Making a success out of a manufacturing company is tougher than it looks from the outside, as there are so many aspects to consider and so many variables involved, some of which are not always in your direct control.
Because of this, it’s important to remember that if there are elements you can alter, optimizing here will deliver the best possible results in the long run. For entrepreneurs just getting started in the manufacturing space, the following are just a few of the points you’ll need to take on board to make your business viable.
The equipment used to manufacture physical products can come in all shapes and sizes, and there are myriad machines even within seemingly small niches that you’ll have to weigh up and compare.
From manual engine lathes to laser cutting machines and even 3D printers, matching the type of product you want to the equipment in question is only part of the puzzle. You also need to think about things like the volumes you want to achieve, and the extent of your budget.
For manufacturing startups, it is often more cost-effective to choose used machinery over new units. You’ll also have to factor in the expenses that come with powering, maintaining, and repairing the machines over time.
As well as having machines on-site, you’ll need skilled team members to operate them. Hiring experienced operators right out of the gate is handy, but you might also want to get newcomers involved, in which case providing on-the-job training will be necessary.
Safety is another major consideration in this context, and it should go hand in hand with training and overseeing employees while they are on-site.
It is better to be up to speed with safety regulations and to follow best practices, because the healthier your workforce remains, the better equipped they will be to increase the productivity of your manufacturing business.
Likewise, you will need adequate insurance to protect your business from legal costs, as well as other expenses, in the event that a disaster does strike on-site. Manufacturers may need to pay more for cover because of the added dangers of the environment they occupy, but this is worth it.
Aside from the machinery itself, one of the main costs you’ll face as a manufacturing company is that of the materials you use to make your products.
This market can be volatile, which has to be encompassed in your planning, or else you could leave yourself exposed to sudden spikes in prices which might scupper your ability to produce anything affordably and still turn a profit.
One way to account for this is through processes and procedures which are designed to keep waste to a minimum. If as little material is being wasted as possible during manufacturing, you will not be burning any more cash than is necessary to get your products out the door.
Quality assurance carried out at regular intervals along the production line will help with this, allowing for flaws to be spotted sooner rather than later, and for processes to be fine-tuned so that more of the material you use makes it through unscathed.
There is little point in manufacturing physical products if there is not an audience to buy them once they are made. As such, carrying out thorough market research before you begin production is essential.
Whether you work with focus groups to test out prospective product ideas, or you analyze the rest of the industry to see what your rivals are doing along the same lines as what you have planned, every morsel of data you can gather will be to your advantage.
There are so many examples of products where a lack of research led to a flop post-launch, which in hindsight should have seemed like an obvious dead-end to those behind the project.
If you want to avoid falling into this category, then it’s important that you take the time and make the investment in market research, and don’t dismiss findings because they fail to align with your preconceived notions of what people want.