Manufacturing companies are constantly devising ways to increase operational efficiency in order to keep profits high and costs low. Here are some of their most effective strategies.
Outsourcing
Outsourcing is a proven method to save time and money. It also supports a business to stay competitive by allowing the company to focus on their core competencies rather than spreading themselves thin.
Manufacturers outsource all types of production needs. For example, some companies need coil coating for pre-painted metal to prevent the corrosion that occurs from post-painting. It’s the most cost-effective way to pre-paint aluminum and steel substrates, but not all manufacturers have the time, money, or space to run this process. The solution is to outsource to a third-party, either domestically or internationally, depending on the parts that need to be coated.
Other ways manufacturers outsource is by hiring teams of people to pre-assemble parts that are then used to make final products. If much of the assembly process can be done cheaply, the cost to ship the parts back to the manufacturer isn’t an issue.
Predictive maintenance
Manufacturers rely on equipment to perform appropriately and any kind of failure or malfunction can have a detrimental impact on the business. For example, sometimes this leads to legal liability, higher costs, reputational damage, poor end products, and bad customer experiences.
When machines and equipment fail without warning, it can cause a massive disruption to a company’s operations. Unexpected failures often require expensive repairs that force companies to pause operations. If the equipment can be replaced quickly, downtime can be avoided. However, some pieces of equipment cost tens of thousands of dollars and companies don’t have spares lying around.
For each minute, hour, and day a machine is down, the company will lose productivity and profits. One solution is to implement predictive maintenance.
Predictive maintenance is a proactive condition-based monitoring solution that uses sensors and data analytics to identify mechanical failures before they become a major problem. With this system in place, early signs of failure are noted, and thanks to machine learning, potential failures can be predicted.
The main benefits of predictive maintenance are more equipment uptime, reduced maintenance costs, higher customer satisfaction, and ultimately, higher profits.
Automation
You’ll find automation in just about every industry, but it’s a necessity to maintain productivity in manufacturing. For example, robots can do many things humans can’t do, and they make certain processes safer, including tasks human workers can’t perform.
Automating key processes allows manufacturers to gain productive hours, reduce costs, and increase efficiency and speed. It streamlines repetitive and hazardous tasks, and can be used for just about any application.
In today’s marketplace, most companies rely on the Just-In-Time (JIT) principle, which has eliminated the need to stockpile massive amounts of parts or inventory. Instead, necessary components and products are created continuously, as needed, and this creates a steady flow of goods while allowing costs to be more transparent. Automation makes JIT successful. Human beings could never keep up with these demands.
For companies that prefer to keep operations in house, automation helps by reducing lead times seen with outsourcing. It also increases production output since robots don’t need breaks, don’t get tired or sick, and can work unsupervised. Robots work faster than people, and it doesn’t take long for a company to recover the costs of implementing automation.
Streamlining operations
Increasing operational efficiency requires streamlining operations and eliminating wasted resources and redundant processes. This is done through inventory management, along with managing resource utilization.
Inefficient workflows are often a place where companies get stuck wasting resources. To fix this issue, many manufacturing companies analyze workflows and experiment with changes to see where they can make the biggest impact. Often, training helps in this area.
Workflows are often the result of a person’s training. If they don’t know how things should be done, they’ll do it their own way. Employees have a major impact on a company’s production efficiency and product quality, so training is absolutely essential.
When it comes to ordering raw materials, companies do best when their needs are predictable and supplies are available when needed. Sometimes it’s necessary to switch suppliers or order a larger quantity of items that get used more often.
Increasing operational efficiency is multi-faceted
Things like automation, outsourcing, and predictive maintenance are essential to operational efficiency. However, the points outlined in this article are just some of the methods manufacturing companies use to increase efficiency. Although there are many overlaps, there are also strategies specific to each industry.
Manufacturing can be a profitable industry, provided the company maintains efficiency by implementing the right systems and spends less time and money on things that slow the company down.
