When investors decide to go the manufacturing way, the goal is to progressively grow their ventures and become multinationals. These goals are leveraged by the fast adoption of new technologies and systems such as lean manufacturing. But the moment you start the operations, it becomes clear that the path is not as smooth as expected.
It is estimated that about 50% of businesses fail in the first year, and 95% by the fifth year. So, why the high failure rates? In this post, we highlight the major challenges in manufacturing that you need to know and methods of addressing them.
Lack of Skilled Labor
Today, the baby boomers generation is exiting the stage, and the manufacturing niche has started facing a shortage of skilled labor. Deloitte indicates that by 2025, the manufacturing sector is likely to face a serious shortage of jobs across the globe. Note that we are not simply talking about any employee, but employees with skills sets for operations in different industries. So what can you do about it?
- Focus on staff retention.
- Invest in human resources development.
- Adopt industrial automation in different parts of your system.
Project Management Challenges
The moment you join manufacturing, getting products to the market requires that adhering to strict timelines. But controlling every project is a challenge because you are required to focus on quality, cost and time.
If these parameters are not met, there is a danger of losing revenue and profits. Some challenges that can further complicate your projects include unexpected downtime, challenges in getting raw materials, and need for new manufacturing technology.
To address challenges in project management, you should consider working with project automation software that helps with scheduling and resources allocation. Further, you should adopt preventative maintenance that helps to reduce breakdowns.
Forecasting Demand for Products
Every year, more manufacturers are joining the market with the goal of making profits. This means that competition keeps growing tighter, the demand for products takes a dip, and revenue also dwindles. This makes it very difficult to forecast the demand for your products. To address this challenge, here is what you can do.
- Make sure to only develop high-quality products.
- Progressively improve your products.
- Keep contact with your customers.
- Use the latest technologies to keep the cost of production and price of products low.
- Learn about your competitors and use better strategies to outdo them.
Today, many manufacturers look at every opportunity to cut the cost of production and enhance efficiency. But increasing efficiency is challenging because it requires a lot of investment. For example, if you want to cut power-related costs, the solution might be changing the lighting and machines such as motors in the facility. In other cases, you might need to change the entire system, which is expensive.
The best solution is looking at the changes needed to enhance the efficiency of your system as an investment as opposed to cost that can be foregone. You can also redefine your system progressively to enhance its efficiency. For example, if you are in the mining industry like this one, you can automate the system in phases, starting with the critical areas. You could also get investors to inject the funds you need for manufacturing system’s upgrade.