News  19 July 2021

Top 4 manufacturing challenges and how to overcome them

Like most industries, manufacturers have suffered significant challenges in the past year because of the coronavirus pandemic and Britain leaving the EU. There was considerable operational and supply chain disruption, but this also created opportunities for positive change. Manufacturers are now becoming increasingly optimistic, with businesses expecting to increase capital expenditure on buildings, plant and machinery, product and process innovation, and training in the next year (CBI, 2021).

Manufacturing challenges

So, what are the main challenges facing manufacturers as we move forward?

1. Increasing competition

With record numbers of new company incorporations and manufacturers diversifying their offerings recently, the market may be even more competitive than it was pre-pandemic! Increasing competition leads to price pressures, where manufacturers are forced to reduce costs (or profit margins) to ensure their pricing strategy remains competitive. Competition also impacts turnaround times, as the need to quickly respond to customer demands intensifies.

These challenges are difficult to solve if you’re relying on manual workflows and disparate systems to manage your processes. It can be extremely challenging to identify areas of improvement and make quick decisions without easy access to real-time data.

The good news is that today’s business management solutions streamline and accelerate manufacturing operations—from procurement and scheduling to shop floor, inventory, sales, and financials.

2. Limited visibility across complex supply chains

Supply disruptions have a significant impact on productivity. The lack of a single part could derail an entire assembly-line production flow and consequently impact customer satisfaction if deadlines aren’t met.

With manufacturers holding limited stock to be as lean as possible, the need for robust supply chains becomes even more critical.

The key to resilient and flexible supply chains is end-to-end visibility, but 21% of supply chain professionals say that visibility is their biggest organisational challenge (Statista, 2019).

Many manufacturers have identified technology as the key to increase visibility and overcome future supply chain challenges. It allows businesses to minimise the risks of late supplier deliveries, inventory shortages or outages, missed or late deliveries to customers and increased inbound supplier lead times.

3. Rapidly changing industry conditions

Even before the pandemic, manufacturers had to deal with frequent changes. Weather-based demand, skills shortages, demand for personalisation and technology advancements are just a few of the obstacles manufacturers needed to navigate. Now, add on to that quarantining, restricted travel options, closing schools, disrupting supply chains, etc. and suddenly flexibility and agility has become a necessity.

Ask yourself, how quickly can your employees respond to customer or vendor issues? Do they have all the information they need to make smart, timely decisions that affect your bottom line or are they stuck with time-consuming workarounds? Do you have systems in place to forecast demand and act immediately if something changes?

Flexibility is about speed to adapt. The right business systems create a seamless flow from need to delivery, decision to implementation, and challenge to solution. If your business management software doesn’t allow for this real-time flow of information you will struggle when industry conditions inevitably change.

4. Increased compliance and regulatory requirements

As well as market changes, the manufacturing industry also has to contend with new regulations and compliance procedures. Navigating this maze of laws and restrictions can be a huge challenge, and failure to comply can be extremely costly in financial and reputational terms. In the UK, 62% of process manufacturers said regulatory change is one of the biggest external factors impacting their business (Sage, 2019).

Adhering to changing regulations can be an onerous task if you don’t have appropriate systems and processes in place. Modern business management solutions will automate and standardise those processes to ensure compliance, and they’ll also provide audit trails for traceability, documentation and reporting purposes.

While these challenges can be daunting, there’s good news. By embracing technology and implementing the right business management solution for your business you’ll be in a better position to increase flexibility and responsiveness, make faster decisions using business intelligence, accelerate growth and revenue, and continue to deliver innovative and high-quality goods.

Is there an answer?

Manufacturing is a complex industry with equally intricate challenges. As your business grows, it becomes even more critical that your processes and systems are as efficient and easy to manage as possible to retain your competitive advantage. The past few years have shown us that manufacturers need to be positioned to adapt and the best way to do this is through technology and using your data intelligently.

Did you know 95% of manufacturers improved business processes because of their ERP system?

If you’re wondering how a different system could benefit your manufacturing operations and increase productivity, there are lots of options to choose from. It’s not about which system is best in the market; it’s about which system is best for you.

We’ve created this interactive guide for manufacturers to take you through the selection process and help you make the right decision for your company.

Download my free guide

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