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6 Lessons You Can Learn to Improve Your Manufacturing Efficiency

Editor's Note: If you are interested in becoming an expert on Supply Chain Management (SCM), take a look at Flevy's Supply Chain Management (SCM) Frameworks offering here. This is a curated collection of best practice frameworks based on the thought leadership of leading consulting firms, academics, and recognized subject matter experts. By learning and applying these concepts, you can you stay ahead of the curve. Full details here.

Featured Best Practice on Manufacturing

160-slide PowerPoint presentation
"Lean" is a management philosophy based on the Toyota Production System (TPS). With Lean manufacturing, you will be able to enhance value for your customers by streamlining process flow and eliminating waste. Simply put, with Lean, you will be able to increase productivity and [read more]

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textile factory quality controllerWhen Ford introduced the first moving assembly line, he changed more than the car industry. He transformed the culture of our workforce and the expectations that consumers have of producers. Since then, manufacturers have become the role models of savvy business and global cultural awareness.

Seeing the Big Picture

Unlike service providers who tend to have strict geographic limits, manufacturers have a global point of view that extends backward in the manufacturing process to suppliers and forward to delivery and customer care. Large scale manufacturers need to look at the entire supply chain and manage it on a worldwide level.

Amazon ranks as one of the best supply chain managers in the world, primarily because it has an eye on its delivery as well as incoming products and customer care. It is no coincidence that Amazon also ranks best in customer service.

Eye on the Niche

When the supply chain breaks down, the innovative manufacturer needs to rapidly adjust accordingly. This is what happened in the mid-1980s when the AIDS epidemic caused a shortage of latex for gloves. Neil Tillitson and Luc DeBecker shored up the shortage by developing nitrile based gloves and starting a new market in the process.

The Education Link

The United States Department of Energy routinely offers collaborative opportunities between companies, educational facilities and the government. With the idea that innovation does not happen without some intellectual muscle, Purdue University has partnered with manufacturers and the U.S. Office of Energy Efficiency and Renewable Energy to develop new sustainable manufacturing processes.

Sustainable Businesses

This leads to the marketing aspect of a sustainable manufacturer. Sustainability in business and marketing has a specific and well-researched meaning. A sustainable business is one in which ecological, economic, social and cultural aspects force on the singular fact that man is part of nature. With that in mind, simply look at Elon Musk and Tesla as an example of marketing a sustainable business. Tesla’s entire business plan is developed around making affordable cars that are environmentally sound so that they can make better cars that are more environmentally sound.

Low Waste and Efficiency

Lean manufacturing is the implementation of systems so that there is little or no waste. Nike is a good example of a lean company. In 2013, it decreased energy usage by 13 percent, water by 10 percent and overall waste by almost nine percent, reports Triple Pundit. Besides its impact on sustainable marketing, waste has a solid influence on a company’s bottom line. Waste costs money to remove. In some cases, a lot of money. One Ohio auto manufacturer was spending $12 million annually just on the waste associated with the painting process. Even a 10 percent cut in waste costs could save a company millions.

The Benefits of JIT Accounting

A lot of important accounting practices have come out of the manufacturing process. One of them is Just-In-Time accounting. A producer wants to have both supplies and inventory on hand to manage workflow, but having too much will place an undue burden on storage space and can lead to spoilage of ingredients. JIT is a system of tightly monitoring supply and demand of supply chain components so that you always have just enough on hand to keep your customers happy. Take a look at Toyota as an example since it was one of the first manufacturing companies to put JIT into practice.

Excel workbook
Highly sophisticated and user friendly Financial Model providing advanced financial & planning analysis for a Startup or existing Manufacturing Company. Suitable for any type of industry, the model is a flexible tool for CEO/CFO's to control and improve daily operations and forecast financial [read more]

Want to Achieve Excellence in Supply Chain Management (SCM)?

Gain the knowledge and develop the expertise to become an expert in Supply Chain Management (SCM). Our frameworks are based on the thought leadership of leading consulting firms, academics, and recognized subject matter experts. Click here for full details.

Supply Chain Management (SCM) is the design, planning, execution, control, and monitoring of Supply Chain activities. It also captures the management of the flow of goods and services.

In February of 2020, COVID-19 disrupted—and in many cases halted—global Supply Chains, revealing just how fragile they have become. By April, many countries experienced declines of over 40% in domestic and international trade.

COVID-19 has likewise changed how Supply Chain Executives approach and think about SCM. In the pre-COVID-19 era of globalization, the objective was to be Lean and Cost-effective. In the post-COVID-19 world, companies must now focus on making their Supply Chains Resilient, Agile, and Smart. Additional trends include Digitization, Sustainability, and Manufacturing Reshoring.

Learn about our Supply Chain Management (SCM) Best Practice Frameworks here.

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About Shane Avron

Shane Avron is a freelance writer, specializing in business, general management, enterprise software, and digital technologies. In addition to Flevy, Shane's articles have appeared in Huffington Post, Forbes Magazine, among other business journals.


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