Manufacturing Challenges 2023

SEWN is always looking at the trends, changes, and challenges faced by manufacturing companies. Here's our brief look at some of the challenges we're seeing for 2023. If your company is facing these or other challenges in the new year, chat with one of our Directors for a free consultation.

Demand Forecasting is a must for your manufacturing business

Global competition, faster product development and unprecedented product proliferation have benefited the consumer greatly; however, manufacturers are still struggling to predict which of their goods will sell and plan production accordingly.

Inaccurate forecasting can result in unwanted goods which must be marked down or sold at a loss. The current labor shortage coupled with supply chain disruptions compounds this problem, by requiring the manufacturer to operate in an environment where predictive modeling becomes increasingly difficult.

Accurate response is a new approach to the entire forecasting, planning and production process. This approach incorporates what forecasters cannot predict well and allows that uncertainty to be considered by managers, postponing some decisions until they have some market, supply chain and workforce signals to help correctly match supply with demand. Additionally, this approach considers missed sales opportunities and distinguishes products for which demand is predictable and products for which demand is uncertain. It does this by blending historical data and expert judgment.

Products in the relatively predictable category should be made furthest in advance, reserving the more flexible manufacturing capacity for shorter runs of less predictable products.

With the assistance of proper technology, a model can be developed to incorporate the predicted sales, actual sales, disruptions in the supply chain, and costs of stock-outs and markdowns. In addition, the chosen system must track forecasting errors. Above all, it is important to develop a model rooted in probabilistic demand- market uncertainty is a manageable risk!

Labor shortage in manufacturing causes and solutions

In addition to COVID-19, the “great retirement” of baby boomers has caused labor shortages across the manufacturing industry. According to The Manufacturing Institute and Deloitte Consulting LLP, 22% of the workers in manufacturing will be retiring in the next 10 years. Also, many younger workers have migrated to industries like technology and healthcare due in part to the negative industry perception of dirty, hot, laborious working conditions.

All the while, manufacturing has evolved to harness more state-of-the-art technology, such as co-bots that work alongside human workers, increasing productivity and safety. This transformation has helped industry, but manufacturing workers on factory floors and offices alike need higher levels of education and new skills. This significantly raises the barriers to entry for those without this training or preparation.

Solutions

Women represent half of the U.S. workforce but only hold 33% of manufacturing jobs. To broaden the labor pool, manufacturer must look to creative ways to increase hiring and retention of women by offering flexible schedules (if possible), improving workplaces and processes to boost employee engagement and satisfaction, including offering retraining and advancement opportunities.

Robust diversity, equality, and inclusion (DEI) initiatives can broaden the range of talent available while reengaging those who have dropped out of the work force during the pandemic.

Building partnerships with local vocational schools and educational institutions can help attract younger talent and build a pipeline of skilled workers for the future.

Widening your hiring footprint for jobs that can be performed remotely can attract workers from across the nation - or even the globe.

A clean, state-of-the art working environment can go a long way in attracting, recruiting, and retaining top talent. Due to the pandemic, manufacturers have a heightened sense of the importance of a healthy work environment, by realizing an outbreak of illness could threaten their already limited work forces and stop production.

Upgrading HVAC systems, air flow and filters are ways to minimize the risk of infection and support a healthy work environment. Additionally, numerous studies have consistently demonstrated factors such as workplace design, indoor temperature and other amenities have a significant impact on perceptions, behavior, and productivity of employees.

Noise is one of the leading causes of employees’ distraction, leading to reduced productivity, serious inaccuracies, and increased job-related stress. Exposure to high levels of sound may lead to cardiovascular disease, endocrine and digestive reactions, especially in complex jobs.

A poor lighting system can reduce an employee’s performance as well as efficiency, often resulting in fatigue or eyestrain.

Job stress related to ergonomics in the workplace. By improving floor plans, workers can easily access needed tools and devices, work at proper heights, resulting in good postures to minimize fatigue.

Proper technology is an essential component of a healthy working environment. By automating repetitive tasks, like loading and lifting, not only is the risk of injuries and errors reduced, but workers are able to engage in more stimulating and strategic tasks,

Tracking Inventory and Sales Safely using Technology

Even the smallest manufactures can benefit from automating inventory and sales lead management. The use of appropriate software can not only save time but can reduce errors and omissions. These software solutions can package the information in a form that can be easily accessed, manipulated, and put to proper use.

Inventory management remains one of the most critical challenges faced by the manufacturing industry. Companies that excel at inventory management can drive the maximum amount of profit and customer satisfaction. Due to the plethora of automated solutions currently on the market, even small manufacturers can migrate away from handling their inventories manually.

Solutions

The value of real time inventory management system will be maximized once it is integrated on a single platform including finance, planning, logistics, operations, and sales allowing sharing of real -time information to all departments of the organization.

Not only will integration benefit the internal teams of the organization, once the business can effectively integrate back-end systems and communicate directly with its partners, supply chain transparency will be enhanced.

However, combining all these important functions on one platform can create a significant security risk. An ERP (Enterprise Resource Planning) system is literally the operating system for the company without which the company simply could not function. The US Department of Homeland Security has issued multiple warnings against cyber-attacks targeting ERP systems. Although ERP vendors have invested in hardening and protecting their systems, it is important your organization identify your most important information, create a road map to identify all interfaces with the system, monitor back-up by running ransomware detection checks and consider moving your ERP to the cloud.

Centralizing inventory, sales, and other essential functions of your business into a shared database will increase productivity, collaboration, and efficiency, however protecting this data is critical.