Manufacturing for Today

Manufacturing today….and looking at tomorrow.

2020 started with a robust and growing economy.  Unfortunately, that changed quickly in March with a worldwide pandemic that affected all of us.  Labor markets, resources, supply chains, and the basics of supply and demand all changed.  Faced with the challenges of having to change operations to produce either different products, or make changes because of supply chain disruptions have impacted the bottom line.  Just in time (JIT) inventory turned into just in time….or late (JITL), and optimum inventory levels became a thing of the past.  Demand shifted and many companies could not respond.  Let’s take a quick look at somethings that drive manufacturing now and some thoughts about the future.

  • Technology will play a bigger role in a company’s success whether investing in a comprehensive ERP application or equipment such as hand scanners, an automated piece of equipment, or even some robotics.  The equipment helps ensure quality and consistency.  The software helps collect and control information in real-time allowing you to identify and adjust processes quickly. After all, knowledge is power, and having accurate information in real-time is priceless.  Now, this does come with a cost- not only financial but time and resources.  Just purchasing software or equipment won’t solve anything by itself.  You need the ‘buy-in’ and commitment within the organization to make any change work, and change is hard for most of us.   This starts and needs to come from top management and that support can pay big dividends.  There also needs to be a balance between what makes sense to implement today, and what makes sense for tomorrow.  Integrated technologies that allow growth can keep costs down now and position the organization for the changes and challenges in the future.
  • Inventories, product movement and inventory turns impact margins and inventory is the lifeblood of any manufacturing company. ‘Offshoring’ created opportunities in the past for businesses to bring in material and components sometimes at a lower cost than obtaining them domestically helping to manage and control the costs of inventories.   However, when supply chains get disrupted and/or foreign labor cost increases and/or freight charges taxes, and tariffs increase  ‘Offshoring’ now might not make sense any longer.  It could be time to reevaluate the costs creating your inventory.    Is now the time to ‘Onshore’?  With automation and technology playing a bigger factor in the creation and management of inventories, price points and quality have vastly improved.    Implementing new processes to manage inventories could shorten lead times and reduce your transportation costs.  These types of solutions might be best managed in your own backyard.
  • While technology, automation and inventory controls are big factors for success today and tomorrow, the core and most important resource is your workforce. After all, you’re only as good as the people around you.  Now more than ever it is essential to attract and keep good team members (aka employees).  Labor markets are evolving and manufacturing jobs in the future are expanding.  Empowering your employees with technology and automation increases skills and productivity.  As manufacturing expands the skills needed could become more complex so it’s imperative to train, hire and retain motivated individuals.  Investing in quality people will always produce positive rewards.

While we’re still in the middle of the current storm, one good thing that has come out of this point in time is that it has brought to light our strengths and unfortunately in some cases our weaknesses.  Technologies help an organization gain flexibility and quicker responsiveness when unforeseen challenges emerge.  So, as we are weathering this storm, and hopefully turning the corner, let’s recompose and position for that next challenge. Let’s all emerge from this point in time better than we started.   One thing is always certain….change.

LBSi offers SAP® Business One sales and services.  We sell, install, implement, train and support our customers for this software solution. For over 30 years, our team has helped clients determine and implement solutions to their problems to maximize potential profit and success. We look forward to the opportunity to get to know you.