The past few years have served up tremendous change for manufacturers, particularly those that relied on overseas resources as their main suppliers. When you mix in supply chain disruption, rising prices, labor shortages, limited mobility, and unprecedented health regulations, you have a recipe for disaster for most businesses that have not overcome diversity before.
This is the time to fortify for more changes ahead. Take what you have learned and enact strategies to mitigate similar problems in the future. What new circumstances we will face anyone’s guess, but we have already been hearing about new emerging health threats, fuel shortages and political upheaval worldwide. Having the right tools to improve communication, speed up transactions and lower costs are a must for business survival.
Streamlining Process and Improving Communication
One of the tools manufacturers have at their disposal to optimize inventory and keep track of expenses across their locations is SOS Inventory, a cloud-based software designed to manage inventory, manufacturing, and sales orders from one end of the business to the other. It solves many problems for manufacturers by integrating their data across different companies departments so everyone is singing off the same song sheet. It also provides in-depth reporting for product performance so you can dig down deep to uncover sources of waste.
A major barrier to accuracy and inventory control is maintaining data in different silos created by the various departments at your company. If you haven’t made the move yet, it’s time to take your inventory to the cloud where you can take advantage of affordable inventory management software and maintain round the clock access to your data, should you need to work remotely. Streamlining processes is an important step to speeding up production and saving money, all part of learn manufacturing strategies.
Lean Manufacturing Tactics
Increasing profits in this climate is challenging, if not impossible. A tactic many manufacturers practice regularly is lean manufacturing principles, the goal of which is to reduce waste one change at a time with the goal of reaching no waste. This process reduces costs by removing bottlenecks, improving movement between workflow stations, keeping equipment in good running condition, and implementing practices that speed up production without compromising quality.
Although it is unlikely any company can attain zero waste, putting policies to work for different department can shave it down over time and result in measurable differences to your bottom line. The goal should always be to maintain quality; therefore, any changes implemented must not sacrifice quality or your company will lose the loyalty of your customers.
Moving Towards Automation
Given the labor shortage challenges many large corporations faced, the pandemic provided a push to implement automated systems for human labor replacement. Typically, machines can be used in place of any repetitive action. Machines can work twenty-four hours without a break, salary, health insurance or complaints. While the outcome is unfortunate for job seekers, automation speeds up production at a time when domestic manufacturers are challenged to meet demand. With decreased availability of foreign manufactured goods, primarily due to holdups at the port, U.S. based companies must fill the gap. Most automated systems must still be overseen by a real person, but those labor-intensive jobs will not be filled with people once the machines take over.
Thanks in part to Amazon buyer mentality, consumers have little patience for poor customer service, slow shipping times or high prices. When prices are rising but the public still expects low prices and great service, manufacturers must find creative ways to increase their margins by trimming fat whenever possible. If they can’t meet demand, a competitor will step in and take up the slack.
Automation allows manufacturers to maintain competitive pricing. Consumers are concerned with rising prices and looking to cut costs where possible. If a business passes its costs to the consumer, that consumer may look for a less expensive alternative. Most consumers will try a new brand when they have a coupon for their product.
And when businesses are struggling, they tend to trim their marketing costs first. If offering coupons can draw new customers, eliminating marketing means eliminating a large potential pool of new customers. Smart business owners know that brand building grows their businesses over time so when they aren’t actively marketing, their brand will remain top of mind. According to Food Industry Executive, “Millennial parents are almost equally influenced by mail or newspaper coupons (26%), online coupons or discounts (25%), and social media ads (25%). But they are more likely than consumers overall to expect personalized promotions (58% compared to 46%).“
At a time when the items people need are rising in cost, the things they want are getting put on the back burner. If you make items people don’t need on an everyday basis, can you pivot to produce the things they do? The answer to that question may be the very tool that bridges the gap for your business when faced with unexpected adversity.
What About Currency Disruption?
Although you’re not hearing about it in the United States, other countries have faced currency shortages when going to the bank. In China, tanks guarded the banks when the bank managers decided savings accounts were long term investments unavailable for withdrawal.
In Canada, citizens experienced lines at the bank and banks running out of money as their ATM machines shut down.
Our current money transfer system (like BossRevolution) relies on SWIFT, which, by the way, is anything but swift. Transferring money overseas can take days, holding up orders from vendors and adding significant processing fees. If we were to replace SWIFT with a digital asset, transactions would complete in seconds and incur little to no fees.
Although cryptocurrencies like Bitcoin have gained recognition and increased popularity as more corporation accept it as a form of payment, it is very expensive to move and convert to dollars. Bitcoin is also highly volatile, given it is so easily influenced by news and emotion. Stablecoins, backed by commodities, could offer more security, which would lead to customers feeling more comfortable using it.