Eight big manufacturing mistakes that businesses always make
The manufacturing branch of your business is so important, without it, you can’t create amazing products for your customers.
But for a lot of new business owners, manufacturing is outside of their comfort zone. If you’ve been working in business for a while before starting your own, you probably have some good experience with sales and marketing or finance, but it’s not likely that you know the ins and outs of manufacturing.
If you don’t get your manufacturing processes spot on, you’re really going to struggle to get the business off the ground. You can put as much money into marketing as you like but if the product isn’t good, you’re never going to be successful. Unfortunately, a lot of new business owners find themselves in that situation because they’re making these big manufacturing mistakes.
Not Hiring Good Management
It’s important to remember that you don’t have much experience in manufacturing, that’s why you need to rely on your management team to deal with the day to day running of the place. If you don’t hire the right management for your manufacturing operation, it’s never going to be efficient. When you’re interviewing people for the position, experience is absolutely key. Pick somebody that has a lot of experience running different manufacturing operations. It’s also important that you look for the relevance of their experience as well as the number of years they’ve spent on the job. Every product is different and requires its own processes, so you should be looking for people that have experience manufacturing products that are similar to yours.
Poorly Built Equipment
Good staff are important if you want your manufacturing operation to run smoothly, but the equipment that you use is equally as important. If you try to cut costs and built cheaper equipment and machinery, the quality of your end product will suffer. That’s why it’s important that you buy the latest machines and keep them updated regularly. Don’t neglect the smaller parts of your setup like the stainless steel tubing, for example. It’s not just about all of the high tech equipment, every single component needs to be absolutely perfect if you’re going to manufacture high quality products for your customers.
Lack Of Training
Even if you’re not experienced in manufacturing, you already know that you can’t just let people loose on the machines without any training. When you hire a new employee, they’ll go through training so they know how to use everything safely. But if you stop there, you’re making a big mistake. People will slip into bad habits and forget things over time so it’s always a good idea to refresh people’s training every year at least. If you’re updating your equipment, you need to retrain everybody as well. Even if the new equipment is basically the same as what they were using before, it may have different safety features and it’s important that they understand how to use them properly. Regular training is also useful because it can help you to highlight any issues with your manufacturing processes so you can iron them out and make things more efficient.
Not Having Insurance
It’s so important that you train your staff properly so they know how to follow health and safety procedure properly but there is always the chance that somebody will have an accident. Manufacturing is dangerous and sometimes, accidents are unavoidable. If one of your staff members is injured, they may claim compensation from you. These kinds of settlements can be incredibly expensive and if you have to pay for it out of your own back pocket, your business is going to be in some serious financial trouble. But if you’ve got liability insurance, it will cover any workplace injuries.
You’ve spent a lot of money on all of your manufacturing equipment and you don’t want to be replacing it if any of it goes wrong. You can avoid most breakdowns by maintaining the machines properly but it’s still going to happen sometimes. That’s why it’s essential that you insure everything properly so you can easily replace any broken equipment. Look into the different types of business insurance and make sure that your manufacturing operation is properly covered.
Buying Materials In The Wrong Quantities
Your material costs are so important because they’ll have a big impact on the price of the end product. If you aren’t getting your materials for a good price, you’ll have to charge more for the final product and that means you’re going to struggle to get more customers in. You could always try to cut costs by buying worse quality raw materials but then you’re going to be manufacturing low quality products and you’re going to have a hard time making more sales.
What you should be doing instead, is buying good quality materials in volume, which is more cost effective. However, it’s important that you consider the cost of storing it. If you buy extremely large volumes, you’ll have to store it all for a while. If the cost of the storage outweighs the savings that you’re making by buying in volume, you’re wasting money.
Poor Communication With Manufacturing Staff
Communication is essential in all areas of the business, but a lot of people have poor communication with their manufacturing staff. That’s a real problem for a few different reasons. First off, the manufacturing staff are the ones that know where all of the inefficiencies are and where you could be saving money. If you don’t consult with them, you’re missing a golden opportunity to improve your manufacturing processes and create better quality products at a better price.
It’s also important that your manufacturing staff are in the loop so they know if you’re expecting a huge influx of sales and they need to step up their output. For example, if you’re launching a promotion and you expect a lot of people to buy a certain product over the next month, you need to let your manufacturing staff know well in advance so they can prepare for the increase and perhaps even hire some temporary staff to handle it. You should also share your sales forecasts with them on a regular basis so they don’t get caught out by any sudden increases in sales.
High Employee Turnover
High employee turnover is a fear for all businesses. When you lose a valued staff member, you have to spend time and money hiring a replacement and training them. You also lose the expertise of a person that knows the job inside out and that can have a serious impact on productivity. This is especially damaging in your manufacturing department. Your staff are well experienced in making your product the best it can be. They also know how to do it in the most cost effective way. If you lose key members of staff and you have to replace them with somebody that doesn’t have that experience, you may see a serious drop in the quality of your end product and that’s going to have a negative impact on sales.
Keeping your staff can be tough and sometimes, people will leave for their own reasons. There isn’t a huge amount that you can do about that but often, employees will leave because they don’t feel valued, they’re not being paid properly, or they’ve had a better offer from elsewhere. To avoid that, you need to make sure that you’re paying a good salary to all of your employees and you’re offering them a decent benefits package as well. It’s not all about money though, you also need to make sure that you let your employees know that you value their hard work. People are more motivated and they’re more likely to be loyal to your company if they feel as though their efforts are recognized and valued.
Managing your inventory is incredibly important if you want your manufacturing processes to be efficient. Your manufacturing team needs to be aware when you’ve got low stocks of certain products so they can adjust their output. If you don’t do that, your manufacturing team will be playing catch up and your customers will be left waiting longer for their products.
If you’re trying to manage inventory manually, you’re going to make mistakes. It’s definitely worth investing in some inventory management software to make your life a lot easier. You can automate all of your inventory management and even send automatic updates to the manufacturing branch so they know exactly what to expect.
Inventory management software also helps you to keep tabs on which products are selling well and which ones are underperforming. If you’re struggling to make sales of a certain product, even though you’ve marketed it well, it might be because the quality is poor. Your manufacturing team needs to know about that so they can do something to rectify it and improve the product.
Your business is nothing without an amazing product so it’s important that you avoid these common manufacturing mistakes.