How optimisation of processes in manufacturing increases profitability
It’s not surprising that manufacturers are constantly seeking out new ways to improve optimisation and profitability. However, with greater external pressures on business than ever before, the race is on to find small changes that add up to big savings.
Rather than cutting costs in a way that could actually harm your business long term, we believe process optimisation should be your first port of call – and that small improvements to processes can add up to big improvements in profitability.
Here are just some of the ways that the optimisation of processes within manufacturing can increase profitability.
Assess business workflows
Before you can tweak and optimise your processes you’ll need to spend time planning and getting to know what areas are ripe for improvement or generating waste.
You can assess you workflows in three ways: personnel, processes and technology.
When it comes to personnel, you want to ensure the right people are equipped with the correct skills and have been given clear objectives. You’d be surprised how much can be achieved by reassessing or better articulating goals.
Processes should be mapped and re-mapped to cut out waste. Try to find out where the bottlenecks occur and focus your attention on the problem areas.
Finally, by improving your technology, increasing investment and focusing on better training, you can make your money go further than ever before, automating processes, collecting data and boosting profits at the same time. Tech changes quickly, so you’ll want to check you have the most up-to-date equipment. Investing in modern technologies can secure big profits in the medium to long-term.
Update your processes and technologies
Now that you’ve thoroughly mapped your processes and worked out areas for improvement, you’ll want to pay special attention to updating them.
Think hard about where processes can be automated to save time. Are you stock levels updated manually? Automating your inventory management could ensure stock levels never run low while preventing excess stock from tying up working capital on your shelves.
Maybe you want to automate areas of finance so that purchase orders are generated immediately, saving admin time and freeing up staff to do work elsewhere. There are no limits to what you can do with some imaginative problem solving and investment.
Adjust stock levels for optimisation and profitability
Stock levels can be too low, leading to problems with fulfilling orders and deliveries running late. This can lead to bad relationships with customers and will lose you business.
One the other hand, stock being too high reduces your working capital and can reduce value if the items stay on the shelves for too long.
Using analytics is one way to predict problems and resolve them before they occur.
Make continuous improvement your primary objective
It’s one thing assessing your business processes and optimising once every 5 years. It’s another thing adopting a strategy of continuous improvement.
That, however, is what the best-in-class manufacturers do.
To ensure continued growth, you’ll need to continuously improve by optimising processes and reducing waste.
Every day, new methods are becoming available to business leaders and new investable technologies become available.
If you fail to keep up, expect to be left behind in an increasingly volatile market.
To keep on improving, why not gather suggestions from around the team? Make sure you implement the best suggestions and continue to monitor and learn from what you’ve already achieved.
Did you find this useful? Get in touch with a CBO consultant to discuss further ways to optimise your business processes today.