Managing the Scalability of Manufacturing at a Global Scale
Manufacturers face unique challenges when scaling up manufacturing, particularly internationally. Creating a sustainable business model requires a progressive approach to processes, planning, and implementation.
There are some crucial steps that any manufacturing enterprise has to take to scale manufacturing successfully. It includes managing the tensions between growth and scaling, mitigating risks, and identifying areas that need to scale.
This blog delves deeper into how a company can tackle challenges and scale its manufacturing globally.
Challenges in the path of scaling manufacturing
Sourcing labor
Historically, manufacturing has been a manpower-intensive field. The lack of skilled workers has created barriers to scaling. A lack of knowledge about which technologies can assist in scaling an enterprise creates a gap that shouldn’t be.
As a result, companies that could benefit from such technologies are not adopting them because they don’t have the personnel in lockstep with the innovations happening in the field. As a result, they cannot develop a sound business model that uses those technologies to scale manufacturing without such knowledge.
Managing costs
Over time, the production cost for a product is likely to increase. Typically, this is due to two reasons: general inflation or the result of events like increased energy or commodity prices.
These price increases are tough to pass on to consumers, so it’s imperative to think about how to reduce their effects on your manufacturing processes. It can involve investing in more efficient machinery, regularly reviewing suppliers for competitive pricing, and keeping an eye on the prices being charged by your competitors.
Arranging capital resources
You have many potential sources when it comes to funding, but they are all highly competitive. As a result, finding suitable sources can be challenging. For example, venture capital groups and angel investor consortiums might have requirements that your company cannot satisfy.
Grant opportunities might come with per-requisites that are too expensive or difficult to achieve. Vendors and partners with existing relationships with those types of funding organizations can be an attractive option for relatively smaller companies. However, networking with those individuals and organizations is also a difficult task, especially for brands that are yet to gain a strong foothold in the market.
How to cope with challenges to scale manufacturing successfully?
Below are some solutions that can help enterprises overcome the challenges of scaling manufacturing at a global level.
Focus on the objective
The organization’s leadership should realistically think and identify the ultimate goal behind scaling. Participation in a broader purpose-driven transformation will elevate employee morale and creativity, resulting in increased chances of success. Leaders could significantly improve their results and impact by doing this.
Evaluate the existing processes of your competitors
When considering scaling, you can see what other manufacturing businesses in your domain have done. Their operations, strategies, plans, and the results of their actions can help you figure out the voids and improvements. Following tried and tested processes of scaling will help you cushion the transition.
Acquire talent that can handle the transformation
In countries worldwide, including China and India, we see companies with strong supply chains but limited market access. This happens because of government policy, regulations, and archaic programs designed for manufacturing in a different era—an era in which labor was abundant and inexpensive and global supply chains were not yet possible. However, that is changing fast.
The skills required from today’s workforce are much different from what they used to be. Hence, companies need to up their game regarding talent acquisition.
To scale manufacturing, you need to acquire talented professionals that are open to working in and around changing workflows and are willing to step out of their comfort zone. Individuals that are willing to give out-of-the-box solutions a try are the ones who will be able to sustain your organization as it scales and transitions from a local business into a global entity.
Adapt your business to make it more technologically forward
Automate as much as you can, especially labor-intensive tasks, because minimizing the impact of poor decisions and capturing opportunities is key. Technological tools will help you transition at a global scale, and you’ll be able to use data-driven insights to enhance agility and minimize upfront costs. In addition, if an innovation-based culture is promoted, the company will be more efficient and flexible in the long run.
A US-based health insurance startup provides a perfect example. This budding enterprise deployed cloud services to innovate and scale its business. Building and deploying a new cloud-based, HIPAA-compliant health insurance platform in less than three months, the startup successfully helped its customers to track their health better.
Conduct risk assessment
Risk is inherent to the prospect of scaling manufacturing, as you are bound to run into some problems at one point or the other. Hence, you need to conduct a detailed risk assessment before proceeding — whether it be scrutinizing every change or how it might impact the way your business operates. By taking these precautions, you will most likely highlight any dangers and put preemptive measures to prevent them.
To optimize the use of resources and have a more productive work environment, evaluate work schedules and put contingency plans in place. It will help you prepare for the worst-case scenarios.
Do not shy away from taking assistance wherever you need it.
Outsourcing tasks that are unrelated or not directly impacting your core production or manufacturing processes is a smart move. Delegation of business functions will help you concentrate on your core business activity while also allowing those other tasks to be well-managed by professionals who expertly handle those specific business operations.
Strategies to stick by while scaling manufacturing
Strategy 1: Begin by reshaping the company culture
To scale manufacturing, leaders must design new business models that are sustainable and inclusive by design. It promotes sustainability, environmentalism, and inclusion while using transparency and operational efficiency in the supply chain.
Defining a company’s culture, developing the workforce, and encouraging employee engagement will also be necessary to succeed. It’s essential to develop new skills in employees who’ll be in an innovative environment and to create opportunities for them to learn these skills. Employers should invest in defining the whole organization and transforming those new skills across all teams.
One promising example is Hyperloop Transportation Technologies. Hyperloop is rethinking how to constantly innovate its business model by relying on an open consortium. They’ve also given all organizational members direct access to leadership so that the leadership can get real-time feedback from employees on their strategies.
Strategy 2: Collaborate with partners system-wide to learn and benefit from their insights
Companies can license their technology to commercial partners with synergistic or complementary technologies. Pharmaceutical enterprises usually use this strategy to bolster R&D pipelines. First, however, companies need to conduct proof-of-concept work, data collection, and analysis to convince potential investors to fund scaling endeavors.
It is often one of the most expensive and difficult steps in the life of a startup. Thus, companies must identify external resources capable of handling different aspects of the manufacturing process so that there are no barriers in the path of scaling.
One of the best examples of manufacturing collaborations is the agreement between Oerlikon and Boeing. This collaboration happened in the Additive Manufacturing domain. The intent was to establish standard processes for 3D-printed structural titanium aerospace. They have a five-year agreement that encourages the development and adoption of standardized titanium additive manufacturing processes.
Conclusion
Scaling manufacturing is a unique and exciting challenge, but the right kind of support can make a significant difference in your results. The journey of transitioning from a local manufacturing business to becoming a multi-national player in the market can become tedious if you are not open to seeking help in areas where you are out of depth.
Hence, make sure you partner with the right people and institutions every step of the way. It will ease your transition and help you succeed on a global stage.
References
https://www.hwca.com/accountants-high-wycombe/opinion/how-to-scale-your-manufacturing-business/
Challenges of Scale-up and Commercialization
https://boeing.mediaroom.com/2018-02-20-Oerlikon-and-Boeing-to-Collaborate-in-Additive-Manufacturing-Work
https://www.oneadvanced.com/news-and-opinion/how-to-scale-up-your-manufacturing-business-operations/
https://www.theaccessgroup.com/en-gb/manufacturing/resources/lean-manufacturing/five-steps-to-scalability-in-manufacturing
/https://www.weforum.org/agenda/2022/01/how-to-responsibly-scale-manufacturing-industry/
10 of the Biggest Challenges in Scaling Additive Manufacturing for Production in 2020 [Expert Roundup]
https://www2.deloitte.com/us/en/pages/consulting/articles/the-cloud-and-the-perfectly-scalable-enterprise.html