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9 Common Challenges in Factory Operations and Solutions

Keeping a manufacturing business up and running is no easy task. Whether it’s meeting stringent quality standards or adhering to labor laws, manufacturers face numerous operational challenges on a daily basis.

Overcoming challenges requires persistence and a strong mindset. Taking a proactive approach to dealing with these issues will help your company thrive.

1. Inventory Management

Inventory management is a big challenge for manufacturers, but the good news is that it has become easier thanks to automated solutions. That said, many manufacturers (particularly small ones) still handle their inventories manually. That is inefficient and prone to errors that can result in inaccuracies, shortages and excess stock as well as unidentified losses.

Use a proven, mathematical formula to help you determine the minimum inventory levels that your company needs to avoid running out of stock. This formula is called a reorder point.

Identify low-turn or slow-moving stocks and take steps to remove them from your inventory. This may involve a clearance sale or a special promotion, but it can also mean putting these items on hold until new shipments arrive.

Regularly audit your stock through periodic counts and audits. These can include a full physical inventory, cycle counts and ongoing spot checks. Separate your administrative inventory control responsibilities from accounting and finance for security reasons.

2. Quality Control

Quality control (QC) is a process that involves inspecting and testing products and processes to ensure they meet standards. It is often a part of a quality assurance framework, which also includes setting up procedures to prevent defects and addressing issues once they occur.

QC can help reduce costs by identifying and fixing mistakes early in production, reducing waste and eliminating costly recalls and rework. It also helps companies adhere to regulations and compliance requirements, avoiding legal issues and penalties. Quality control can also build brand reputation and improve customer loyalty and retention.

In addition to regular quality control audits, it’s important to provide employees with clear expectations and training on QC procedures. It’s also helpful to automate recordkeeping, making it easier for employees to report on internal checks and improvements. This way, you can ensure that all employees are following standard procedures.

3. Automation

Automation streamlines operations and improves a company’s workflow, resulting in higher production rates, greater efficiency, reduced safety risks, lower costs, and better product quality. However, it requires a significant upfront investment and can be difficult to implement.

Process automation accelerates all processes and increases reliability, eliminating manual delays that can halt production and waste time. It can also help teams establish consistent governance strategies that will enable faster decision-making.

Integrated automation connects all of your independently automated work processes under one control system. This can simplify communications and eliminate siloed systems that make it hard to track activities, look back at what happened, or predict what will happen in the future. It can also reduce human error and free up valuable resources to focus on more important tasks. For example, lights-out manufacturing automates entire plants so that they can operate 24/7 without any human intervention. This can save operating costs by removing the need for labor and eliminate labor-related expenses such as payroll, benefits, and training.

4. Supply Chain

Supply chain challenges can be costly, especially for manufacturers relying on raw materials or components from abroad. Increased shipping costs, fuel prices and labor shortages can add up to a major financial burden. These issues can also lead to reduced quality, resulting in customer dissatisfaction and damage to company reputation.

The planning and purchasing phase includes determining demand, placing orders, negotiating pricing and terms, and managing inventory. The manufacturing stage involves assembling products, testing and quality control, and packing. This stage requires a robust data management system to keep track of huge amounts of information.

The warehousing and fulfillment stage is all about getting the product to the end consumer. This includes managing the transportation and logistics process, delivering goods, and maintaining a reliable warehouse management system. This stage can be costly, particularly if the business is reliant on international shipping routes and long lead times. This makes it a challenge for small manufacturers and machine shops to manage their costs.

5. Regulatory Compliance

man wearing protective goggles - 9 Common Challenges in Factory Operations and Solutions

Regulatory compliance refers to the policies and practices companies implement to comply with external mandates, such as industry standards and laws. It also encompasses establishing procedures to address risk factors that might impede operations, such as data and cybersecurity breaches and environmental impacts. There are also OEE specialists. they use an OEE formula for full capacity during the manufacturing process.

Developing compliance policies, training new hires, and conducting regular audits can help mitigate regulatory risks. Ensure compliance standards are clearly communicated to all teams and establish a culture of continuous improvement. As the regulatory landscape evolves, reassess and adjust protocols as needed to stay ahead of changes.

Although manufacturing regulations can be a burden, they must be followed to ensure the health and safety of employees, customers, and the community. Despite their cost, the benefits of maintaining compliance far outweigh the costs associated with non-compliance. Moreover, any forced work stoppages will ripple up and down the supply chain, impacting all aspects of production and distribution. As such, it’s essential to prioritize risk management strategies to limit unforeseen disruptions.

6. Labor

Managing the labor component of a factory is one of manufacturing’s biggest challenges. Labor productivity can be impacted by inefficient processes, convoluted workflows, and inconsistent worker training. Improving these factors can improve productivity.

However, labor shortages continue to challenge manufacturers. Baby boomers are retiring faster than they can be replaced, and finding workers with the skills required for manufacturing work is difficult.

To combat these issues, manufacturers can offer better compensation to attract new employees and provide flexibility for current ones. They can also invest in mentorship programs and partnerships with universities to encourage young people to pursue careers in manufacturing. Additionally, safety must be a priority to protect current workers from injury. This may require the use of trolleys, carts, and other equipment to make lifting heavy objects easier and reduce worker injuries. Ultimately, this is about creating a positive workplace culture where workers feel valued and are able to perform their best.

7. Environment

A clean, state-of-the-art working environment is critical to attract and retain workers. Investing in equipment with climate control, appealing aesthetics, ergonomic features that reduce physical strain, and technology capabilities to boost productivity are all part of the solution.

Modern manufacturing processes generate massive amounts of data. However, the ability to manage data effectively is often a challenge. For example, IoT sensors installed on production lines churn out raw data that must be streamed to cloud-based applications for monitoring, control, and analytics.

Keeping up with environmental regulations is another manufacturing challenge. Solutions include implementing data management systems that enable granular company reporting on sustainability progress, sourcing and distribution patterns, carbon footprints, and more. Additionally, using cloud vendors with greener data centers can help manufacturers lower their environmental impact and cost. Finally, leveraging logistics software to optimize shipping routes can further cut energy costs and emissions.

8. Marketing

In addition to the internal challenges of manufacturing, small manufacturing businesses and machine shops also face external issues such as economic fluctuation and unpredictable demand patterns. This can impact sales, pricing, market access, and customer retention.

Another common problem manufacturers face is finding efficient ways to lower production costs and improve efficiency in their factories. Many of them try to save production costs by sacrificing product quality, but this will only decrease their profitability since dissatisfied customers will stop buying from them.

The good news is that there are multiple manufacturing challenges that can be overcome with the right strategies and solutions. Using ERP software to streamline processes, minimize waste, increase productivity, and more can help manufacturers navigate treacherous seas and reach calmer waters.

9. Technology

Today’s manufacturing environment requires the use of technology that can increase productivity, decrease labor, and improve quality. This technology can include anything from 3D printers to smart robots to automated processes that can help with production speed and waste reduction.

Manufacturers must also maintain cybersecurity to protect their information and systems from hacking attempts or ransomware attacks. The best way to combat this is by implementing a comprehensive security plan, including firewalls, 24/7 monitoring, multi-factor authentication software, facial recognition, and more.

The world of manufacturing can be a turbulent one, from COVID-19 pandemics and economic uncertainty to increasing regulations and customer demands for sustainable practices. However, manufacturers can mitigate risks by using supply chain planning systems that include scenario modeling to anticipate and prepare for changes in business conditions. They can also diversify their production, sourcing and shipping operations across industries or geographic regions to minimize the impact of volatility in the global economy.