Undertaking manufacturing processes keeping in mind customer requirements will go a long way in increasing a unit’s profitability
Today, when most manufacturing companies evaluate the areas where they can make improvements, they normally have a tendency to consider manufacturing as a cost centre. Companies generally undertake manufacturing upgrade initiatives to reduce inventory, cut down the labour or raw materials required and utilise the available assets effectively. But in today’s ever changing business scenario, the focus should be different. CEOs of manufacturing companies should consider manufacturing as the vital part of growth expansion that demands a clear understanding of the customers’ needs. This kind of perspective helps the sales and marketing division in the manufacturing unit to boost the top line.
Unfortunately, this kind of approach gets little importance, not only in large manufacturing units, but also in small and mid-sized units. The main reason behind this is the lack of coordination between the sales and operations departments.
In most cases, companies fail to reach a consensus to discard the misconception that manufacturing only generates costs. In the case of SMEs, the sales and marketing teams often consider manufacturing as a bottleneck in achieving strategic growth. While doing this, most manufacturing units fail to detect the mistake that they are making.
Today, amidst economic instability, companies focus more on how to cut manufacturing costs, but in doing so they fail to give importance to the needs of their customers. Very few companies have the ability to recognise the vital link between manufacturing and customer requirements.
Whether it is a hardware company or an auto component manufacturing unit, it has to keep in mind that to drive growth there is a need to have a manufacturing approach that gives special attention to the customer’s needs. The problem with most SMEs in this case is that they cannot challenge the traditional manufacturing priorities. While doing this they unknowingly asphyxiate both revenue generation and business expansion.
Manufacturing companies have to give more time to analyse the factors in manufacturing that can drive sales. Companies can focus on manufacturing with an aim to produce the right products in the right quantities. This helps the companies to reduce inventories and augment their revenue.
In another approach, companies can also undertake modular manufacturing. In this approach, companies have to make their production line more flexible and simultaneously reduce their labour costs. By adopting this approach, the manufacturing company’s efficiency in producing customer-specific products increases manifold. Moreover, the company gains a competitive edge in the market through this approach.
Small and mid-sized companies that are involved in original equipment manufacturing can concentrate on developing complex parts and design tools that are meant to achieve greater speed and efficiency. In today’s competitive scenario, auto component manufacturers that can quickly remodel their production line to adapt to the changing demand and preferences of their customers are more viable.
It is not possible for a company to view its manufacturing function from a different angle overnight. It is quite natural that manufacturing initiatives will face resistance from some departments within the organisation. But it has to keep in mind that these difficulties need to be sorted out to increase profitability.
RK Menon, Director, Aromen Engineering Company Pvt Ltd, a mid-sized engineering company in Coimbatore |
