Asking the Right Questions
Deciding on the most beneficial and profitable manufacturing facility projects for an organization, and making sure they will meet needs both now and in the future, starts with asking good questions. The most important question being, what problem (or problems) is the organization trying to solve? While it seems basic, it’s a critical question that sets the foundation for the most strategic next steps. Let’s say the response to that question is, “We want to increase profitability, but have a dated factory and can’t keep up with demand.” From there, additional questions that should be asked include:
- What will you do until that new factory is built to keep up with demand and address immediate issues cost-effectively?
- How can you improve production now with your existing facility and bridge to the next one?
- Who are your customers now? Whom do you want them to be 10 years from now?
- What requirements or specs do you have?
- Are you going to own or lease your building?
Tackling the Top Five Industrywide Challenges With an Integrated Approach
Understanding the greatest challenges the manufacturing industry is facing and knowing how those challenges directly impact every aspect of an organization’s business can help establish the right direction forward for implementing manufacturing facility projects. There is no “one-size-fits-all” solution, but having an awareness of basic considerations and options can help guide an organization on its unique path to success.
Taking a deeper look at major obstacles, asking the right questions, and having the right team in place to execute projects can set organizations up for success now and beyond. 1. Labor Shortage
Last year, nearly 50 million Americans left their jobs for new opportunities. These resignation rates, combined with the widening experience gap (due to an increase in retirees and decrease in new entrants into the field), have created significant challenges for manufacturers. How do you meet high demand with fewer employees managing production? How can you better attract and retain top talent? How can you optimize operations and bolster safety and health protocols to minimize risk/downtime?
Paths to success:
- Evaluate current processes and working conditions to determine where improvements could be made, automation could be incorporated, etc.
- Renovate or expand office space to make it a more attractive, engaging, and sustainable working environment for employees. Through flexible workplace design, organizations can better boost engagement, productivity, and a company’s bottom line.
- Invest in people — providing development and training opportunities to deepen teams’ knowledge base and skill set.
How can companies strengthen their supply chains without weakening competitiveness? By using strategies laser-focused on efficiencies and cost reductions for more than a decade, businesses have increasingly sent aspects of the supply chain overseas. When the pandemic hit, the system crumbled, and reliability and flexibility became paramount over cost savings. With the overlapping and interwoven nature of supply chain connections, the solution to strengthen a company’s ability to get its product to market consistently is equally complicated.
There is no “one-size-fits-all” solution, but having an awareness of basic considerations and options can help guide an organization on its unique path to success. Paths to success:
- Analyze which aspects of the organization’s supply chains failed to modify the approach.
- Reduce the reliance on overseas markets and diversify supplier networks to include partners within the same region, so organizations can continue to produce even if an area of the world shuts down. (Accomplishing this requires long-term capital planning to accurately predict need and building financially secure relationships with a broader network.)
- Return to a vertically integrated approach to retain control over more aspects of the supply chain. This approach might involve expanding or optimizing the operations or footprint of production and storage facilities or incorporating appropriate storage capacity to keep supplies on hand.
Our digital world is lifting connectivity and data growth to new heights. Taking advantage of these capabilities and information gives organizations a competitive advantage. However, it’s important to understand which technologies will have the greatest impact and highest ROI, and what associated threats and risks come with those technologies.
Paths to success:
- Digital transformation goes beyond technology and process implementation. It’s about changing the foundations of business to improve efficiency and competitiveness based on those implementations. Any data technology project must be part of a big-picture strategy outlining the vision of the organization’s future state and how it will get there.
- Look at how any new technology will impact the people on your team. What training will be required? How will it change the way employees interact with the business and their roles?
As many as 70 or more variables can influence site selection — from infrastructure, logistical, and incentive considerations to permitting requirements, staffing needs, and community acceptance concerns. So, choosing a location for facilities is notoriously complex. If not complicated enough, today there is a shortage of space available.
Paths to success:
- Know what resources are available and to whom to turn: Some owners look first to their in-house engineering and strategic planning staffs, both of which can provide helpful insights on where and how the manufacturer can grow its business. Many accounting and business consulting firms also tend to offer site selection capabilities, helping identify the geographic regions where a manufacturer should focus growth. Commercial real estate firms can help identify potential sites and incentives programs.
- To select a site, work with the team responsible for the planning, design, and construction of the manufacturing facilities. This group has a deep understanding of the big-picture needs and fine-print details, from the specific demands a new plant places on local infrastructure to a manufacturing operation’s logistical demands, permitting challenges, and staffing needs.
Reducing manufacturing costs without compromising product quality or eliminating jobs is one of the greatest challenges organizations face. And within the past several months, there is an even greater rise in cost of materials due to inflation, ongoing supply chain struggles, and natural gas prices.
Paths to success:
- Take advantage of pre-capital planning consulting services, so you can explore several possible futures and make sound investment decisions that best serve your organization today and in the years to come, without expending unnecessary capital.
- Work with an estimator who listens to you. Every project has a cost to it, but by understanding your project goals, predicting costs by understanding market conditions, using supplier and subcontractor relationships for pricing and constructability and capturing cost history, and communicating this information in a timely and meaningful way to the project team, you can identify major cost savings.