6 Brutal Questions That Leave Small Manufacturers Exhausted

The manufacturing sector is going through a deeply challenging period. Here are six questions arising in the day-to-day operations of modern small manufacturers that leave managers exhausted.

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If you’re anything like the tens of thousands of small manufacturing business owners (or managers) out there, you’re probably facing some difficult times. The marketplace is more competitive than ever. New products and business ideas are springing up left and right. Demand for goods is harder and harder to predict as consumer appetites keep shifting. Supply chain disruptions are forcing hard choices from delays or shortages. And to top it all off, rising interest rates and new regulations are adding to the pile of your day-to-day work challenges.

In this post, we look at the six pain points you may be facing as a small manufacturer. Bear with us, it gets better at the end.

1. Can I meet deadlines for incoming orders? For a small manufacturer or one just starting out, a good business reputation is crucial. You almost need to guarantee that when an order comes in, you can quote an accurate lead time, get the goods shipped on time AND with the right price AND in the right quality! This can be hard when you must deal with rising input costs, overheads, or supplier delays. Your customers expect quality goods delivered on time and they don’t mind looking elsewhere if their needs aren’t met.
2. Are there enough orders coming in? This is a huge concern for many SMEs. Most small companies don’t have a lot of reliable demand lined up for long periods of time. Expanding your marketing efforts and reaching out to new customers sounds much easier than it actually is, especially if you’re dealing with tight profit margins. The reality is that you need to constantly stay on your toes – failing to react to an opportunity might well break the bank.
3. Will purchase orders reach me on time? When it comes to delivery lead times, you are regularly at the mercy of your vendors. Small companies often just can’t afford to pick more expensive suppliers when the go-to guy is coming up empty-handed. Depending on your industry, there may be few good options available. And sadly, constant supply chains disruptions and dwindling raw material availability are becoming the new normal in many markets.
4. How do I plan for the unplannable? Aligning your purchases with manufacturing orders is a hefty task on the best of days. How about when the lead time for those parts you needed yesterday gets quoted at 3 or 6 months, or worse still – 3 TO 6 months? It’s hardly viable to post an out-of-stock sign on your best-selling product. Most clients will begin to look elsewhere. What it comes down to is that you may need to order components with long lead times without any real guarantee that there will even be demand for your goods once the parts arrive.
5. Where is everything? You probably spend at least a few hours of every workweek trying to keep track of all the moving parts in your operation. This is especially the case if your company doesn’t have solid traceability practices in place. If you’re unable to locate tools or components when they’re needed, or don’t get real-time notifications about changes in incoming orders, production schedules can quickly get turned on their heads. Needless to say, this is a huge source of stress and can negatively affect your production rate and your bottom line.
6. Will I turn a profit next year? As everyone knows, small companies are by far the least immune to financial issues due to economic uncertainties. Rising inflation and interest rates, environmental compliance regulations, you name it. These all have an immediate effect on your profitability as they raise the cost of doing business. It’s no overstatement then, that your competitiveness is directly tied to a lot of things you have no direct control over.

To sum up, we know how difficult it can be to navigate the hurdles of the small manufacturer’s business landscape. The good news, though, is that you are not alone. Over 70% of all manufactured goods come from SMEs, and there is strength in numbers. New resources and technologies are bringing constant innovations and affordable solutions to even the smallest companies.

Consider subscribing to our manufacturing blog to gain access to relevant know-how, news, and guides that can be a real help in better managing your day-to-day business processes. We are dedicated to offering you working solutions to real issues and believe that behind every challenge lies an opportunity.

Sincerely, the MRPeasy team