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9 Manufacturing Pain Points (and How You Can Help Alleviate Them)

Posted by IndustrySelect on Sunday, September 5, 2021



There’s no doubt about it. The U.S. manufacturing sector has faced and overcome huge challenges over the past few years. While you admire their resourcefulness, you want to help your manufacturing partners succeed. Address these nine major manufacturing pain points through your website, emails, meetings and other touchpoints. These simple steps can help you cement your relationship with your current clients and find new clients most in need of your products and services.

1. Supply Chain Disruptions

The single greatest manufacturing challenge remains supply chain disruptions. News outlets cover shortages such as the lack of semiconductors in automotive manufacturing. These shortages are just the symptom of a larger problem.

Decades ago, many manufacturers decided to outsource parts and electronics manufacturing. At the time, Asia could make small parts more cheaply than American manufacturers. Poor quality control and raising wages overseas have since made outsourcing less inviting. Increased shipping times also make it hard for manufacturers to plan accurate production schedules.

The Reshoring Initiative offers resources to manufacturers who want to bring their work home to America. A shorter supply chain carries less risk of disruption. If your company provides products and services that are in short supply, now is the time to reach out to more manufacturers. See IndustrySelect's intent data resources to discover what products and services are trending right now. Meanwhile, familiarizing yourself with manufacturing terminology can help you speak your client's language. See this informative glossary of 80 manufacturing-related terms and definitions. 

2. Materials Shortage

Manufacturing pain points like supply chain disruptions lead to materials shortages for many small- to medium-sized manufacturers. Even though it is not "lean," manufacturers should consider strategic stockpiles of vital parts. Just-in-time ordering frees up warehouse space. However, it can also leave your manufacturers without the parts they need when they need them.

Help your companies take a close look at the parts that keep their production lines humming. It is worth the cost of extra storage space to keep major parts on hand.If your company provides products and services that are in short supply, now is the time to reach out to more manufacturers. See IndustrySelect's intent data resources to discover what products and services are trending right now.

3. Labor Shortage

Manufacturing suffered a heavy blow with COVID-19 labor shortages. Even before the pandemic closed facilities, 38% of U.S. manufacturers reported labor shortages. Post-pandemic, that number is now 54%.

Several factors affect this shortage. Manufacturing is still seen as dirty and dangerous work. Plus, the skills gap continues to widen, as too few candidates have the skills that manufacturers need. Of the existing employees, burnout is prominent from working long hours to make up for the shortage. Additionally, the Baby Boomer generation is reaching retirement age in great numbers.

Remind your companies to consider retraining current employees. They should also look at new hires from alternative sources. Many of these sources come with grant funds to help pay for training and salaries. Suggest that they explore Welfare-To-Work programs, Second Chance programs for former prisoners and EARN (Employer Assistance and Resource Network) programs to find qualified candidates with disabilities.

Additionally, if your company provides staffing, training or workforce development services, now is the time to take a proactive approach and reach out to manufacturing companies in need of labor solutions. IndustrySelect can help you reach the decision makers most relevant to your type of business. Types of executive decision makers in IndustrySelect's database of nearly 400,000 manfuacturers, include those in Human Resources, Health & Safety, Research & Development and more.

4. Automation Challenges

Industry 4.0 promised to ease some manufacturing pain points. Unfortunately, the research and investments required have turned into issues in and of themselves. Manufacturers still don't have a full picture of what smart automation actually does, with the industry adopting solutions without a unified vision.

On the plus side, factory and warehouse automation do ease the labor shortage. Wireless networks make some of this automation possible. RFID chips track parts throughout the warehouse until the finished product ships. Wireless also gives floor managers a clear overview of every production point.

So, small- to medium-sized companies can see the benefits of automation but aren't yet positioned to take full advantage of them. If your company provides automation solutions, now is the time to step up your prescriptive selling efforts and hone in on sutomation solutions for your clients.

5. Backlog of Orders

The backlog for manufactured goods has risen for six straight months. Nationally, it now stands at $1.23 trillion.

It’s always better to have extra work rather than no work. As high as it is, the current backlog might overwhelm smaller manufacturers. Without a change to their business model, they may not be able to keep pace with the demand for their goods.

Brainstorm with your manufacturing clients to look for hidden inefficiencies. Consult IndustrySelect’s large manufacturing database for potential subcontractors to help your clients. They might find that it's faster and less expensive to locally outsource some of their production. They can chip away at the backlogs without incurring overtime costs.

6. High Prices

Consumers see the price increases in everything from steel to produce. Manufacturers have watched increasing prices in raw materials since mid-2020. Some of these price-related manufacturing pain points are from tariffs while others are a result of the COVID-19 shut-downs.

Nonetheless, the end result is the same. Already strained, manufacturers can't afford to absorb the increased raw materials price.

Squeezed at both ends, many manufacturers pass the price increases on to consumers. When meeting with these manufacturers, talk about messaging. Help them explain their new pricing structure to consumers in order to emphasize transparency.

If you provide financial services, you may find heightened demand in the U.S. manufacturing sector. Now's the time to reach out to CFO's and business owners in industries most affected by high prices. Additionally, you can help you clients by referring them to an industrial marketplace like IndustryNet, where they can source and quote multiple companies for the best price. 

7. Shipping and Logistics

Shipping and logistics prices are also on the rise. Container shipping prices, the backbone for manufacturers requiring parts made in Asia, have risen by 25-50% over the past year.

For small- to medium-sized manufacturers, shipping cost increases are even higher. Because they usually order and ship in smaller quantities, they are at the mercy of spot prices rather than large contracts.

Advise your partners to reconsider their supply chain and move it onshore where possible. Also, renegotiating any contracts and taking advantage of leverage can create some cost savings in existing partnerships. Work with your manufacturing client to understand the feasibility of bulk purchasing some items so their order quantities are larger.

Additionally, if you provide shipping and logistics help, see IndustrySelect's Shippers Database for freight brokers, which provides detailed profiles of over 300,000 freight shippers and a half million executive contacts. This can help you reach out to those manufacturing clients with shipping needs.

8. Regulations

One of the most exhausting manufacturing pain points is regulations. Manufacturers face strict regulations about plant operations, and most of them (a shocking 297,696 restrictions) come from the federal government.

Some of the regulations protect the safety of our nation’s food and drug supply. Others, such as the Buy American Act, boost America’s economy by relying on U.S. manufacturers as much as possible.

However, many regulations simply make it more difficult for manufacturers to operate efficiently. The National Association of Manufacturers estimates that federal regulations alone cost manufacturers $19,564 per employee every year.

It's important that manufacturers stay in compliance with any regulations that govern their business in order to save where possible. Turn their attention to compliance solutions and encourage them to conduct audits to resolve any potential non-compliance issues in the future.

9. Sustainability

As consumers grow more aware of their own carbon footprints, they expect a small carbon footprint from the products they buy. Manufacturing is one of the largest causes of environmental pollution. From toxic emissions to dangerous chemicals, manufacturing can be a hazard to the community.

While changing to a more sustainable business model may not be cheap, manufacturers should know that 76% of millennials surveyed are very concerned about environmental issues. They are also happy to pay higher prices for products from sustainable manufacturing plants.

Switching your manufacturing clients to wind or solar may not be feasible or practical. However, as their partner, you could give them some tips and small steps towards a more sustainable model.

IndustrySelect can help solve manufacturing pain points.

Keep IndustrySelect on hand as your partner as well. With detailed profiles of nearly 400,000 U.S. manufacturers and one million executive contacts, IndustrySelect can help you connect with the manufacturing companies in need of your products and services. Click here to try out a free demo, loaded with a few hundred sample profiles.

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