Top 3 Challenges Faced by a Manufacturer

Win over these 3 Manufacturing challenges successfully

According to CEIC Data, there are more than 264,504 factories in India; just imagine the competition! Surveys have been done, and we got to find out about 3 challenges faced by manufacturers in the manufacturing industry.

Since you are here, that means you want to be the market leader. So, without wasting your time, let’s just dive into the problem and find the potential solution. There are three major challenges that almost every manufacturer faces, but not anymore:

1.?????Management of raw material

The basic necessity of production is raw material. So, raw material management is extremely crucial for every manufacturer. It can save you a lot of bucks, can minimize resource wastage and attain maximum efficiency.

What’s the problem that manufactures face while managing raw materials?

The problems which manufactures could face while managing raw materials are:-

• Purchasing more than required, which may result in capital blockage and storage challenges.
• Purchasing less than required, which can disrupt production and result in inefficiency.
• Raw-material tracking, Materials may be stored in multiple locations inside the same warehouse or in different warehouses, and keeping track of them can be difficult, resulting in increased costs, wastage, damage, or theft.

Here’s what you can do to curb the problem:-

• You can maintain a proper record of your inventory by accurately recording the movement of raw material: how much is purchased, what and how much is utilized when and where, and how much is stored. Doing so will give you adequate control over your inventory.?
• You can use the Just-in-Time strategy to reduce inventory storage costs while increasing inventory turnover rate. It is a system in which materials and parts required for production are delivered "just in time" before they are used at the factory. Many companies use this "just in time" approach. For example, at Toyota, they don't store production parts in bulk. Once a client has placed an order with them, only then do they buy production parts and manufacture cars.

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2.?????Production downtime

Every minute a manufacturer's machine is not operational, revenue is lost. We can't afford to loose money just like that. So, we need to be mindful of downtime in manufacturing.

What is Production Downtime?

Production Downtime refers to any period of time when machine output is stopped. Downtime can occur for various reasons, like cleaning, tool changes, early shutdowns, and personal breaks.

Now, this production downtime can be both planned and unplanned. If it’s a planned downtime, then it’s harmless and, in fact, good for the factory. These are for scheduled maintenance or budgeted stops. If the production downtime is unplanned, it’s a red flag. An unplanned downtime results in inefficient production and has a detrimental influence on revenue generation and customer loyalty. Usually, unplanned downtime occurs when the machine that is scheduled to be in operation unexpectedly breaks down or, if that's the case, we run short of raw materials.

We can get rid of unwanted production downtime by-

• Conducting regular audits.
• Set up regular maintenance schedule.
• Update your systems, before it gets too late.
• Use inventory management system.

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3.?????Increased Competition

We are surrounded by fierce competition all the time. Our competitor is always looking for an opportunity to beat us. To be the market leader, the thumb rule is adapting to the rapidly changing environment and being consistent in providing clients with cutting-edge goods and services. The best possible way of making this happen is through demand forecasting.

But what exactly is demand forecasting?

Demand forecasting is a strategy you can use to predict what the future demand for your product or service will be. It is a critical operational ingredient in the manufacturing industry because it enables managers to conduct demand planning in order to ensure that product inventory does not drastically exceed expected demand or run out of stock. Demand forecasting solutions help manufacturing companies fulfill their goals by lowering operational costs while meeting consumer demand.

How to perform demand forecasting?

• Based on the current demand, a manufacturing business can predict which of its products are expected to be purchased in future and in what capacity. But, it is only applicable for a very short span of time.
• Based on the data from the past seasons, you can project sales in the future.
• If your business is in a growth phase try out doing market research, marketing campaigns.
• You can also take opinion of experts, employees, or conduct a consumer research.

These were the top 3 challenges a manufacture faces with problem solvers. I Hope that you will encounter these manufacturing challenges successfully.