Top 10 Problems Manufacturing Companies Face

August, 2023


With the world's current situation, manufacturing companies face uncertainty and instability. There are many issues that manufacturers could stumble upon, which can be very detrimental to the business and may result in the business's death. In this article, we have outlined the common challenges that manufacturers can encounter as well as the possible answers to guide and assist you in overcoming these hindrances to a successful business. 

1. Shifting Trends

The trends on how consumers and customers spend their money always change. Throughout time, people have evolved how they select and buy the things they need and want. Today, more and more people are becoming aware of the production process of the products. They want ethically created high-quality items. Compared to the previous trend, most people only focus on finding ways to save while purchasing products. Business owners can go to countries where laborers are fast and cheap, but the standard of items is low and not ethically made.

The best way to cope with the shift in trends is to study the market - conduct market research. As an entrepreneur, you should be updated with all movements and drift around the market. In reviewing the market, you will have a lot of information that is essential for the growth of your business, not just the drifting trends. It's like hitting a lot of birds with one stone. 

2. Overwhelming Inventories

Managing inventories has always been a burden for most businesses. It's one of the problems that producing companies face. The challenge here is running a busy business and updating the inventories all at the same time. Most manufacturing companies are overwhelmed by this because keeping track of every stock and everything in the directory while business is ongoing is difficult. If problems in inventories and projects get out of hand, it will immediately and directly impact your prices and market orders.

To beat this overwhelming process, the company should resort to a system that could assist them in managing inventories and projects. Investing in a more technologically advanced assisting software like manufacturing ERP software could save you from the problems in stocks. Manufacturing ERP software can support automating inventory management as well as the projects' timetables that will aid you in maintaining your fulfillment rate. Having software that could lend a hand will enable you to focus on other aspects of the business. 

3. Outdated System

Today, every business and company is using technology for its advancement. The business world has extreme competition. Therefore, everyone should step up their game in every field in the industry. Customers also want the fastest solutions and products that they need. 

Using digital transformation is needed to keep up with every company in implementing digital transformation technologies for developing new capabilities and integrating past affiliated, vital information. Throughout the product development lifecycle, the digital thread connects product design and manufacturing processes to stimulate cooperation and empower teams to make better-informed choices.

4. Inflation

The inflation this year is no joke. It has affected even the raw materials, and of course, we need to consider increasing the workers' salaries. 

Weigh non-invasive design changes to control sourcing costs as costs (and materials) rise. Engineering teams can model product designs using alternative materials and receive alerts if a material substitution produces a DFM risk, like exceeding weight restrictions. Groups compare possibilities and decide future moves. To simulate and assess the nation's production costs, utilize regional cost data, including labor, overhead, and tool-shop rates.

5. Shortage of Skilled Workers

Almost all manufacturing companies experience the insufficiency of skilled laborers. Although there are many factors, in this case, the main reason is that younger generations misinterpret the business while senior professionals retire. In a survey conducted by The Manufacturing Institute and Deloitte Consulting LLP, 22% of the workers in production companies are retiring in the next ten years. 

The companies can correct the misinterpretation of young workers with your initiative to assist and guide them and let them learn to become skilled workers and find opportunities to become a producer. Another solution to this problem is collaborating with schools offering training and guidance programs to conquer the labor gaps.

Corporations are employing technology to go beyond typical upskilling and retraining programs to solve the shortage of competent labor. Embedding activities and workflows with automated procedures, real-time advice, and team communication is part of this.

6. Growing Profits and Trades

As the business grows, increasing sales and earnings will be more challenging. To deal with the increasing volume of manufactured goods, manufacturing companies have the task of rethinking their production processes.

Assessing and evaluating are the keys that keep the business on the right track. When revenues are increasing, you must be aware of the compensation that needs to be done because an increase in sales means an increase in the demand for products. For example, you need to strengthen your workload to enhance the process of manufacturing products. 

7. Weak Buyer-Supplier Ties

Counterproductive collaboration between buyers and suppliers can result in much lesser sales and profit. When the buyer and supplier don't have a good partnership, it will result in miscommunication that will possibly cause a loss of income.

Strengthening buyer-supplier collaboration will bring many advantages and benefits. Manufacturers can ask for advice and help from their suppliers. New capabilities in development, resources (and restrictions), and prices are all critical components of a successful manufacturing brand/buyer-supplier relationship model. Cooperation on product specs and associated data is crucial to a project's success. There must also be data cooperation and partnership architecture that removes the expensive delays inherent in buyer-supplier partnerships.

8. Operation and Maintenance Cost

The bigger the business grows, the more complex it gets - problems are more complicated, and concerns arise. Everything should be checked, and every tool and equipment is functioning and ready to use. One of the most significant obstacles you'll have throughout the production process will be figuring out how to keep your machinery operational and readily accessible. This also involves determining the overhead costs associated with your production.

From when a manufacturing order is produced until it is shipped out for delivery, you should examine your routing manufacturer, which is your route map throughout the factory. Determining obstacles, understanding which machines need the most attention, and reorganizing your workplace plan to find the most efficient path for your production operations might all be discovered. As a result, you'll be able to apply approaches to cope with instruments that require frequent upkeep and minimize production expenses.

9. Effects of Globalization

We always think that globalization only has sound effects on business. Globalization allows your firm to pick a supplier for raw materials and access a bigger audience. Still, this tremendous potential comes with the danger of an issue happening in your supply chain. Furthermore, the business world is highly competitive with globalization because other companies have the same opportunities. 

There are approaches on how you can overcome the difficulties brought by globalization. Manufacturing companies could resort to expanding their stores internationally and strengthening their social media presence. Moreover, it is also helpful to make sure you have the necessary tools in place to assist you in navigating the complexities of international trade and logistics

10. Over Reliance on Material Sourcing

Information on costs and manufacturing capacity only provides a partial picture. An examination of your supplier network, for example, may reveal a disproportionate dependence on material sourcing or manufacturing in a particular region. Production teams may select an alternate manufacturing process as an alternative approach to decrease risk. This may need a machined hole rather than a punched one. Manufacturers may have to revise some of their designs to accommodate a new manufacturing facility.

Someone in charge should inform supply and distribution companies of yearly production volume-based material needs, not quarterly purchases. Sharing this degree of production information may help reduce risk.

Those are the ten common problems that you may encounter as the manufacturer. Nonetheless, those are not all the possible problems - many more problems could happen while running the business. One of the essential tips is that you should be quick and fast in resolving the issues in a crisis. Resorting and investing in ERP software is indeed practical and beneficial. It can assist you in detecting risks and dangers to quickly resolve and handle any issues that could jeopardize the company.