Organizational chaos and lack of strategy
An eternal priority for our manufacturer is to have as many workers in production as possible, which often means insufficient numbers in supporting functions. This can end up with production employees having to deal with tasks that should not be part of their job description. But most often it results with the management being overburdened with obligations, with no one to delegate to so it starts to fall apart (“management” often being just the director).
The directors often function as sales and marketing, and development, and negotiation, and legal affairs, and accounting, and HR, and everything else that keeps the company going.
It is completely understandable that the manufacturer does not know how to organize his newly grown company and determine the best future business direction, nor does he need to know everything himself. And he is also aware that, for instance, investing in a new machine and hall is not enough if the rest of the company falls behind.
That is why there are experts: organizational, technological, strategic. It all depends on what the director-producer wants and plans – the growth and expansion of the business, stability and the ability to devote more time to other things, or selling the company. In any case, it is necessary to introduce certain changes, unless one wants to maintain the status quo, which is not sustainable in the long run, and does not actually exist in the true sense.
And what are the most common problems that manufacturers themselves complain about?
Lack of skilled labour
We find it very difficult to find quality workers.
A lot of employers from various industries complain about the problem of finding good employees. Even when they manage to find employees, it often happens that, according to them, they are not motivated enough to work or do not pay attention to instructions. The amount of salary is, of course, one big factor in the topic of attracting and motivating workers, but it is not the only motivating factor, and we’ll assume that in this example salary is not the cause of the problem. So far we’ve also seen some less than ideal working conditions, but we’ll leave that for another time as well.
What our small producers often lack are clearly defined functions within the organization with thoroughly described jobs and tasks.
A well-organized system of business routines enables new employees to find their way much faster and significantly reduces the possibility of mistakes and misunderstandings.
In addition, investing in better technology can significantly reduce the interventions required during the production process, as well as the number of workers needed per shift.
Quality control
We cannot guarantee better product quality (workers or technology are to blame).
Without a quality monitoring system and clearly described tasks, it is impossible to always maintain the same level of quality and uniformity of production results. This may not have been a problem for our manufacturer so far, but if they want “better” customers, new markets, development of some new products, it will be difficult to do anything without well-defined standard operating procedures.
On the other hand, investing in technology is expensive but can be very cost effective. Sometimes it just isn’t not possible to go one step further without investing in better tools.
Sales, marketing and business development
We don’t have time to look for new customers and opportunities.
Our director-producer does not have much time for anything, but this is one of the key functions for maintaining and growing the business. The worst thing to do is to completely ignore these functions or perform them on the go, when there’s extra time – but mostly reactively. The organization of internal sales and marketing departments or business development is certainly a goal to be pursued, and until then it is wise to leave it to someone else.
Almost everything that is not the primary activity of the company can be outsourced.
As with other problems, a well-established system greatly facilitates the process and the delegation of tasks.
Cost management
Our costs are too high and it’s very complicated to reduce them.
Poor organization inevitably leads to reduced efficiency. And costs can often be successfully reduced while maintaining the desired result. But it is unlikely that the manufacturers, along with everything else they deal with, will come up with a solution for the actual optimal cost of the process.
Manufacturing is a complex system and one intervention can easily cause problems elsewhere. That’s why they often prefer not to touch anything – it’s better to run it as is than to mess something up.
The primary objective is not always to drastically reduce costs, but to ensure the highest possible return.
For example, the development of products with higher added value can be a better solution that justifies higher costs.
Digitalization and implementation of ERP systems
We don’t have time to study all these solutions now, and none of them will be exactly what we need.
Sometimes it seems less of a risk to leave things as they are than to make any major changes. But the problems grow bigger – increasing disorganization, difficult monitoring, inability to predict changes, work remotely, etc. In that case, everything depends on the human factor, and very often on one particular person (or persons). No one can easily take over a certain job and it is difficult to optimize anything.
Many smaller manufacturers do not even know that there are experts who can do it for them, describe their business processes and find the optimal solution for them on the market.
Individual topics will be elaborated in more detail in future articles. There is still a large list of potential problems faced by manufacturing and other companies. The good thing is that for each of these problems there is always is solution, and we can help you choose the right one.
We will be happy to help you with any challenges, whether organizational or technological.