If you’re thinking of joining the manufacturing industry, or want to improve your current business, there are a few things you need to know. The business of production is highly competitive, and any little advantage you can get is going to have a big impact on your bottom line. And, many of these benefits will come from how you organize your business.
We’re going to take a look at some of the fundamental concepts of setting organizational goals for your business. It’s all about embracing a lean manufacturing process and getting the most out of every facet of production in your company, Let’s have a look, starting with some of the basics.
Set performance indicators
First of all, if you want to make improvements, you have to set up ways of measuring your successes – and your failures. Every single facet of your company should undergo some form of measurement. It will give you the chance to see where your biggest inefficiencies lie. Does it take you too long to complete an order and deliver it to your customers? Are there times of the day when staff are less productive? Are you spending too much on materials to create your products? All these things add up over time and leave with a less efficient business model.
Look at your entire procurement strategy
Buying materials, logistics, and stock control all have an enormous impact on your bottom line. If you can find ways to cut costs without affecting the quality of your product, it’s clear that you will benefit. Your new plan should look at more efficient ways of holding stock, delivering your goods, and using cheaper transport methods. Once you have some sort of tracking and inventory system in place, you will be able to see where to reduce many of your costs.
The costs of production
Of course, you get all the costs of your production back when you sell a product. But, is this giving your customers the best value? If you can lower your production costs, they will get a better offer – and you should be able to grow your market accordingly. Good planning is essential, of course. But, you should also look at basic housekeeping duties as much as you look at faster lead times. Everything that occurs in your factory or processing plant has an effect on your cost of sale. Take a look at this lean 5S training course for an example of why all areas of your business are so important.
Supply chain issues
Finally, as mentioned above, delivery times and costs can impact your business in many ways. Not only will it increase the cost of your product, but it can also cause serious customer service issues. It is essential, then, that you look at ways of reducing your delivery time while making it more cost-effective. You can build up better relationships with your suppliers and delivery companies, for example. You can also look at lowering your storage costs, and make sure you have tighter controls. Each of these issues can cause your costs to spiral out of control, and by tackling them, you will improve your bottom line.