Lessons business can learn from manufacturers

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At the core of business improvement is how you can do more with, and get the most from, existing resources. Manufacturers do this well because their approach focuses on maximising output in the most efficient way possible. Here are some common sense concepts, transferrable to any company, used by manufacturers to constantly and successfully improve their business.

The manufacturing industry is responsible for most of the consumables we use in everyday life. These consumables undergo a manufacturing process that is aimed at ultimate efficiency – specifically geared towards delivering cost, flexibility, quality and/or time benefits to the customer. It has only been recently that non-manufacturing businesses have caught on to the way manufacturers approach their businesses, realising the valuable lessons that can be learned from this logical, but relatively easy approach. 

Manufacturers look at their businesses as a series of processes, which is not only exclusive to the assembly line, but to other processes such as finance, marketing and HR. Manufacturers are very good at examining these processes and identifying areas for improvement, usually through skills, systems or technology solutions.

Skills 
This is not only about the qualifications required to do a job, but the skills that are required to deliver value to the customer. Problem-solving, staff management and leadership are skills that are critical to ensuring efficiency in a manufacturing setting. 

Systems 
Systems are the convergence of skills and technology to ensure a process is repeatable and geared towards high productivity. 

Technology 
How a company sources and uses technology can contribute greatly to a competitive advantage, reducing labour costs, increasing output and improving high-end skills development.

Manufacturers typically use two proven approaches for process improvement. These are a constraints-based analysis and a waste reduction approach.

Manufacturers use a constraints-based analysis to search for the main constraints hindering process efficiency within the business. It is based on the notion that a process can only move as fast as its slowest constraint. This approach sometimes requires a shift in thinking because the initial instinct is often to ‘break’ the constraint by adding resources, when the issue may be that the constraint is not actually operating at optimum efficiency because of the activities before or after the constraint. This approach is good for teamwork as it encourages teams to work together to identify how a process can be improved and empowers those involved to continue to improve the process.

Another way a manufacturer looks at their business is in terms of waste. Many non-manufacturers would only look at waste in the context of what gets thrown away, but manufacturers also consider waste in terms of lost time, effort, cash flow and opportunity. You can minimise or eliminate waste by educating employees about what to look for – do a relatively simple Waste Hunt – and potentially use technology to put a lean system solution in place. Once again – a combination of skills, systems and technologies solutions are the core elements to achieving a solution.

Any company that implements such improvements successfully will soon start to see a competitive advantage emerge because the internal machinery within the business is running more smoothly. While these three elements are important, there are two additional elements that will grow the business – networking and opportunities – and are activities external to the organisation.

By our definition, networking is more than attending business events. Networking is the broadening of relationships and collaboration activities to look at ways in which you can offer more value to customers. In terms of what a manufacturer would regard as networking, this may be through partnering with researchers, better supply chain relationships, or working with others to identify niche product offerings. Remember, the ultimate goal is to offer something that your customer values.

Opportunities and networking leverage each other. Opportunities are usually generated through the act of networking which then generates further networking and collaborative relationships.

Additionally, the opportunity and networking process is vital in checking the pulse for where your industry is headed in the future. If you have not done it already, get a profile on Linkedin and start interacting with others through groups or sharing information. It is the best starting point for anyone wanting to connect with others professionally. Chambers of commerce generally provide good networking forums too. Successful manufacturers are very open to collaborating with other companies on opportunities that complement their capabilities.

We see this when manufacturers team up to bid on specific projects. Project owners look at this favourably too because it demonstrates that the participants can, and are, willing to work with others. Another successful example is when groups of companies come together to solve a particular problem that affects all within the industry. The ‘cluster’ approach has the benefits of driving innovation, encouraging new business opportunities and increasing productivity of those participating in the cluster. Above all, the networking and opportunity elements should be introducing the company to new relationships and new possibilities for growing the business.

By adopting a manufacturer’s approach and implementing these five elements, businesses are able to gear themselves better for growth and in doing so, are less affected by forces out of their control. For example, many struggling businesses often look to government support or hope for an upswing in the economy as the stimulus to improving their business and it is these businesses that will continue to struggle.

Those that spend time working on the five core elements are ones that will develop a viable business in the long-term.


Steve Bryant

Steve Bryant

Industry leadership at QMI Solutions

With over 14 years' experience in industry advocacy and in diffusing technologies and best practice to industry, Steve is dedicated to helping SMEs adopt the key elements of global competitiveness to benefit enterprises and the broader economy.


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Phil Khor

Phil Khor , Founder at SavvySME

Good read, interesting angle. I think in startups, we talk a lot about reducing waste, but we don't discuss often enough (imho) about constraints-based analysis. Starting a business is hard with limited funds and resources, but often we're our own worst enemy when we get carried away with something we're so passionate about. This is where I think constraints-based analysis can help add a healthy dose of reality check. There is often a gulf between what we want to achieve vs what we CAN physically achieve with limited resources. The sooner we realise this, the sooner we get seriously creative about how we do more with less. The other point you made about 'cluster' approach is so important. Frankly, I believe the cluster / collaborative approach is the ONLY way for us to be competitive and successful in business these days, especially smaller businesses. This is one of the core values we uphold on this site. Thanks for sharing. Awesome article.

Steve Bryant

Steve Bryant , Industry leadership at QMI Solutions

Thanks Phil. Manufacturers (the successful ones) also have this knack of applying innovation within the workplace rather than conducting it as a discrete activity. I have seen examples where once a problem with a product is recognised, they will dedicate resources within the business to come up with a solution, so innovation is seen as practical, tangible and not a nebulous concept. Perhaps the topic of another article?

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