Managing a manufacturing business on a day-to-day basis can be taxing, and it's easy to become consumed with daily hands-on items, forgetting the big picture.
Here are some tips to help your manufacturing company evolve and grow.
Set time aside to develop a strategic plan. Your strategic plan should focus on long-term business goals and objectives. Start by reviewing last year’s strategic plan and build on it. Why is it important to have a strategic plan? New technologies and regulations bring constant change, and your supply chain is an ever-evolving critical segment to your company’s success.
Make sure you are bench marking your business with KPIs. If you are actively involved with the day-to-day operations, you have a good understanding of what’s going well and where you might need to make a few adjustments. But do you know how you compare with your competition, customers, and suppliers? Do you know where the industry is going? Bench marking allows you to compare your processes, products, and strategies to similar companies.
Perform an annual SWOT analysis. SWOT is a tool that encourages you to look at your business's strengths, weaknesses, opportunities, and threats. SWOT helps you identify what is going well, where performance improvements can be made, opportunities for business growth, and risks to your company’s existence.
Establish a budget. Start by reviewing your previous budget. Flag any items that were over or under budget. Identify the reason and adjust for the coming year. Make sure your labor budget reflects new staffing, benefits, and merit increases, as well as any potential overtime. Also, ensure you are allocating money for capital expenditures, building maintenance, and employee training. Your budget should be based on a solid business forecast, not on wishful thinking.
When reviewing your budget, also look at your contracts. If you're losing money on a job, try to renegotiate. If you’re making a lot, consider offering a better price, which may prevent customers from shopping around. You should also review contracts with people who perform snow removal, plant maintenance, janitorial work, and other services.
You may want to review your debt load as well. Ask yourself if it makes sense to refinance, pay off old debts, or take out additional funds to buy new capital equipment or facility upgrades.
Review regulatory compliance. The end of the business year is always a good time to review regulations, permits, and industry or supplier certifications to ensure you are still compliant. Review and update your website and any printed materials accordingly. I know of a few companies that are ISO 9001:2015 certified, but their website, company signs, and placards have not been updated to reflect their certification to the latest standard.
Limit employee turnover and think about your business future. Once you have completed your bench marking, SWOT analysis, strategic planning, and budgeting, look at your employee turnover and consider what you can do to limit it. Also, think about succession planning for yourself and any key employees.
Paying attention to these processes may help improve your business.