Top 5 Manufacturing Challenges & How to Overcome Them

Manufacturing process inefficiencies can often feel overwhelming, especially when solutions aren't immediately apparent or they seem to come with a high price tag. Let’s explore the top five challenges commonly faced in the manufacturing industry and how to solve them. To learn more about these issues and potential strategies to overcome them, download our free industry report, which outlines these effective solutions in detail.

Supply chain disruptions have become increasingly prevalent due to various economic factors. These disruptions can lead to significant delays in production and increased costs.

To combat this challenge, manufacturers must develop a resilient supply chain strategy that includes diversifying suppliers and increasing inventory levels for critical components. Additionally, incorporating advanced forecasting techniques can help anticipate potential disruptions before they occur. Embracing technology such as blockchain can enhance transparency and traceability within the supply chain, allowing manufacturers to quickly identify and address issues as they arise. Plus, building strong relationships with suppliers can foster collaboration and flexibility, enabling quicker responses to unforeseen challenges.

Maintaining high-quality standards in manufacturing is essential for consumer satisfaction and brand reputation. Quality control issues can arise from inconsistent processes, equipment malfunctions, or inadequate staff training.

Implementing rigorous quality control protocols is crucial. This includes adopting advanced measurement technologies, conducting regular audits, and fostering a culture where employees take ownership of quality at every stage of production. Additionally, leveraging data analytics can provide insights into quality trends and help identify areas for improvement. Training programs that emphasize the importance of quality and empower employees to contribute to quality assurance initiatives can create a more engaged workforce, ultimately leading to superior product outcomes.

The manufacturing industry is facing a significant labor shortage, and not only finding but retaining skilled labor is becoming increasingly challenging for manufacturers.

You need to implement technology that can help ease some of the heavy lifting and employee turnover costs. According to Deloitte, 56% of manufacturing organizations say that employee turnover has a moderate to severe impact on their bottom-line finances. So, to overcome this, you need to select and invest in an ERP system in the short term that will come with a positive ROI in the long term. 

To address this issue, companies must think smarter about their processes and staffing approach. By implementing efficient systems, businesses have the potential to do more with less, simplifying processes for smaller teams with technology that automates tedious tasks. 

The current economic climate often results in manufacturing organizations cutting costs and re-strategizing frequently. Solutions such as an ERP platform are a large investment, making companies hesitant to switch software. However, the ERP software could be what’s hindering the growth of a business. 

By partnering with a strong technology consulting firm, you can get a step ahead of your competitors with software solutions that offer sustainable growth for your business. In this industry, staying ahead of the curve is everything, so you want to make sure your technology isn’t holding you back.

The cost of an ERP implementation is half the battle, with budget overruns being the common issue, affecting 45% of these types of projects, according to Forbes. This is why your technology partner and implementation approach are so important and can make or break your operations.

Compliance and security are one of the most important aspects of your entire manufacturing operations, and the right ERP system can help you manage and oversee safety or become a roadblock. 

Think of your ERP environment as the central nervous system of your manufacturing organization. Without a thoughtful approach and certain configurations, you won’t have the right level of visibility across your departments. Here are just a few ways that smart ERP implementation can help make managing compliance and safety a breeze:

Incident Tracking

You should have a centralized system that easily organizes incident investigations, making it easy to track them, take the necessary follow-up actions, and close them out. 

Automate Processes & Alerts

Set up automated alerts for important items such as audits, safety inspections, and compliance deadlines. This helps you hold your team accountable and comply with safety protocols.

Training Management

Ensure every employee receives the same training materials in a centralized database. Your ERP should help you track their certification completion and expiration dates.

Reporting & Analytics

Your ERP software should help you oversee metrics such as incident rates and other operational data so that you can identify areas that need improvement and make the necessary changes to your training programs. This mitigates risks and maintains compliance across your various processes.

The manufacturing industry is always changing, but we foresee the following trends continuing to be a driving force when it comes to ERP implementations for businesses.

Purposeful Customizations

According to Forbes, only 3% of companies use standard, out-of-the-box functionality for their ERPs, meaning that many organizations are leaning towards tailored solutions. However, customizations shouldn’t be made just because the option is available — tailored configurations should be made thoughtfully, which is why equipping yourself with the right technical team is crucial.

While open source solutions are continuing to become the popular option, you should also weigh what customizations will boost or hinder your operations in the long run. Oftentimes, our team has had to reconfigure ERP systems that have experienced customization overload, making daily operations challenging for employees. 

Phased Implementation Approach

Here at OSI, we swear by the phased implementation approach. While it’s typically a slower timeline, it leaves room for adjustments and prioritizes critical business functions first.

This approach allows us to map out predetermined steps where we leave no stone unturned. Phased implementations also give a little wiggle room for any potential risks or roadblocks that may come our way during the project. Since an ERP system is a large investment, a phased approach gives us the opportunity to remain detail-oriented every step of the way. 

AI Capabilities

In many industries, AI is revolutionizing the way we work, with a majority of organizations believing AI is critical to their ERP systems. This is because artificial intelligence allows for better data analysis and automation capabilities. With its flexibility, AI is no longer a “nice to have” but is now a need in order to stay competitive within the manufacturing industry.

To prepare for upcoming challenges, manufacturers must create adaptable strategies and invest in continuous improvement initiatives. Fostering a culture of learning within organizations will empower employees to embrace new technologies and methodologies, ensuring a skilled workforce ready to tackle future demands.

Ultimately, those who prioritize flexibility, innovation, and sustainability will not only overcome current challenges but will also thrive in the dynamic future of manufacturing. As the industry evolves, manufacturers will need to remain vigilant, continuously assessing market trends and consumer preferences. By leveraging data analytics and customer feedback, companies can refine their products and services to meet the ever-changing needs of their clientele while maintaining a competitive edge in a rapidly advancing marketplace.