5 profit killers in manufacturing


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As with all businesses, some areas are more prone to loss than others. In manufacturing, five key aspects in particular are ranked as the biggest “profit killers” and have landed many companies in dangerous waters.

But what are these biggest manufacturing profit killers and what could help companies avoid these pitfalls?

1. Lack of an effective maintenance management system

Whether the manufacturing company in question is a startup or an existing company that is growing rapidly and trying to cope with a plethora of responsibilities such as scheduled maintenance tasks, without an effective computerized maintenance management system (CMMS), it’s easy for priorities to start slipping and important maintenance events to be delayed, creating more costly problems in the long run.

Good CMMS software can provide facility maintenance and operations teams with the tools to organize and perform these required events efficiently. It can also recognize and schedule preventive maintenance as well as set reminders regarding regulations and inspections, among other important tasks.

2. Substandard Equipment

The reason for its importance stems from the importance of maintenance planning: keeping equipment in optimum condition. Underperforming equipment due to lack of maintenance or late upgrades can lead to production of substandard products, other costly downstream repairs, and premature equipment replacement.

However, if a piece of equipment is in constant need of repair, it should be discussed with the machine manufacturer. If you can’t replace the machine in this way, it might be more cost-effective to get a new machine rather than having to do expensive repairs from time to time. Weighing the pros and cons of pricing in this way can end up saving a lot of money.

3. Poor staff performance

If your people are underperforming, more than likely your business will be too. A management team must be able to organize and equip staff to work effectively with a clear, easy-to-understand workflow and task list. They need to know who to contact directly for any questions or advice. Regular staff training and seminars regarding new equipment, upgrades, programs, software, and especially compliance issues, are imperative.

Additionally, it is also important to ensure that you have enough staff on a project. Overworked staff can rarely be productive, plus it’s counter-intuitive to save money on a few staff members and then have to shell out a lot of money because you ended up falling behind on a task in progress. due to a lack of manpower.

4. Disorganized procurement process

You won’t really be able to tell if you’re making too many products or too few if you have a disorganized inventory management system – and that can end up costing you in more ways than one. Without an organized strategy, vital stock statistics won’t be readily available, and keeping tabs on things like missing, lost, or even stolen stock can be a feat. Some CMMS solutions include provisions for purchasing management so that all staff can be kept informed of stock status.

A systematic sourcing strategy will include aspects such as order statistics that show the amount of stock carried versus demand. This can be changed and adjusted as needs change so you never end up with too much or too little stock. Another important aspect is being able to check stock expiration dates so you never have to deal with unnecessary products.

5. Non-compliance

From loss of reputation, as well as loss of business, personnel and productivity, to increases in insurance costs, costly fines and even imprisonment, the repercussions of non-compliance are not a joke. Compliance is not an avenue you can ignore, even if you wanted to. In addition to being a legal necessity, it is also a security issue. Staying compliant, while it takes work and effort, is always in the best interest of the company.

Again, an all-in-one CMMS can also support a manufacturing company’s compliance issues, ensuring that all equipment is regularly maintained and in order and that all personnel have attended to the required relevant compliance training and seminars and is up to date on new compliance. Questions. In addition, all compliance documentation will be in one place and easily accessible for viewing, sharing or updating.

Image Credit: United Soybean Board / Fickr.com

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