Unlocking the Maximum Potential: 5 Universal Optimization Strategies You Can Apply to Your Manufacturing Business
In manufacturing, as in any business, profit is king. Optimization: lifting profits while decreasing costs; prioritizing performance and efficiency; measuring and iterating over and over again for maximum productivity. It was and always will be the golden rule. But doing so is easier said than done, especially in today’s rapidly shifting and ever changing manufacturing landscape.
Automation is starting to upend manufacturing at an unprecedented rate. The Internet of Things (IoT) and Artificial Intelligence (AI) are breaking new boundaries and introducing science-fiction level technologies to the manufacturing space. Big Data has never been a hotter topic in the field. Amongst all these rapid changes, knowing how to optimize a manufacturing business can be very, very confusing. Where does one event start?
Not to worry. To give both budding and established manufacturers a hand, we’ve collected five ideal optimization strategies below. Rather than focus on manufacturing-specific ideas, we’ve adopted basic strategies that will help you simplify and maximize. These plans are well-suited to the manufacturing industry and should easily help you increase that profit margin, even in today’s mind-boggling increasingly global manufacturing market. So keep reading, and let’s get back to basics.
Strategy #1: Assess your business’ current process thoroughly.
There are many different names for it: process. Product life cycle. Product flow. Whatever you call it, your business currently has a process in place for acquiring raw materials via supply chain, taking them in, using them to manufacture a product, and then getting that product to its requisite market.If you want to optimize your business, you’ll need to know that process very, very intimately.
Optimization depends upon knowing your process, finding out where it can be improved, testing new options, and then implementing them correctly and efficiently. If you don’t have solid knowledge of each and every stage that goes into the creation of your manufactured product, optimization will remain out of reach.
This means you need data. How much are you spending at each stage of the process? Is there a way to optimize, say, laser cutter accuracy or employee work during manufacturing? Can you acquire bulk ingredients for less at the start of the process? Does your supply chain seem unnecessarily complicated for what it is? Collect as much information as you can about your existing processes, and then you’ll be ready to optimize.
Strategy #2: Think hard about complexity and how to simplify processes.
Complexity is a huge problem in manufacturing. As products become more complex and as more businesses merge to take care of ever more technologized products, such complication is all but unavoidable. Customers want more, and faster than ever before. Amazon has seen to it that next-day arrivals are now a necessity for everyday, average consumers rather than an esoteric luxury for the rich and extravagant. Markets and competition are becoming more globalized than ever, as well as more uncertain than they previously were during their lives as regional or national entities. Manufacturers now may have to serve clients in wildly differing climates, industries, cultures and regions, which easily puts a wrench in even the most carefully-laid plans. Almost every market now deals with the impact of high speed technological innovation, meaning competitors are now rushing to implement automation, big data, AI or machine learning at a breakneck pace. Under such conditions, any manufacturing business now becomes a much more complex thing than it was ten or twenty years ago.
Is it surprising? No. Does it need to be addressed? Yes, if optimization is still a part of your business plan.
Knowing where the complexity stems from in your specific manufacturing process, and how to cut down upon it, is vital. Doing so will allow you to optimize your business and gain a competitive edge, maximizing profits as well as capitalizing on product and customer satisfaction. Whether your logistics need some work, you can cut down on worker load and simplify jobs, or your supply chain could be made much more efficient than it currently is, complexity is guaranteed to be one of the areas that can be most optimized in any manufacturer’s plan for the future.
Strategy #3: Create a workforce and a business that are capable of change.
The truth is, optimization equals change. It means changing your relationship with your employees, shifting your purveyor of raw materials, trying something different with your manufacturing process itself, giving a new supply chain a try, or shipping your final product differently than you did before. For manufacturing, which is already a very complex industry, such change can be hard. Such change can be very, very unwelcome, especially when mergers and shifting markets create complex manufacturing systems that aren’t fully homogenous.
That’s why creating a workforce and business that are amenable to change, rather than resistant to it, is so important. If your employees need to undergo significant changes to their working environment or daily tasks, they need to be able to weather it. If your overarching goals as an organization change, then every employee needs to understand why and how, and be able to adjust their particular station to it. If you decide to employ a different kind of manufacturing technique across all workplaces you own, each one needs to have the same equipment and processes in place. Otherwise, change in the name of optimization is simply a lofty goal, not a realistic achievement.
Strategy #4: Adopt Already-Proven Practices.
This seems like a simple strategy, but it’s one often left at the wayside and forgotten about by CEO’s and strategists alike as they get blinded by big words like “synergy” and “increased efficiency.” If someone in your industry is already doing something better than you, and you’re allowed to copy them without infringing upon any copyright or other intellectual property laws then: you should most definitely go right ahead.
Reinventing the wheel is no fun for anybody involved. Not to mention, doing so could end up costing you so much in the ideation and testing phases that it’ll take you a long time to recoup on your ironically-named “optimization strategy.” It doesn’t sound like a fun time, right? For those reasons, it’s worth paying attention to friends and competitors. They might have business practices that edge yours out in one way or another, and adopting said new practices is a great way to maximize efficiency. Collaboration is often the missing key to success.
On the other hand, maybe it’s just that even though it’s not quite a “best practice,” you’ve just always run your business a certain way and change has seemed intimidating, hard, or too much of a nuisance. Regardless, sticking with something old-fashioned isn’t always a bad thing, but it could be one of the factors preventing you from fully optimizing. Tradition is there for a reason, so we’re not suggesting you should totally ignore it. That said, it’s worth taking a close look at the things you do solely because they’re traditional or because you’ve never had to critically examine them before — they could be holding you, and your business, back.
Strategy #5: Ideate and test until you come up with something that works.
Finally, we have the process that lies at the heart of any optimization operation: ideation and testing. The core objective when optimizing a manufacturing business is to make parts of your process or product life cycle more efficient. That’s the bottom line. So after collecting data and figuring out which elements can be modified and improved upon, whether it’s a tech aspect of the manufacturing process, a simplification in worker roles, a less complex supply chain, or something else altogether, you’ll need to come up with multiple ideas that actually accomplish all those lofty goals.
Again, these are ideas, and ideas are not results. So after ideating, manufacturers need to have a thorough testing phase. It could turn out that one bright idea actually performs much worse than your current system, but you wouldn’t know that unless you had systematically tested it. In terms of optimization, it always pays to test thoroughly before implementing. Change on such a large scale is necessarily messy and complicated, no matter how simple it might seem before you go through with it.
To recap, here are five universal optimization strategies that will pay dividends in the manufacturing space:
- Assessing your business’ current process thoroughly and systematically;
- Addressing complexity and the individual processes that go into creating it;
- Creating a workforce and business structured to accept change smoothly and readily;
- Adopting proven, already well-established best practices; and
- Ideating and testing until success becomes a sure bet.
The truth is, manufacturing industries are only likely to get more complex. More and more automation, technologization, and market globalization are sure to see to that. As such industries become more and more complicated, optimization will play an increasingly important role in enabling manufacturers to keep their products consistent, well-priced and accessible to the markets they ideally would like to serve.