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15Jan

How to Solve Biggest Problems in Small Scale Manufacturing Business?

Every manufacturing business- be it small, medium or large face some common operational concerns. But there remain some challenges which are unique to a scale of business. As a result, a small scale manufacturer may come across some operational issues which a large scale manufacturer may not be bothered about.

This blog enumerates one such set of challenges faced by small-scale businesses with possible solutions:

Overproduction

Production and productivity top the list of concerns for most of the companies. And, while the businesses strive for enhanced productivity, on one hand, it struggles to curtail overproduction on another.

A situation of overproduction leads to higher inventory levels along with longer lead times, oversized batches and higher working capital requirement. Hence, it becomes crucial to control it.

Overproduction commonly occurs when you anticipate some orders or even when you try to optimize productivity. To avoid such an occurrence, create operational plans periodically and anticipate demand precisely.

Map production activities completely with sales orders, employ pull system (a lean manufacturing strategy) to reduce waste and manufacture goods in smaller batches to curtail excess production. Implementing such practices requires an immaculately developed software which helps you do supply chain planning to manage, control operations without overproducing it.

Long Waiting

It is tempting to you, being an owner to manage all or most of operations alone. But this can leave you and your business unorganized. An unplanned disruption in workflow, while waiting for your instruction or an unattended break down can all result is major resource wastages in the long run.

To tackle this, strategically delegate the deliverables. Identify elements that be managed meticulously by another resource. Consider investing in automation of business functions by installing an ERP system. An ERP software like SAP Business One can manage most of the business operations professionally and save you from persistent botheration of manning operational concerns.

Excessive Movement

Long supply chains and movement of goods to farther distance leads to the unnecessary transportation of goods which adds cost and time. Resolving this requires paying close attention to every business process, along with lead time and cost involved. And, computing the lead time against the total production time to identify gaps.

Having an ERP system at your disposal lets you identify the lead time and plan accordingly. Work out to minimize transportation. Source raw material closer to the factory, analyze each movement and bring closer all functional areas, design or seek professional assistance to plan a value stream map for an optimal plant layout.

Inappropriate processing or Overprocessing

Keeping a tab on nitty-gritty as a business owner is indeed a quite demanding job. Being on top of work, planning and strategic decision making take so much time that you or your manager may miss shop floor processes to the core sometimes. As a result, over processing can occur. For instance, implementing Standard Operation Procedures to the core despite specific customer requirements can lead to over processing, impacting cost and time adversely.

To overcome this, either assess or ask your manager to assess if there’s any operation which can be altered is unnecessary? Scrutinize Sales Orders before generating and production orders. Visit shop floor processes periodically to maintain a vigil.

Defective products

No manufacturing business is perfect. Most business operations generate defective goods in varying shapes and sizes on account of various reasons. In all, defects remain a concern for all the sectors and scales of business.

Typically, defects can occur due to non-standard operations, inferior quality of raw materials, ill-maintained equipment or lack of trained shop floor staff.

But, the issue is how can you minimize it all?

A great way to check such an issue is to pump up Quality Control (QC) or Inspection processes. You can carry inspection at stages like: on receipt of raw material, during the production process, before dispatching of finished goods and on an ad-hoc basis.

Implementing a thoroughly planned QC processes can help you check defective counts significantly. Apart from this conduct a root-cause analysis to assess the reason behind. Draw a schematic QC plan to ensure minimal defects in products.

Conclusion

Overcoming day-to-day operational challenges can be taxing if you fail to recognize the quantum of each issue in the long run. Aforethought with a clear vision can go long way in resolving these and help you attain your business goals.

Here’s a summarized list of key steps that you can consider to counter mentioned challenges:

  • Delegate tasks, hire a dependable workforce to ensure you can plan strategically for your business.
  • Use an ERP software to manage day-to-day business operations, access reports and analyse issues better. With accurate data, you have accurate control.
  • Cut your business running costs with thoughtfully chalked business plans to cut overheads, over processing of goods and working capital requirements with better inventory management.
  • Implement lean manufacturing principles for continuous improvement.

Download eBook on 5 Key Roles of an ERP in Small and Midsized Manufacturing Businesses if you wish to learn more about the core features of an ERP solution and how it can help your manufacturing business with its functions