John Mills, Executive Vice President of Business Development, Rideau Recognition
Every business needs to revisit the basics from time and time. For manufacturers, that time is now. U.S. manufacturing activity is slowing. The national manufacturing index fell to 50.7 from 51.3 the month before, according to data from the Institute of Supply Management.
Canadian producers are faring a bit worse, but better than before. The RBC Canadian Manufacturing Purchasing Managers’ Index rose to 50.1 from 49.3 in March, representing slight growth thanks to a rise in new overseas orders.
Most importantly, small manufacturers are investing at levels not seen in nearly seven years, according to capital expense data compiled by researcher PayNet. Apparently, these industrial producers with $1 million or less in credit outstanding are modernizing in hopes of winning the more advanced jobs coming back from China.
That’s good news. But increased investment alone won’t guarantee additional business. How to take advantage? Offer an attractive alternative for prototyping work. Here are five tips for doing precisely that, but without compromising the production line:
1. Create a skills portfolio. Manufacturing isn’t about basic parts and assembly lines as it used to be. Instead, clients want to see skilled workers operating complex equipment safely and efficiently. Find ways to get in new equipment and train aggressively. Sell your capabilities rather than your space and equipment inventory.
2. Partner to fill niches. Acquiring top-notch gear can be prohibitively expensive. Recruit a list of design and R&D partners and then pool resources to purchase cooperative space and advanced equipment, such as 3D printers. Sure, you’ll end up sharing revenue. But shared revenue is better than no revenue.
3. Redesign schedules to satisfy needs.Creative opportunities demand flexibility. Be open to rearranging schedules to best match client production and delivery needs. Start by surveying the workforce to find if any existing employees would do better to work a different schedule, and then fill slots accordingly. For any remaining open slots, introduce incentives for those willing to switch to different hours.
4. Reward action first. Don’t simply mandate changes. Instead, articulate a strategy to win more business and the process you’ll take to execute it. Introduce changes quarterly and then offer incentives for adopting new behavior, with rewards progressing in value as changes take hold.
5. Cultivate shared destiny. Precision workers take years to master their craft. Be mindful of that when asking for changes. Do so humbly, and then point out the tangible benefits of making adjustments. Introduce profit sharing or other mechanisms that reinforce the idea of shared destiny. After all, if the company wins, everyone should.
Producers’ needs are changing, and the manufacturing process is changing along with it. Don’t get overwhelmed. Instead, inventory skills, partner as needed, adjust work schedules, introduce appropriate incentives, and give your workers a stake in the outcome. It’s a new world, but opportunities to profit remain.
John Mills is executive vice president of Business Development at Rideau Recognition Solutions, a global leader in employee rewards and recognition programs designed to motivate and increase engagement and productivity across the workforce.