COMMON MANUFACTURING PROBLEMS AND HOW TO ADDRESS THEM

Small or mid-size businesses generally have no choice but to outsource their manufacturing to a contract manufacturer who has the tools and capabilities to mass produce their product. For start-ups and other businesses, investing in the equipment, labor, and other costs associated with manufacturing their product just doesn’t make financial sense. Contract manufacturers provide an easier alternative that can help these businesses turn a profit. However, there are some common issues that can crop up when working with a contract manufacturer.

At Pivot UK, we want your business to be a success, so we’ve rounded up some of the most common manufacturing problems—and how to address them.

Inventory Issues

Surpluses and “sold out” are two sides of the same coin. They’re both problems that you don’t want to have, and they both can be addressed by better forecasting. One thing to keep in mind is that your forecasts are not always going to be 100% accurate. However, the more time and resources you invest into making sure you have accurate predictions, the fewer problems you will have with your supply.

The other thing to keep in mind is that poor forecasts will also hurt your relationship with your manufacturer. Sometimes an unexpected spike or cancellation will render your forecast less than accurate, but that shouldn’t happen consistently. Take the time to make sure your orders are based on factual customer demand, instead of wishful thinking or questionable projections.

Pricing Surprises

Changes in pricing can easily become a point of contention between you and your manufacturer. The way to address this is really only by doing your due diligence before signing a contract with a manufacturer.

Sometimes businesses only look at the standard pricing set by a manufacturer, without investigating the breakdown of raw materials, labor, and other considerations. A business sees a low price and chooses it in an effort to save money.

The problem is that many manufacturers may be giving you a “best case scenario” price in order to outbid competition. It’s up to you to seek out the details and assumptions behind their pricing before you do business. Take a hard look at the structure of their pricing, rather than bottom-line price they provide.

Problems With Quality

Small businesses that are competing against an establishment don’t have a lot of room for error. A slip in quality can be a critical misstep. Before you begin production, have a conversation with your manufacturer about expected failure rates, control limits for each stage, and product yields.

You should also have a plan in place for the return of any product, managing and directing the flow of information, and clearly communicating problems to your manufacturer. There are also tools available that can offer you real-time visibility into the production of your product, enabling you to identify potential problems before they become critical.

Finding, working with, and maintaining a relationship with a reliable contract manufacturer can be a difficult process. If you’d like to work with a partner who can guide you through the entire process, then call Pivot UK today.