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Operational Resilience Helps Manufacturers Stay Profitable During Risky Times

Posted by Dawn White on Apr 21, 2022 8:07:03 AM
Dawn White
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If the last two years have taught manufacturing companies anything, it’s that operational risks are a persistent and unpredictable reality. The industry has seen everything from pandemic-related shutdowns to unprecedented labor shortages to historic supply chain issues. These problems threaten production and profitability on a daily basis.

In response, manufacturers are looking for innovative ways to achieve operational resilience — improved capabilities in the face of heightened business risks. Operational resilience is the ability to maintain productivity and profitability in the midst of increasing challenges and risks.

While the risks seem to be mounting over the last couple of years, there’s plenty of reason for optimism. The manufacturing sector is showing off its ability to innovate — and the solutions are as diverse as the risks they address.

Let’s take a look at the trends in operational resilience that manufacturers should be keeping their eyes on.

Related: Retaining Blue-collar Workers in a Changing World

Reshoring Production

Supply chain issues have led to massive bottlenecks throughout the manufacturing sector. Everything from microchips to aluminum to plastics have been in short supply. Many of the shortages are tied to components that are manufactured in China and Taiwan, which has many companies looking into reshoring their factories in North America.

Recent trade deals between the U.S. and its neighbors are providing additional incentives for moving production back to North America.

Investing in Automation Technologies

Even with recent developments, reshoring will increase the costs of production — which is one of the reasons companies are also doubling down on automation.

Whether you’re competing with a low-cost labor market or bumping up against labor shortages, automated systems have become a must-have. Robot sales hit an all-time record in 2021, increasing by 37% from the previous year.

Other technologies can help boost productivity and cut wasted operational costs, as well. For example, while production systems track your employees’ productivity, they don’t calculate the piece rates for your workers. Your payroll system doesn’t do that, either — your payroll personnel spend hours every pay period manually crunching the numbers.

IDI’s integration solution connects your production system to your payroll system and automatically calculates all of the complex payroll calculations for every employee. The automation platform eliminates hundreds of hours per year and recovers thousands of wasted dollars in operational costs.

Related: Need to Incite More Innovation This Year? Foster Entrepreneurial Employees

Improving Processes

Automation and technology aren’t the only way to streamline your operations. Often, you can boost your efficiencies and productivity by making simple process changes.

Now may be a good time to hire a manufacturing process consultant. Manufacturing consultants help you identify inefficiencies within your organization, on the production floor as well as in your offices.

Your shop floor may be configured inefficiently, or your business processes may have too many hands stirring the pot. You may be paying for multiple software applications to do what one platform can provide.

An outside consultant with expertise and a fresh perspective can help you find profits and productivity you never expected.

Investing in Predictive Maintenance

Predictive maintenance is nothing new to the manufacturing industry, but the need for better data collection and analysis has steadily climbed. The more data you can collect, the better you can strategically plan your equipment maintenance.

Next-generation sensors are able to give greater insights than ever before, and monitoring systems report the minutest details about wear and tear.

That translates into immediate insights about maintenance needs and repair issues — and less time paying a technician to do diagnostics on a machine that was unexpectedly shut down.

Recruiting Better

All of these innovations help offset production problems that come with a labor shortage, but there’s no substitute for being fully staffed. Manufacturing companies need to find innovative ways to recruit, hire, and retain workers — especially the latest generation to enter the workforce.

This is a marathon, not a sprint — it involves changing the public perception of manufacturing to an image of a well-paid, technologically innovative field with plenty of career opportunities. Employers will need to purposefully educate the public and invest in creative recruiting strategies.

Build Your Operational Resilience with IDI’s Automation Software

Looking for innovative ways to build operational resiliency in your organization? IDI can help by providing payroll solutions that are designed to address the specific challenges that manufacturing companies face. We understand the unique payroll complexities of the manufacturing industry and provide software solutions that most HCM and payroll companies can’t offer.

Find out how IDI’s payroll solutions can help improve your company's efficiency and profitability.

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Topics: Manufacturing Industry Solutions