How to Solve Biggest Problems in a Small Manufacturing Business

Every manufacturing business be it small, medium, or large faces some common operational concerns. But there remain some challenges that are unique to businesses of a certain size. A small manufacturer may come across operational issues that a large manufacturer doesn’t.

This blog focuses on one such set of challenges faced by small-scale businesses with possible solutions:

Overproduction

Production and productivity top the list of concerns for most companies. And, while businesses strive for enhanced productivity, on the one hand, it struggles to curtail overproduction on the other.

Overproduction leads to higher inventory levels along with longer lead times, oversized batches, and higher working capital requirements. Therefore, it becomes crucial to control it.

Overproduction commonly occurs when you anticipate some orders or even when you try to optimize productivity. To avoid such an occurrence, it’s important to periodically create operational plans and anticipate demand accurately.

Map production activities completely with sales orders, employ a pull system (a lean manufacturing strategy) to reduce waste, and manufacture goods in smaller batches to curtail excess production. Implementing such practices requires software that helps you use supply chain planning to control operations without overproducing.

Disruptions

If you’re a business owner it’s tempting to manage all or most of your operations alone. But this can leave you and your business unorganized. An unplanned disruption in workflow or an unattended breakdown can all result in major resource waste.

To tackle this, strategically delegate the deliverables. Identify elements that be managed meticulously by another resource. Consider investing in the automation of business functions by implementing a manufacturing ERP. An ERP software like SAP Business One can manage business operations and save you from persistent operational concerns.

Excessive Movement

Long supply chains and movement of goods from long distances adds cost and time. Resolving this situation requires paying close attention to every business process, along with lead times and their costs. And, computing the lead time against the total production time to identify gaps.

Having an ERP system allows you to identify lead times and plan accordingly to minimize transportation costs. Source raw material closer to the factory, analyze each inventory movement, bring all functional areas closer together, and design or seek professional assistance to plan a value stream map for an optimal plant layout.

Inappropriate Processing or Overprocessing

Keeping a tab on operational processes as a business owner is a demanding job. Being on top of the work, planning, and strategic decision-making requires so much time that you may miss shop floor processes. As a result, over-processing can occur. For instance, implementing Standard Operation Procedures (SOPs), despite specific customer requirements, can lead to over-processing, more time, and costs.

To overcome this, determine if there’s an operation that can be altered? Scrutinize sales orders before generating production orders. Reviewing shop floor processes periodically can help to keep things running smoothly.

Defective products

No manufacturing business is perfect. Most businesses generate defective goods for various reasons. Defects remain a concern for all sectors and scales of business.

Typically, defects can occur due to non-standard operations, inferior quality of raw materials, poorly-maintained equipment, or a lack of trained shop floor staff.

But, the issue is how can you minimize it all?

A great way to check such an issue is to pump up quality control (QC) or inspection processes. You can carry inspection at stages such as: on receipt of raw material, during the production process, before dispatching finished goods, and on an ad-hoc basis.

Implementing a thoroughly planned QC process can help you check for defective counts. Apart from this conduct a root-cause analysis to assess the reason behind the defective count. Draw a schematic QC plan to ensure minimal defects in your products.

Conclusion

Overcoming day-to-day operational challenges can be taxing if you fail to recognize the quantum of each issue for the long run. Having a clear vision can help you resolve these situations and attain your business goals.

Here’s a summarized list of key steps that you can consider to counter the mentioned challenges:

• Delegate tasks, hire a dependable workforce to ensure you can plan strategically for your business.
• Use ERP software to manage day-to-day business operations, access reports, and analyze issues better. With accurate data, you have accurate control.
• Cut your business running costs with thoughtful business plans to cut overhead, over-processing of goods, and working capital requirements with better inventory management.
• Implement lean manufacturing principles for continuous improvement.

Download our whitepaper on A Roadmap for ERP Selection in Today’s Digital World if you wish to learn more about the core features of an ERP solution and how it can help your manufacturing business with its function.