The manufacturing industry is one of the most important to our economy. Consumers felt the impact first-hand when they couldn’t buy everyday items like toilet paper.
Manufacturing companies had to adapt and they’re facing more challenges than ever before. What are the top issues in manufacturing and how can you prepare for them?
Read on to find out.
1. Recovering from COVID-19
Manufacturing was hit hard by the pandemic. Between lockdowns, social distancing, and supply chain disruptions, manufacturers had to find creative ways to adapt.
The economy is growing and it looks to stay that way. However, there are COVID-19 variants that are causing chaos in some areas of the country again.
You’ll need to continue to be aware of changes and how they impact your business. Remain flexible, understand the risks, and be ready to adapt at a moment’s notice.
2. Automation and Machine Learning
Companies are looking for any edge that increases efficiency and improves quality. That search is the reason why so many adopted automation and machine learning.
Manufacturers use robotics and Internet of Things (IoT) devices to perform repetitive tasks. The key advantage of IoT devices is that you can collect data.
That lets you make strategic decisions to further your business goals.
3. Finding Skilled Labor
The adoption of advanced technologies created a shift in the manufacturing workforce. Manufacturers aren’t looking for floor workers that can perform a single task over and over during an eight-hour shift.
Instead, they’re looking for workers that have high-tech skills. Robots took over many jobs, but someone has to manage and work with the robots.
That created a gap in skilled labor that manufacturers are struggling to fill. It’s only going to get worse over the next several years.
You need to get ahead of the issue now. Be clear about your needs. Partner with business organizations such as the chamber of commerce and legislators to create training programs for skilled workers.
These are high-paying jobs, and everyone in the community should get on board with these programs. You create a generation of skilled workers and fill a vital business need.
4. Breaking Down Silos
It’s incredibly important to have your teams on the same page. The design team has to send the correct specs and the engineers control automation and processes. The workers on the floor, marketing, and quality control all have to be aware of critical changes.
It’s easy to have these teams work in silos, but your quality suffers. That trickles down into unhappy customers, which turns into revenue problems.
Enterprise Resource Planning (ERP) software centralizes all of your information. You can keep everything from spec sheets to sales data there.
There are solutions for different types of manufacturers, including automotive to metal fabrication ERP software. Get a list of your business needs and budget. Look for ERP solutions that have the features that match your needs.
4. Meeting Margin Estimates
When was the last time you looked at the cost of doing business with a customer? Even if you’ve worked with the same customer for years, you could be losing money each time you do business with them.
Analyze the operating costs for each customer. Look over the costs for production, shipping, and client management. Then look at the revenue from that customer and calculate your profits.
Do you find that you’re making money some quarters and losing money in others? It may be time to shorten your contracts.
That doesn’t mean that you’re going to lose your customers at the end of each contract. You have to adjust your pricing to ensure profitability.
5. Regulatory Compliance
The manufacturing industry is challenging because there are so many laws and regulations you have to comply with. Between OSHA, state laws, local laws, and tax requirements, you have serious risks to your business if something falls through the cracks.
You might need to create safety data sheets and have procedures to satisfy your insurance policy requirements. If that’s not enough, the target seems to move every year.
You should always keep up with legislative updates and make sure you’re adjusting your business accordingly.
6. Managing Supply Chains
The pandemic interrupted every aspect of manufacturing. That includes shipping and supply chain logistics. Manufacturing is still the most affected industry, with almost 60% of manufacturers saying that they experienced a disruption in June 2021.
There are other issues at work beyond the pandemic. Record heatwaves, wildfires, and droughts are causing supply chain disruptions as well.
Climate change is a big risk to supply chains. It will remain that way for years to come. You need to create a long-term strategy to mitigate this risk.
7. Customer Acquisition
How do you market your manufacturing business? Do you rely on traditional methods? Maybe you rely on direct B2B sales?
You need to adjust your customer acquisition strategy for the digital world. Your sales team doesn’t have the influence it once did.
Customers research your company and usually have a decision before they meet with your sales rep. About 27% of B2B buyers look online first for company information.
You need to position your company so it makes the best impression possible. Invest in digital marketing strategies like PPC ads, SEO, and content marketing.
You should be active on LinkedIn to build relationships with decision-makers, but you don’t need to be on Instagram or TikTok.
Don’t overlook the importance of your company website. Decision-makers will form an impression of your business based on your website’s appearance.
Manufacturing Industry Trends and Issues
It takes a lot to build a manufacturing business. There are a lot of challenges facing the manufacturing industry. Now that you’re aware of the most common manufacturing issues, you’re prepared to meet them head-on.
You’ll end up with a much stronger business. For more great business insights, check out the other articles on the blog today.