5 tips to scale up your manufacturing business operations

As a business owner in today’s highly competitive markets, you are probably working towards or anticipating a business expansion. In fact, in the modern business world, not many ideas carry the same importance as growth. However, the decision to scale up your business operations brings about numerous challenges that you should approach uniquely, as no successful scaling has a clear-cut path.

For small business owners, scaling up business operations comes with a relatively high risk, especially for manufacturing companies. It can take time to arrive at the most efficient and profitable way to organize production, and avoiding pitfalls requires a strategically thought-out approach. Even if your equipment, materials, and processes are aligned for a smooth production line, scaling production is rarely as simple as it sounds.

manufacturing business operationsThankfully, many manufacturing businesses have navigated scaling up their manufacturing operations successfully, leaving a trail for future companies to follow. The key to scaling up is to execute it in a way that makes the most sense for your business. If the next logical step for your manufacturing business’s expansion is to scale production, you should strategize for sustained and achievable growth. The five tips below can help you successfully navigate scaling up your manufacturing business operations.

Employ the right equipment

Since your manufacturing process depends largely on the materials and equipment used for production, properly scaling up a manufacturing business means investing in high-quality equipment that can support your growth. While this is potentially expensive, it can be a wise investment if handled strategically.

In some cases, an even better alternative to investing in new equipment is outsourcing your production. For example, if you use aluminum parts for your products, choosing the right aluminum extrusion company to handle this part of your manufacturing process can significantly improve your efficiency. Whatever your manufacturing needs may be, outsourcing to a manufacturing plant that has the necessary capacity and equipment to handle such an endeavor can reduce your costs and bring long-term benefits.

Employing the right equipment will provide the opportunity to increase or speed up production when needed; therefore, you will not only successfully scale up the production process but also outperform your competition by quickly adjusting to market demand. Choosing the right equipment is not a one-size-fits-all feat, so make sure you carefully consider your options before investing.

Keep the manufacturing processes as simple as possible

A refined process is essential for sustainable and predictable growth. Every successful business functions on a foundational system of processes; this is especially true of the technical operations involved in manufacturing. Simplifying the internal processes allows for more efficiency and fewer mistakes.

Achievable scaling depends on established and repeated processes and systems that should be easy to follow. Having complex procedures in place usually leads to longer execution time, which in turn slows down business operations and inhibits growth. Therefore, a successful manager should continuously work on simplifying manufacturing business operations. If you notice that your manufacturing process (or your business in general) is becoming more complex, you should probably take a step back and try to simplify it.

Invest in your employees

Hiring new staff will likely be on your to-do list before scaling up your business operations, but investing in the right people the right way is essential to optimizing your growth capabilities.

Additional workers will naturally increase manufacturing output, but landing highly skilled employees can boost the productivity and capacity of your manufacturing operation. This does not mean that you should only look for hardworking and resourceful employees, but that you should also provide adequate training and respect to retain them. Employees that feel valued will display higher loyalty, share your business’s vision and work harder at helping your business operations scale up.

In certain businesses, the owner or managers establish such a strong team that they can step away from the day-to-day operations and delegate important tasks to their staff. This does not mean that managers should completely detach from operations, but rather that they can build a solid work structure that will yield higher efficiency.

Make a realistic sales forecast

Before deciding to invest in scaling up your operations, you need to think about how you can achieve a return on investment. Seeing as expansion costs can take a toll on your cash flow, it is vital that you make a realistic sales forecast.

Before deciding on manufacturing volumes, consider changes in the local economy and market, as this can influence the demand for your product. Be consistent in your evaluation of the forecast to ensure updated and realistic planning.

Don’t forget that maintaining and increasing sales is key to keeping up with increased production – you can always work on improving sales to support your expansion goals.

Know your financial condition

Since scaling up is a financially intensive endeavor, having a solid financial foundation is critical in making sure that your business’s growth is sustainable and strategically handled.

Having sub-par financial systems and controls can be hurtful in several ways. Above all, managing your cash flow is vital to handling any expansion, since you need to have the predictability of funds and expenses to strategize and actually execute plans. Not only do you need to have an overview of your financial situation to allocate resources in a smart way, but you will also need it when you try to go for financing to replace or secure capital. In general, you need to make sure that you are financially healthy to handle intensive projects.

Small business owners usually lack a steady cash flow, which is the first roadblock in the decision to scale up. Knowing where your company stands when it comes to financials provides either a safety net or a set of expectations that will help you avoid or mitigate financial losses. If your business does not have a steady cash flow, you will need to opt for financing to acquire the necessary funds for your growth operation.

Final thoughts

When scaling up your business operations in the manufacturing industry, you are likely to encounter challenges and complications along the way. Although these disruptions are almost imminent, you can still mitigate or avoid them altogether by taking the right steps in your scaling operation.

First, remember to employ the right equipment, as your manufacturing process will depend on it. Second, keep your processes simple to increase efficiency. Then, remember to invest in your employees to reach that efficiency. Before employing these resources to achieve your production volumes, make a realistic sales forecast. Finally, know your financial situation since it is crucial for achieving the scale-up in the first place.