First off, if you are based in a Western country, congratulations. Right now the environment for manufacturing isn’t exactly great. We’ve had decades of manufacturing migrating abroad thanks to low wage East Asian labour. First, we had the so-called Asian Tigers in the late 1960s and throughout the 1970s. And then we had the rise of China in the 1990s and 2000s.
It all meant that manufacturers in Western countries got outcompeted. But now it looks as if we’re about to turn a corner. The endless supply of cheap Chinese labour looks set to dry up. And that means that wage rates over there will finally start to rise, just like they have already in the UK.
That means that going forward at least, manufacturing businesses are better positioned to succeed. But even though the global situation might be favourable, the individual decisions you make count for the bulk of your success. Getting your manufacturing startup off the ground is a big challenge. So what should you do?
Think Smart Technology
Many envision a return of manufacturing to the West. This isn’t because there is a cheap pool of labour, ready to be exploited. It’s because the workforce in the West is more highly educated. In other words, the West is the place to implement new smart technology, because it is the most technically literate part of the world.
What does this mean for your startup? It means using all the latest innovations in technology to your advantage. At what stages in your production process can you take advantage of the internet of things or the cloud? Where can you place sensors to monitor production processes? And how can you integrate your production line with both your inputs and outputs?
Consult Industry Leaders
The manufacturing sector is built heavily around industry know-how. There aren’t textbooks that can tell you how to set up and run a factory for your particular business. It’s an ongoing process of discovery.
That’s why it’s a good idea to consult with your equipment suppliers. CNC lathes and other equipment should be installed by those with a degree of experience. They’ll be able to tell you the best way to implement their equipment in your factory.
Do Your Research
Trade shows and trade journals are a great place to find out about the way in which your industry operates. Try talking to people involved in manufacturing a product and find out what they do to make it happen. Don’t just dive right in and expect your process to work first time. It’s a process of trial and error that can be sped along by learning.
Have Open Partnerships
Rather than zeroing in on one particular vendor, experiment with multiple open partnerships. Having a bunch of suppliers all competing to supply your business will help keep them competitive. It will also help you to diversify the risk your business faces, should a supplier let you down.
If you’re small, this is a significant risk. Suppliers will often switch their production to supply a big business if they get a suitable offer.