Manufacturing companies need clear vision to complete in today's marketplace. Without a vision manufacturers will be lost in terms of what to produce, where to produce it and how to sell it. This is particularly true because of huge challenges in today's manufacturing environment. Four of these challenges worth looking into include intense global competition, constant cost pressures, finding and maintaining skilled labor, and adapting to diverse consumer needs.
Handling intense global competition
Retailers, distributors and manufacturers have increasing access to emerging markets as a result of globalization. Many of these emerging markets have very low labor costs and have access to raw material suppliers allowing them to be very competitive from a cost and lead time perspective. Companies can easily shift production to any part of the world in search of good quality materials, expertise and lower labor costs. The result has created vast global supply chains where suppliers constantly battle for pieces of the overall manufacturing pie. As a manufacturer it is important to understand your strengths in this global chain and leverage them whether they be lower costs, shorter lead times, greater flexibility, end consumer knowledge or turnkey production. It is also critical to understand what parts of your business might be better outsourced to other global manufacturers to keep you competitive.
Dealing with cost pressures
Manufactures are having to deal with cost pressures from a demand perspective and a supply perspective. With the rise of the internet information has become readily available for end consumers and retail buyers. This has allowed buyers to easily compare more products on the basis of cost which has had downward cost pressure for many manufacturers simply competing on price. In addition, the global economy and demand from more consumers in Asia has put higher cost pressure on inputs such as energy and raw materials. Many companies in developing countries are also finding they need to pay more taxes where historically they paid very little. With these increasing cost pressures, manufacturers are being forced to do as much, as quick, and to do it for less and with less.
Finding and maintaining skilled labor
Another major challenge facing manufacturers is locating and maintaining skilled labor. Three main reasons for this are:
1. Employability - For the salaries paid, many job applicants lack the required technical or behavior skills required to work in a manufacturing setting. Modern manufacturing firms are increasingly looking for engineers able to work collaboratively on multiple tasks while interfacing with very expensive machines and complicated processes.
2. Firm/Industry image - Manufacturing has had a historic image of workers toiling in dark, dirty, and potentially harmful environments. Other assumptions may be lower pay and heavily unionized/rigid work environments. This is changing in many manufacturing settings where firms are looking for skilled employees to run complex computerized machines. However, historic manufacturing environments have left an image problem that negatively affects labor availability compared to other industries like finance or software technology.
3. Training gaps - Apart from the challenges in attracting new skilled labor, getting already employed staff to enroll in and complete job training has also encountered some challenges for existing manufacturers. A lot of job training is required as manufacturers upgrade to more efficient computerized facilities.
Adapting to diverse consumer needs
Vision is critical for any manufacturer to efficiently serve its target market. Manufacturers must foresee what their consumers need and want and produce goods accordingly before their competition. Technological innovation has also caused consumer needs to change over time further requiring manufacturers to keep up. These needs have changed in terms of product attributes but also in the way consumers buy and receive products and also share their purchasing behavior with their communities. Manufacturers must be ready to adapt to what consumers want to purchase but also how they want to purchase it and what post and pre sales support consumers need.