sourced materials being used efficiently? In other words, is material wastage or
is rejection being kept to a minimum?
- Are procured raw materials being appropriately stored and inventory managed? This step could be critical when utilizing ‘lifed’ materials, which must be consumed by a specific date. Poor inventory management can also result in less than effective control over factors of cost and wastage.
- Is it possible to achieve further cost and time savings by projecting future demand and making purchases in bulk?
Plant Equipment and Machinery:
Maintaining efficient operating equipment and machinery can not only ensure the output of a quality product, but it can also protect against production delays resulting from plant
breakdowns and downtime.
Similarly, the management of waste by-products must also be considered. Inefficiencies in
the waste management process can also lead to delays in production time and inefficient
use of factory floor space. Consider installing or upgrading plant items such as recycling balers and waste compactors and storage systems to streamline the effluent management
process. Preventative maintenance of all manufacturing plants and equipment should be implemented to ensure the minimization of mechanical breakdowns and resultant downtime and delays.
Perhaps one of the least considered manufacturing assets is company personnel. A good
human resources program will ensure an adequate training regimen – both induction and
refresher – is implemented, and modified as necessary with the advent of equipment and/or process changes.
Employee health and wellbeing programs should also be considered. Remember that a
healthy and motivated workforce has dual benefits. For the employee, it means a sense of
pride and job satisfaction. For the employer, it means the potential for better overall
workforce stability and reduced downtimes.
Allowing for Change and Growth:
Long-term success is also reliant upon knowing what the business operation will do in the
longer-term. Forward planning should not only consider the potential growth of the operation but should also consider whether some form of diversification may be warranted in the future. This could mean the addition of new product lines, or a change in the manufacturing process which may be more cost-effective, or more in keeping with developing market trends.
Whether it be a start-up scenario or a review of an ongoing manufacturing concern –
consider the business objectives and the longer-term goals, and assess each of the keys
areas outlined in order to ensure business optimization and enduring success.