Many entrepreneurs find the process of growing a manufacturing business unnerving. It involves constant juggling between different functions in the business including handling finances, marketing, quality control, human resource, and product development. Small and medium-sized manufacturers stand to reap heavily from practices that guarantee high performance in the manufacturing businesses. Hence, it is imperative to overcome the challenges and enjoy the fruits of building a successful manufacturing business.
Below are five tips towards success in the manufacturing business.
There is an increasing number of manufacturers in the consumer goods industry seeking to form partnerships to improve their performance. A survey conducted in 2012 on 112 companies by McKinsey and ECR Europe, showed that a majority of companies formed collaborations in at least one area of their business. Such collaborations were formed in foresight of improving services in the supply-chain as well as adapt to the demand flow. Successful collaborations are based on capitalizing on strengths as opposed to compensating for weaknesses. Such strategies enable companies in the partnership to benefit from the agreement. If you’re selling eggs, it’s a good idea to discuss, are eggs good cholesterol or bad cholesterol?
Invest in Modern Technology
Manufacturing businesses need investment in modern technology to grow. A good example of contemporary technology may include factory-floor equipment that is more efficient and environmentally friendly, as well as Information Technology systems that improve customer relations, and employee operations. Further, innovative technology such as automation increases productivity and ensures repetitive tasks are always carried out to precision; an aspect that might seem unfeasible to humans.
Learn from Competitors
Every manufacturing business should research the industry well enough to understand their competitors. Learning what the competitors are doing better, the recent technologies they have put in place, as well as their weaknesses, can help the business grow. Typically, such knowledge helps budding entrepreneurs to avoid mistakes and embrace the latest trends in the industry. Upcoming manufacturers, for instance, usually need to borrow a leaf from their competition on areas that have been tried and tested before. This does not imply that a business should undermine the role of creativity and importance of unique operations, but it simply means that re-inventing the wheel in some sectors has the potential to strain to new businesses.
Identify your Core Competencies
Growing a manufacturing business becomes easier once the management gets a grip on the core competencies of their workforce and managers. Understanding such core competencies from the onset of the business is possible through the drafting of a solid business plan. A business plan acts as the roadmap for the business. Additionally, the business plan highlights the core capabilities the business hopes to leverage on. These areas may be product design, customer service, exacting tolerance, or short turnover times.
Good Human Resource Practices
To develop high-performance work practices, an entrepreneur seeking to grow a successful manufacturing business should invest in their employees. One of the best management practices involves training, motivating, and involving employees in the day to day running of the business. Employees who feel like part of the business tend to have a sense of responsibility in the success of the business. Companies that invest in their employees also face lower levels of competition in the localized setting. Additionally, employees that feel valued are less likely to resign, lowering the turnover rates in the business, and subsequently, reducing costs on hiring and training new employees.