China isn’t the manufacturing powerhouse it once was.
New data shows negligible expansion in the region as North American factories continue to ramp. A survey by HSBC found September capacity rising to 50.2 from 50.1 the month prior, but much lower than the 51.2 economists had expected.
Good news when you consider recent history. But the shift isn’t necessarily a win for American and Canadian factories. Only those tuned to profitably handle the sorts of high-capacity, low-cost jobs that once made a home in China can expect to earn more business.
Is your facility ready? Here are five tips for preparing your floor to handle production work that’s returning from China:
1. Run productivity experiments. Don't go into the bidding thinking your factory will be ready immediately. Try higher-volume runs in a small line set aside specifically for experiments and training. Measure against expectations and tune accordingly. After all, there's no point pitching for business you can't handle or which won't be profitable.
2. Reward progress. And if you do find the right balance? Good. Reward teams that make progress to keep them invested in the process. Publicize their efforts inside the factory and throughout the company and document their work as a best practice to build upon. Then, when the work comes in, give these leaders first crack at production assignments.
3. Scale up quickly. Once you've proven your floor's ability to handle the new work, take steps to scale up operations. Be ready to start production as soon as a contract is signed. Not just for volume concerns but also because you'll naturally be refining your process as you go. The faster you start, the faster you get to improve.
4. Test regularly. Improvements won't just happen. You'll want to document everything early on and then use your R&D line for productivity experiments. Set a schedule and try new approaches at least quarterly. More often, if possible. Every test should lead you towards better results and a more refined approach you can pitch to the next client.
5. Make a habit of recognizing innovators. Don't just focus on the line. Instead, focus on people. Seek out and recognize those whose work breaks new ground when it comes to improving operations. Also, be creative with the process. Small enhancements (e.g., shaving 30 seconds off production time, improving the cleanup process) can have a snowballing effect, leading to higher profits and a better environment for all.
Some manufacturing jobs aren’t worth the price -- in China or anywhere else. Be careful about how you approach new business. Design productivity experiments, measure and reward progress, scale up quickly if the opportunity is there, test regularly, and recognize those who make it all work.
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.