Planning for the coming year is critical to the success of any business, but it’s particularly important for manufacturing companies that typically must examine, analyze and make assumptions about a far wider range of influencing factors in order to increase profitability and sustainability and achieve the next level of growth.
This means that the more information a manufacturing firm can gather at the start of the planning process the more confident its leadership team can be in the plan put forth.
So with the end of 2016 in sight, we’ve brought our own leadership team together for the sole purpose of collecting and sharing the insights they’ve gained over the past year of working with manufacturers in a variety of sectors across the U.S. and abroad.
Here’s what they’re seeing and what they recommend manufacturers consider when planning for 2017:
Ken Parezo, P.E., senior engineer, managing partner:
- Investments in growth, such as gaining new markets or market share, may not be as big of driver in 2017. I see manufacturers gaining more traction by investing instead in doing what they’re already doing better. For example, investing in projects that will result in decreased yield loss or reliability issues.
- Maintain a strong business case mentality when judging the investments you want to make in 2017. This often requires allowing for a longer time period for financial return on investments, but decisions made from this perspective build lasting organizational strength. Invaluable.
- Spend the time and resources required to understand how your market is affected by global influences such as the status of the energy industry, both short and long term. For other types of companies, ignorance might result in merely a missed opportunity but for manufacturers the cost can be your business.
Bill Ballard, P.E., project manager, partner:
- Make sure you have a clear understanding of your manufacturing goals for 2018. The changes you make now will actually have more of impact two years out and further. Additionally, don’t underestimate the value of clearly communicating 2017 goals throughout your entire organization, as well as the value of including employees in the development of process changes you intend to make.
- Don’t lose site of the immediate productivity gain you can make by planning for reliability improvements. Often the largest increases in profitability over the course of a year are a direct result of simple gained efficiencies.
- Right now, many of the most experienced manufacturing employees are in the process of retiring. Find a way to capture the knowledge you’ll be losing and also include personnel growth and training as part of your 2017 plan.
- Adopting a Stage Gate process for operating and equipment changes will enable you to quickly identify the value of each initiative your organization is considering. Stage Gate is the process we use with our clients at EFI Group and it’s one of the key ways we’re able to minimize risk.
Jim Solich, P.E., senior project manager, partner:
- Even the most recent expansion projects may not provide an accurate model for 2017 costs. So keep in mind that the more technology that’s involved in the proposed project, the greater the potential for significant increases – and plan accordingly.
- Anticipate technology “creep” and project higher costs to ensure critical projects don’t ultimately get killed. This is especially important if your project planning was not completed during the current cycle.
- Remember that projects involving mature technologies will always enable you to get more for less. When conducting end of year planning consider revisiting projects that were previously put on hold thanks to what was then new technology. Some of those projects may now be doable.
Scott Laich, senior project engineer, partner:
- A key part of planning is making sure your organization is adequately staffed to make changes. Understand your limitations in this area and explore where you can find temporary resources.
- Don’t underestimate how difficult it can be to assemble a high-functioning team to execute planned projects. Attack this challenge before it becomes a problem by also making ongoing staff training part of your annual plan.
- Minimize surprises by making sure upfront planning is fully completed for each individual 2017 project before execution begins. It can be tempting to start sooner, but the outcome of doing that is always costly.
Helping manufactures determine the best plan for achieving process improvement and next level growth, as well as ensuring the successful execution of every project is our focus. If you’re a manufacturing company seeking a partner you can count on during end of year planning and beyond, contact Jim Solich at email@example.com