Manufacturing business loans from Qualifi
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The American (and Canadian) manufacturing industry has been under pressure for decades, as any industry leader knows.
An increasingly connected global supply chain has flooded the market with products manufactured in China, or elsewhere, and these products are offered at costs it can be tough to match. Manufacturing simpler products is almost entirely automated, but competition is fierce at every level.
The combination of internationalized supply chains and the severe shortage of skilled manufacturing plant operators and machine experts in North America has made it hard for many manufacturers to match the efficiency of Chinese plants.
High-level manufacturing skill sets are rarely developed by colleges or trade schools in North America, leaving many complex manufacturing lines with persistent skilled-labor shortages.
Quality line workers and entry-level employees aren’t much easier to find these days, either, thanks to nearly a decade of economic growth that’s brought unemployment rates to record lows.
Many manufacturers have begun re-emphasizing apprenticeship programs to recruit, train, and nurture the right sort of skills in the right types of talent. These apprenticeships might not pay much, but the process of up-skilling new employees on complex manufacturing process is neither fast nor inexpensive.
Simply hiring people with the right skill sets can require salary offers that haven’t been seen in the industry for some time.
Whatever approach you take to staffing up your operations, you’re bound to find it costlier and more challenging than it was in years past.
The alternative to costly hiring endeavors is greater automation, but automation technologies have never been inexpensive or easy to implement, and there is such a thing as too much automation.
You can ask Elon Musk how easy it is to automate your production line. After trying for more than a year to build an entirely automated “factory of the future” for Tesla, Musk had to pull back from his machine-driven ambitions and admit that he still needed skilled people on the production floor to keep things moving smoothly.
You can automate up to a point, but to ensure effectiveness, you’ll need to have machinery that operates exactly the way you need, and that adds another layer of complexity and cost to the process of upgrading your production lines.
Other technology can be just as important as production machinery.
You need software and systems to manage your supply chain, your suppliers, and your customers. The more customers you have and products you make, the more complex your systems will be.
If you don’t have a dedicated IT staff to upgrade and maintain your systems, you’ll have to hire consultants, but the process isn’t simple for a modern manufacturer. Connecting disparate operations and fulfilling orders that come in from around the country (or around the world) is a project that can make or break smaller manufacturing businesses, so it’s imperative that you get it right the first time.
Staying competitive and getting ahead as a manufacturer doesn’t come cheap.
We understand the struggles of modern manufacturing businesses, which is why we offer a range of business funding options to cover all sorts of scenarios. Check out our funding options now if you’re ready to take the next step in your business journey.