7 Common Manufacturing Challenges & How to Overcome Them

The manufacturing industry is poised for growth, leveraging software to streamline operations despite challenges. By converting raw materials into finished goods, manufacturers boost product value and competitiveness, aided by advanced technology.

Technological advancements, like manufacturing systems, drive industry progress but also present internal challenges. Addressing these issues is crucial for maintaining productivity and ensuring sustainable growth in a competitive market.

This article explores seven common manufacturing challenges and their solutions, helping manufacturers optimize operations. Understanding these issues allows for effective strategies that enhance efficiency and drive success.

Consider Hash Manufacturing Software for real-time tracking, production scheduling, and inventory management. These features boost operational efficiency, reduce costs, and improve decision-making, keeping manufacturers competitive.

1. Forecasting Demand for Products

Today, there are still many manufacturers who have difficulty forecasting future demand. The main problem is that they do not have advanced reporting tools that allow them to estimate how many items they should sell in the next few months or the following year. As a result, their products fail to meet customer demand and they suffer lower sales.

The solutions:

To be able to forecast customer demand the right way, manufacturers should use accurate reporting tools that can make it easier for them to target sales and estimate how many and which items they should produce in the future.

HashMicro’s Sales Management System can help manufacturers analyze consumer behavior; which products they are interested in, when they usually make purchases, how many products they buy at certain times, etc. Inventory Software can help them identify their fast-moving and slow-moving products.

In addition to utilizing software to make accurate forecasts, manufacturers also need to consider external events. For instance, currency exchange rates, rising fuel prices, current market trends, and so on. Make sure the sales and marketing teams are always up-to-date on these matters.

2. Controlling Inventory

Inventory management is still one of the main challenges in the manufacturing industry, but thanks to the help of automated solutions, it has become much simpler. Nevertheless, there are still many manufacturers, especially the small ones, who still manage their inventory manually.

Inventory tracking is a time-consuming process that can be streamlined with the help of software. Checking stock manually is very inefficient and prone to errors that can lead to inaccuracies, shortages, and overstock, as well as unidentified damages.

The Solutions:

To avoid unnecessary purchases of raw materials and equipment that lead to customer dissatisfaction, effective inventory management strategies are essential.

Firstly, routine inventory audits, including both physical and cycle counts, are necessary to identify discrepancies between recorded numbers and actual stock. Barcode scanners can significantly expedite this tracking process.

Additionally, inventory managers must ensure sufficient raw materials for production and that finished goods are ready for delivery to end users. This task is simplified with inventory management software, which allows managers to monitor inventory levels continuously, receive alerts when stock approaches the minimum threshold, and reorder the right items at the right time.

Moreover, inventory management software can integrate with barcode scanners to streamline inventory tracking and with other systems like purchasing and accounting. Small-scale manufacturing businesses need not worry about the investment cost, as affordable cloud solutions are available.

3. Improving Efficiency at Manufacturing Plants

Up until now, manufacturers have been looking for effective ways to reduce costs and improve efficiency at their plants. Some companies and factories use manufacturing time-tracking software to track and make production more efficient.

Also, many of them choose to sacrifice the quality of their products to reduce their production costs, but this will only reduce their profitability because dissatisfied customers will stop buying from them.

The solutions:

One of the most effective ways to optimize efficiency at manufacturing plants is to modernize the processes and systematize the workflows. Manufacturers need to minimize time-consuming and labor-intensive tasks, reduce material waste, optimize the use of equipment by minimizing damage, as well as simplify their supply chains.

Enterprise Resource Planning (ERP) systems, including manufacturing resource planning, can facilitate all of them, thus enabling manufacturers to achieve optimal efficiency.

Also Read: 7 Ways to Improve Efficiency at Your Manufacturing Plant

4. Increasing ROI

Any manufacturer would want to be able to increase its ROI. They would usually increase their sales or the price of their products. However, these aren’t effective ways, especially when economic conditions are erratic, reducing consumer purchasing power.

The solutions:

There are several ways to increase ROI such as:

1. Increase sales the right way

First, manufacturers should be able to clearly define their returns, since they can include higher sales, increased revenue, greater profits, reduced overhead or production costs, higher employee retention, and better customer satisfaction.

Then, they need to set multiple benchmarks for their return goals. For example, instead of setting increased sales as a goal, they can increase sales during certain months in particular territories.

2. Update marketing strategies

Manufacturers can also change their marketing strategies by utilizing digital marketing because the costs are cheaper than conventional methods (including placing advertisements on TV, newspapers, or billboards).

This can be done by optimizing their website content, posting advertisements through search engines and social media, and personalizing email marketing campaigns. Furthermore, all these can now be automated by using marketing automation software.

3. Reduce costs

Manufacturers can reduce production costs by changing the design of packaging materials without having to sacrifice the quality of their products and negotiate with suppliers to get discounted prices.

With the help of ERP software, manufacturers can not only reduce production costs, but also save labor costs, control the cost of procurement, and allocate costs appropriately.

5. Skilled Labor Shortage

Although automation and robotics can help fill the labor gap, human capabilities will still be needed to analyze and solve problems as well as manage outputs. With the baby boomer generation entering retirement, the manufacturing industry is facing a looming labor shortage. This is one of the biggest threats facing the manufacturing sector today.

The solutions:

To overcome the shortage of qualified workforce, manufacturers must be creative in recruiting employees by relying on various online platforms to post job openings. Producers must be truly selective when choosing prospective employees and ensure that they are able to work quickly, on target, under pressure, and do not object to shift work schedules.

In addition, manufacturers must be able to provide their new and existing employees with regular training to help increase their potential. Manufacturers need to consider using competency management software to bridge their workforce skill gaps.

6. Managing Sales Leads

Another challenge often faced by manufacturers is managing and prioritizing sales leads. Many of them treat their leads in the same way, but this isn’t the right method. Every sales lead has different characters, preferences, and needs.

Therefore, manufacturers should treat them specifically. Manufacturers also often find it difficult to identify potential leads so they often focus on unpromising opportunities and forget to follow up with high-potential leads.

The solutions:

Manufacturers must truly understand their sales leads. In order to understand that, they need to dig deeper into their information. Manufacturers must have a system that makes it easy for them to keep, manage, and track prospect information.

The CRM system can help manufacturers understand their sales leads better through a centralized customer database, making it easier for them to identify qualified prospects so they can focus on the best opportunities, and acknowledge the status of sales leads in real time without having to ask the sales team, as well as distribute leads to the right salespeople.

7. Coping with New Technological Advances

In reality, every year, there are always new technologies on the horizon, which include the IoT, robotics, and manufacturing software. In the end, manufacturers are left with a lot of decisions that overwhelm them; Which ones do I should invest in? Will implementing this technology be a good decision for my manufacturing business?

Conclusion

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