No two factories or manufacturing facilities are the same. Every single one has unique challenges and a distinct workforce. However, the desire to keep costs as low as possible is fairly universal.
These companies are constantly looking at their operations and wondering where they can run leaner. Where can we be more efficient? Is there a small “leak” in our system that is costing us time and money?
If you’re looking to reduce costs, without hurting the quantity or quality of your output, you may consider one of these less-traditional solutions.
Over the last 10 years, automation has played a key role in North American manufacturing companies regaining their footing. They have been able to leverage automation with things like CMM measurement equipment for quality control to reduce their costs.
A strategy that has worked for North America to re-establish themselves against their overseas competition can also help you gain (or regain) an advantage in your market. You’re reducing costs by taking human employees out of time-consuming and labor-intensive tasks and putting them on higher-value tasks.
The common myth in recent years has been that automation and Industry 4.0 will spell the decline of the human factory worker as we know it.
However, thus far, technology has created far more jobs than it has displaced. These are also often high-skill and high-value jobs that are better for both the employee and the employer.
Invest in Engagement
Focusing on bringing in lower cost and lower-skilled employees could be a way of reducing costs. However, you run the risk of creating seemingly “disposable” jobs and increasing your turnover rate—and turnover is expensive, particularly in this sector.
In fact, a recent report revealed that over 40% of surveyed companies in the manufacturing sector struggled with turnover rates that reached 20%, or higher. Meanwhile, an astonishing 99% of respondents said that finding new skilled hires was their first and foremost challenge.
It’s hard to get 99% of manufacturing leaders to agree on anything, so this points to a massive issue.
As recruiting the best and brightest talent remains a challenge, you should consider making employee engagement a key metric in an effort to hold onto your strongest employees. It’s hard to calculate the exact ROI of an engaged workforce, but some estimates state that an engaged employee will outperform a disengaged one by about 200%.
In the manufacturing sector, you also need to factor in that a more engaged employee will be:
· More likely to take pride in their work, while valuing their role
· Less likely to be involved in a safety incident
· More likely to recommend your company to friends and colleagues
· Less likely to call in sick or show up late
· More loyal to your company and less likely to leave you
How much would that employee be worth to you?
Is investing in automation or employee engagement thinking completely out-of-the-box? Not necessarily, but they may not be the first things that most decision-makers and C-level executives in the manufacturing sector think of when looking to cut costs.
However, either one of them can lead to, not just lower costs, but a higher output and new highs across the entire organization.