The past 18 months have been a challenge and undoubtedly created some form of disruption for just about any type of business due to the pandemic. However, for manufacturers, the pandemic has created a unique challenge as the availability of labor, raw materials, and health concerns on the production lines have severely impacted operations and levied increased risk in connection with the ability to produce the requisite amount of goods to meet consumer demands.
While this proverbial “wrench in the wheel” has created some significant disruption, we feel there are many things that manufacturers can learn from this and leverage from in the future, whether COVID ceases to exist or becomes an endemic in certain areas.
Be Creative with Your Supply Chain – with shortages of raw materials and supplies, manufacturers should immediately seek alternative suppliers and consider ordering differently. For instance, if a manufacturer typically orders a square cut of material, why not consider a circular cut that would work just as good? Of course, there would need to be some serious cost analysis with this approach however, the opportunity cost of waiting for that square cut and idling plants could be minimal compared to keeping the production lines moving with an alternative approach.
Make On Your Own – if manufacturers have ever considered making their own parts and pieces, now is the time, especially if your plant has excess capacity, the financial means, and the engineering intellect to produce the requisite components. In addition, sourcing as many parts and components as possible closer to the production process is generally an added benefit as it reduces shipping and handling, and processing time.
Use Equipment Differently – if your equipment has the capability to produce a variety of parts, consider utilizing this flexibility to either produce components on your own, or reallocate this capacity to shore up areas where additional resources are needed.
Shift Resources – engineers are some of the most adaptable professionals that I’ve ever worked with. As such, shifting this knowledge from non-critical areas to more critical parts of the business can pay huge dividends in terms of solving a problem. For instance, instead of designing that new flavor, SKU, or new product, consider using this knowledge understand how to keep “needed” or “critical” products flowing, and in adequate supply.
Alternative Materials – with the limited availability of raw materials and supplies, manufacturers may be required to pivot and consider alternative ingredients or packaging that would serve an equivalent purpose, and keep production lines moving. For example, using a different type of insulation, a thinner plastic for protection, or an alternative mixture of product that would yield the same result and quality under normal circumstances should be considered. Again, the importance of engineers, product quality, freshness, and cost analysis should be emphasized in this exercise as well.
SKU Rationalization – retailers and manufacturers would be wise to pay close attention to consumer “wants and needs” during a pandemic and be in a position to pivot and potentially shift production towards “needed” and/or “critical” goods and services. Its imperative to understanf]d your customer and closely monitor how the sales velocity of certain products plays a critical role in terms of making decisions on what to produce and how much.
People – I was taught a long time ago from watching my father start and run a successful business that “you win with people.” This has never been a truer statement. Making sure your staff are taken care of from a safety, financial, and emotional perspective are keys to maintaining a healthy and engaged workforce. Employees crave information and value the insight as to how business conditions may impact their job and personal lives. Being as transparent and proactive business with open communication can go a long way with keeping a solid and engaged workforce.
In Conclusion – no matter what type of manufacturer you are, it’s likely that you’ve been impacted in some shape or form by the pandemic. We hope the aforementioned guidance assists you with developing some key strategies and proactive approaches with managing your manufacturing entity.
For more information on how DHW’s Manufacturing and Distribution Team can assist your organization, please contact Tim Reynolds @ email@example.com or 828-322-2070.