Proceed With Caution 5 Scary Manufacturing Trends to Avoid

Proceed With Caution: 5 Scary Manufacturing Trends to Avoid

An influx of orders is bound to stretch capacity at some point, which could fool factory managers into making the sorts of mistakes that forced some to close their doors during tougher times. Here are five signs your floor may be risking too much as the economy turns in manufacturers’ favor.

Halloween may be past, but it’s still a scary time for manufacturers.

You wouldn’t know it from the data. North American factories are winning back business from China as the rise of additive manufacturing via 3D printing takes hold on a broader scale.

In the U.S., the Institute for Supply Management’s index rose to 56.4 from 56.2 the month prior. New orders rose slightly while, as a group, factories added jobs. Canadian producers saw similar gains as the RBC Purchasing Managers Index rose to 55.6 -- the highest ranking since April 2011.

So what’s the problem? An influx of orders is bound to stretch capacity at some point, which could fool factory managers into making the sorts of mistakes that forced some to close their doors during tougher times. Here are five signs your floor may be risking too much as the economy turns in manufacturers’ favor:

1. Overbuilding. Tempting as it may be to expand aggressively in order to capture an outsized portion of the manufacturing work coming back from China and elsewhere, remember that business goes as fast as it comes. Don’t accept every contract. Instead, seek terms that allow for modest expansion and which reward progress.

2. Failing to stage new work. All-in commitments are dangerous. Don’t allow the prospect of a big payday to break your processes. Be mindful of your floor’s capabilities and look to expand in stages, preserving your ability to eke out a profit as you go.

3. Scaling up too fast. Once you’ve started expanding, insist on a pace that doesn’t overcommit workers, finances, or existing physical resources. Document everything. Share what’s working and what isn’t as you expand, and then make corrections before expanding further.

4. Failing to test regularly. The rush to grow often gets in the way of testing for best practices. Don’t let that happen. Instead, recognize and reward leaders who document changes and surface breakpoints and productivity gains.

5. Ignoring innovators and leaders. Finally, remember that it’s talented teams that implement expansion plans. Devise a system of rewards that recognizes behaviors that lead to measured, profitable growth. Broadcast successes widely.

North American factories have enjoyed a remarkable comeback this year. Don’t spoil the renaissance by adopting poor habits. Stick to what has worked in lean times and stay close to the talent that has kept the doors open so far. Recognize their efforts regularly, and reward them appropriately. I promise they’ll happily return the favor.

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.

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