7 Manufacturing Challenges Businesses Have to Overcome

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    Your manufacturing business could be going great, but slower periods are inevitable. In some cases, the whole operation could stop due to a force major. Take the recent pandemic, for example.

    Of course, such events are rare, but one cannot predict what might happen in the future. Preparing in advance and having a backup plan minimizes risks during difficult times.

    Similarly, knowing what challenges await in the manufacturing industry is also beneficial. By knowing what to expect, you will have a better understanding of how to interact with an issue and overcome it.

    Let’s take a look at some of the most popular manufacturing challenges getting in the way of aspiring companies that want to succeed and make profits.

    1. Automation

    The demand for orders is increasing as more people join the economy. Globalization makes international orders more common, which also adds to the overall demand for orders.

    One way to avoid falling behind with orders is through automation. The more streamlined and automated the business processes, the less strain manufacturers feel when they have to fulfill large orders.

    Working in a competitive manufacturing environment, failing to keep up with consumer demands puts pressure.

    In a way, technological advancements seem to be happening every day, and it’s hard to follow everything, even if you keep a close eye on the industry-related trends.

    Other than tracking what’s happening, cost concerns are another tricky aspect of enabling automation. Bigger companies usually have no problems making the most out of the state-of-the-art software that firepowers the capacity.

    Having said that, automation doesn’t have to take a major cut of the company’s budget. There are a fair few solutions that are relatively cheap to implement. 

    2. Globalization

    As we mentioned already, globalization is one of the reasons why manufacturing companies have to increase their production to keep up with the market demands.

    Working internationally gives more freedom. You can choose from a bigger supplier pool and seek potential leads outside your region. 

    However, globalization presents risks to the supply chain. By venturing into international waters, you cannot be certain that your new supplier, for instance, will deliver on their promise. Working with local suppliers is less problematic because you can contact and work out problems with them more easily.

    International suppliers, on the other hand, present a risk, especially if you are working with them for the first time and cannot gain sufficient local insights or reports to form an opinion.

    One final thing to note about globalization is that while it opens doors to more opportunities to work with new suppliers, you also have to consider the same happening for your competition.

    Competing against other manufacturers becomes harder when they have similar opportunities and want to expand in your market.

    3. Ineffective traditional marketing strategies

    Marketing methods that might have worked in the past may no longer be as effective. An average consumer is getting smarter, so persuading one with simple marketing tricks is hardly an efficient way to generate leads and convert them.

    If you expect to make a profit by simply making a website and expecting the traffic to come, note that it doesn’t work that way.

    Qualified lead generation is one of the biggest challenges for aspiring manufacturers. It’s all well and good if you run an already established business and can depend on word of mouth and current clients to carry you.

    And even then, for businesses that are doing well at the moment, there are no guarantees that the same will be happening all the time. If they run into problems, getting back to what was before can be too much.

    Sadly, there are no right ways to create a marketing strategy that will woo the leads and beat your competition.

    Some businesses seek long-term approaches like outsourcing search engine optimization. Others prefer a short-term approach of investing in ads on different platforms and targeting specific audiences.

    Ultimately, it’s about visibility. The more resources manufacturers can dedicate to marketing their business on different platforms, the higher the odds of getting ahead of others and scaling the venture.

    4. Scaling the venture

    Deciding when to scale your business is trickier than one might expect. If you miss the mark and decide to scale the operations too early or too soon, it might come back to bite you in the short or long run.

    Determining that sweet spot and finding the right timing comes down to a plethora of factors. And if you play your hand right, there are still no guarantees that you manage to find the opportunity.

    Instead of chasing perfection, manufacturers ought to take the necessary steps to reduce the risks and increase their odds of success.

    The steps to take should be:

    • Understanding how your products are performing in the market
    • Keeping up with the industry trends 
    • Projecting potential problems that might occur in the market and your company specifically
    • Ensuring that there are enough resources to keep up with the scaling

    A manufacturing company might jump at the first opportunity to scale itself, particularly if its direct competitors are getting ahead. Regardless, it’s imperative to weigh all the risks associated with scaling before you commit. 

    5. Cybersecurity risks

    Manufacturing business is no exception when it comes to cybersecurity risks. Hackers are not that choosy, and they will attempt to attack a company if it yields political, financial, or other gains.

    The rise of technology leads to digitization, but not every company is willing to invest in security solutions to avoid attacks. 

    Individual devices like smartphones and computers become vulnerable, too. Not all employees are tech-savvy enough to know how to reduce RAM usage on Mac or fix Wi-Fi troubles, much less prevent cyber attacks targeted at their devices.

    It’s better to be safe and sorry and take a proactive approach. Instead of neglecting the necessary precautions, manufacturers should invest in robust security systems (e.g., Crowdstrike or competitors).

    6. Environmental concerns

    Despite very clear evidence suggesting multiple threats to our environment, many companies still choose to ignore the risks and focus on short-term gains rather than long-term consequences.

    Such a mindset leads to the government creating and enforcing regulations that restrict manufacturers from running rampant.

    Non-compliance results in penalties and reputation loss. Companies must comply with the rules and strive to change their processes to reduce their toll on the environment. 

    Implementing less damaging manufacturing practices can be costly, but it is inevitable for the good of the manufacturing industry and the environment.

    7. Maintaining margins

    For manufacturers, as little as 1% of increase in cost can lead to profit loss. Maintaining tight margins is difficult in an ever changing economy. Inflation, demand changes, competition, and other factors affect the outcome.

    More and more companies are leveraging technology. Saas-model solutions from the fintech industry, for example, change how manufacturers approach efficient spending prioritization.

    Companies that automate expense and subscription management can dedicate more resources to analyzing data and making informed business decisions. 

    Having said all that, streamlining financial transactions improves the situation, but manufacturers need to be wary of potential risks. 

    Vulnerability to financial crime exists, hence it’s also recommended to utilize transaction monitoring solutions to identify and deal with suspicious activities.

    Closing thoughts

    All in all, the manufacturing industry is facing some serious challenges. It’s up to the businesses to find solutions, particularly when it comes to finding skilled workers.

    Is automation the answer to some of these problems? Perhaps, but it is still unclear how things will pan out in the long term. It’s better to cover as many bases as possible so the odds of running into real trouble are as low as they can be.