Testing the Water 5 Tips For Prudent Expansion

Testing the Water: 5 Tips For Prudent Expansion

While most signs point to continued expansion in the manufacturing sector, there's no need to over-invest. Grow your operation judiciously by following these guidelines.

Is it finally time to expand your manufacturing operations? Months of growth should have you wondering.

August saw a particularly impressive boost throughout North America. Indeed, U.S. production as tracked by the Institute of Supply Management rose to 55.7 after surging to 55.4, and a new 9-year high, in July. Manufacturers also added 5,000 jobs, ADP reports.

Canada’s output rose to 52.1 from 52.0 the month prior, according to data supplied by the RBC Canadian Manufacturing Purchasing Managers’ index. Add it up, and all signs point to modest expansion after years of outsourcing.

While history says you’d be smart to remain cautious, there’s also probably enough good news here to consider growing your operation. How to proceed? Here are five tips for proceeding prudently:

1. Communicate! Workers are smart enough to know that expansion always begins with new projects. New staff and equipment? That comes later, which means you’ll be asking more of the current floor. Let workers in on your plans and goals. Is there a point at which you plan to hire? How much overtime should they expect to work?

2. Elicit support. Reaching out to your workers is a good first step. Next, elicit support from your floor managers. Show them how your plan to expand benefits the whole team. Lay out a strategy that’s clear and understandable, and which they can confidently champion to the rest of the floor.

3. Experiment first.Trouble comes when factories take on too much too fast. Experiment before you expand. Do you hope to build more car parts? Set up an experiment to test capacity and output. Figure out what you could reasonably expect in terms of revenue and profit if you were to tune an entire production line for the new work.

4. Measure frequently. Also, dig deeper. Where is your factory most vulnerable? Could expansion in other areas help you jettison lines that cost too much or suffer higher hazard rates? Expansion needn’t be a zero-sum operation. Think about building a better business, not just a bigger one.

5. Recognize and reward early adopters. Again, existing workers are always on the front lines of expansion. Reward tangibly and recognize publicly those whose efforts allow you to experiment and expand prudently. Seek to make them feel less like wage earners and more like partners.

While most signs point to continued expansion in the manufacturing sector, there’s no need to over-invest. Take a prudent approach. Communicate your intentions, elicit support from floor leaders, embrace experiments, measure success, and reward efforts that lead to best practices.

The opportunities will come. Making them last is what matters.

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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