Article | December 2, 2021
The world of manufacturing is continuously evolving in the 21st century, and companies have to combat competition, altering consumer demands, and unexpected events to be able to deliver in today’s experience. Global connectivity, innovation, and disruption are all reshaping the manufacturing industry, but a world-class business platform can help companies transform operations digitally to keep up with an evermore digitized world. The factory of the future will allow manufacturers to enhance production through the convergence of information technology with factory operations, combining the effectiveness of the virtual world with the materiality of the physical world to lower costs, increase flexibility, and better meet customer expectations.
The factory of the future functions on four dimensions: resource planning, manufacturing planning, planning and optimization, and manufacturing operations. Resource planning involves defining and simpulating the plant layout, flow, assets, and resources needed to efficiently develop products in a safe environment. Normal production change requests can be quickly validated by using 3D virtual experience twin technology. This technology could also quickly pivot operations to alternative products in the case of disruptive events. Manufacturing planning enriches the resource and product definition by defining and validating a process plan and creating work instructions that meet production goals.
Digital visualization of resource and process changes can also help speed up time-to-production in any scenario no matter the location by leveraging the cloud. Planning and optimization of supply chains across planning horizons will help manufacturers gain visibility with planning and scheduling by having the ability to model, simulate, and optimize alternative supply and production plans to reduce disruptions. Lastly, manufacturing operations management can transform global production operations to attain and maintain operational excellence. Manufacturers can create, manage, and govern operational processes on a global scale while maintaining operational integrity to meet altering demands.
For the factory of the future to come about successfully, there needs to be connected technology and shared data. Technology has to be adaptable with robotics and equipment that can be reconstructed to house changes and new products. An AI-powered product demand simulation is necessary to maintain agility and boost productivity. A versatile, cross-functional workforce with the ability to explicate data and function well in AR environments is also required along with smart factory technology such as wearable sensors and virtual prototypes. Through all this, the factory of the future can connect technologies across the product life cycle while optimizing the workforce and increasing sustainability.
Although achieving the factory of the future has several benefits, creating a feasible factory of the future plan can be challenging. In 2018, only 12% of companies had a mature factory of the future plan. One of the main challenges that companies face is a lack of internal skills to devise digital solutions. However, this can be combated by carefully considering how you can utilize digital technologies to deliver improved performance, resiliency, and flexibility. It is easier to begin with small steps and to collaborate with a partner who could support your efforts to build toward your desired transformation goal. It is important to always be prepared by evaluating your next steps, industry trends, and progress metrics. It is also crucial to focus on the people, process, and technology you’re using to have a successful transformation journey.
Manufacturing with the factory of the future can provide savings in a wide range of categories. For example, it can reduce virtual vehicles build time by 80%, increase on-time performance of industrial equipment by 45%, and reduce modular construction time of construction, cities, and territories by 70%. Leading the transformation of the manufacturing space towards the direction of the factory of the future will allow manufacturers to work smart and better meet the needs of the end consumers.
Article | December 21, 2021
When it comes to developing a budget for the following financial year of your manufacturing business, many operations managers start with direct labor and material expenditures. But, what about manufacturing overhead costs?
Manufacturing overhead is any expense not directly tied to a factory's production. Therefore, the indirect costs in manufacturing overhead can also be called factory overhead or production overhead.
Outsourcing and globalization of manufacturing allows companies to reduce costs, benefits consumers with lower-cost goods and services, and causes economic expansion that reduces unemployment and increases productivity and job creation.
– Larry Elder
So, this article focuses on some highly effective overhead cost reduction methods that would help you build a healthy budget for the following year.
Manufacturing Overhead Costs: What Is Included?
Everything or everyone within the factory that isn't actively producing items should be considered overhead.
The following are some of the variables that are considered overhead costs:
Depreciation of equipment and productionfacilities
Taxes, insurance, and utilities
Supervisors, maintenance, quality control, and other on-site personnel who aren't producing signs
Indirect supply from light bulbs to toilet paper is also included in the overhead cost.
Manufacturing Overhead Costs: What Is Excluded?
Everything or everyone within or outside the factory that is actively producing items should be excluded from the overhead costs.
Factory overhead does not include the following:
Employee costs for those making the goods daily
External administrative overhead, such as a satellite office or human resources
Costs associated with C-suite employees
Expenses associated with sales and marketing - include pay, travel, and advertising
How to Calculate Overhead Costs in Manufacturing
To know the manufacturing overhead requires calculating the manufacturing overhead rate. The formula to calculate the manufacturing overhead rate i.e. MOR is basic yet vital.
To begin, determine your overall manufacturing overhead expenses. Then, add up all the monthly indirect expenditures that keep manufacturing running smoothly.
Then you can calculate the Manufacturing Overhead Rate (MOR). This statistic shows you your monthly overhead costs as a percentage.
To find this value, divide Total Manufacturing Overhead Cost (TMOC) by Total Monthly Sales (TMS) and multiply it by 100. The final formula will be:
Assume your manufacturing overhead expensesare $50,000 and your monthly sales are $300,000. You get.167 when you divide $50,000 by $300,000. Then increase that by 100 to get your monthly overhead rate of 16.7%.
This means your monthly overhead expenditures will be 16.7% of your monthly income. Being able to forecast and develop better solutions to decrease production overhead.
Five Ways to Reduce Manufacturing Overhead Costs
A variety of strategies may be used by manufacturing organizations to reduce their overhead costs. Here is a summary of some of the most important methods for reducing your manufacturing overhead costs.
Value Stream Mapping – A Production Plant Process Layout
A value stream map depicts the entire manufacturing process of your plant. Everything from raw material purchase through client delivery is detailed here. The value stream map provides you with a complete picture of the profit-making process. This overhead cost-cuttingmethod is listed first for a reason because every effort to reduce manufacturing overhead costsstarts with a value stream map.
Lean manufacturingis also one of the techniques of eliminating unnecessary time, staff, and work that is not necessary for profit and has gained undue favor in the manufacturing process. You must first create a value stream map of the whole manufacturing process for this technique to work. Once the lean manufacturing precept is established, the following strategies for decreasingmanufacturing overhead expenses can be examined.
Do Not Forget Your Back Office Management
Before focusing on factory floor cost reduction techniques, remember that your back offices, where payment processing and customer contacts occur, may also be simplified and increase profitability. Fortunately, automation can achieve this profitability at a cheap cost.
Manufacturers increasingly use robotic process automation (RPA) to sell directly to customers rather than rely on complex supply networks. This automation eliminates costly human mistakes in data input and payment processing by automatically filling forms with consumer data. Moreover, the time saved from manual data input (and rectifying inevitable human errors) equates to decreased labor expenses and downtime.
Automating Your Manufacturing Plant
For a long time, manufacturers saw factory automation as a game-changer. As a result, several plant owners make radical changes in their operations using cutting-edge technologydespite knowing it realistically. Over-investing in technologies unfamiliar to present industrial personnel might be deemed a technology blunder. Investing in new technology that doesn't generate value or is too hard for current staff to use might be a mistake.
It's usually best to start small when implementing newtechnology in manufacturing. Using collaborative robots in production is one way to get started with automation. They are inexpensive, need little software and hardware, and may help employees with mundane, repeated chores that gobble up bandwidth. It is a low-cost entry point into automation that saves labor expenses and opens the door for further automation investments when opportunities are available.
Reuse Other Factory Equipment and Supplies
Check with other factories to see if they have any unused equipment or supplies that may be "redeployed" to your manufacturing plant. Redeployment would save you time and money by eliminating the need to look for and install new equipment while lowering your overhead costs.
Outsourcing a fully equipped factory, equipment, or even staff can also assist in lowering overhead costssince you will only pay for what you utilize. As such, it is a viable method to incorporate into your production process.
Employ an In-house Maintenance Expert
An in-house repair technician can service your equipment for routine inspections, preventive maintenance, and minor repairs. This hiring decision might save money on unforeseen repair expenses or work fees for an outside repair provider. Having someone on-site who can do emergency repairs may save you money if your equipment breaks after business hours.
Manufacturing overhead costis an essential aspect of every manufacturing company's budget to consider. Smart manufacturingis intended to be productive, efficient, and cost-effective while effectively managing production expenditures. Calculating the manufacturing overheadcan provide you with a better understanding of your company's costs and how to minimize them. Depending on the conditions or geographical needs, each manufacturing plant's overhead expensesmay vary. As a result, identify your production overhead costsand concentrate on reducing and improving them.
What are manufacturing overheads?
Manufacturing overhead cost is a sum of all indirect expenses incurred during production. Manufacturing overhead expenses usually include depreciation of equipment, employee salaries, and power utilized to run the equipment.
What is a decent overhead percentage?
When a business is functioning successfully, an overhead ratio of less than 35 % is considered favorable.
How can I calculate the cost of manufacturing per unit?
The overall manufacturing cost per unit is determined by dividing the total production expenses by the total number of units produced for a particular time.
Article | January 4, 2022
Content marketing for manufacturers has become an essential component of every organization, and the manufacturing industry is no exception. Manufacturers are concentrating more on increasing their presence in both the digital and physical markets. As a result, the content market is seeing a boom as novel techniques are aimed at reaching the end objective of the manufacturing company.
According to PRNewswire, the worldwide content marketing industry is expected to increase by USD 417.85 billion between 2021 and 2025, at a CAGR of over 16%.
“Marketing is no longer about the stuff that you make, but about the stories you tell.”
– Seth Godin
Why Is Content Marketing Critical to Your Business's Success?
Helps in the formation of your brand's identity
Enables you to take advantage of organic search results
Performance is easy to assess
Produces leads and attracts ideal buyers
It balances the playing field, resulting in a higher ROI
It enables you to benefit from social shares
It entices visitors to return to your website on a regular basis
Manufacturing Content Marketing Strategies That Work
Recognize the Buyer's Pain Points
Writing amazing content requires knowing your target audience. Knowing your ideal customers helps you generate content that is relevant to them. When your potential buyer visits your website and finds content that answers his or her inquiries, you've already removed one hurdle for your sales staff.
How does your sales team define a good prospect?
Who are they?
What do they do?
Why are they visiting your business?
What is their industry knowledge?
The answers to all such questions influence what and how you write. Once you start recognizing your buyers, you can get the prospect and confidence in your organization to address your buyer’s difficulties.
Do Research on Keywords
Everyone appears to believe that skipping keyword research is acceptable. However, this is not the case. If you want to focus on marketing activities that yield big returns, you need a best manufacturer content marketing strategy backed by solid SEO.
Keyword research is the first step. Use one of the numerous internet keyword research tools to find terms with high search traffic, low competition, and relevance to your manufacturing company's activity. The better your keyword research, the better your content approach.
Create and Schedule Consistently Excellent Content
Writing outstanding content is by far the greatest strategy to increase your manufacturing company's SERP rank.
Hire a good content writer or content strategist who can combine your technical expertise, keywords, and purpose into a meaningful blog, case study, or content offer that gets results. Your material must be good to rank well.
Irregular content, like scattered production, always spells disaster. Having a defined timetable that your audience understands is essential to successful content marketing. Whether you produce material weekly, monthly, or quarterly, a timetable ensures that content is consistently released and updated.
Make Your Content More Visible
Once your content is ready, make your content visible to your target audience. Get your content marketing for manufacturing plan going to promote it in every way.
You're in a tough spot when it comes to content marketing for manufacturers. To stay ahead of the competition, you must constantly monitor the performance of your materials.
Keep an eye on everything you create and promote. Analyze which content form is performing well. Is it a blog? A time-lapse video? Or infographics? Identify your best-performing content so you can develop more of it.
Also focus on the content that doesn't perform well. Consider why that content didn't work for your audience. Is it too hard to rank that post? Is there a better platform or medium for the content? All of these queries must be answered to establish a strong content strategy for your company.
Optimize Your Content Marketing
The lack of industry-specific content marketing tactics is a major challenge for manufacturers. Many businesses use a generic strategy that ignores their particular customer connections, making different types of content marketing for manufacturers ineffective.
As the manufacturing business is a specialized business in any particular area, they also need specific content marketing strategies. Hence, focus on building a unique content marketing strategy that would help you optimize your business reach to your target audience.
General Electric Is Taking the Lead on Social Media
GE has come a long way from its 1892 beginnings. While it has retained basic product streams such as lighting, transportation, and power transmission, the goods themselves have developed dramatically. Social media marketing has become increasingly important as new technology transforms the corporate scene.
GE's Instagram Presence
GE's Instagram feed is an excellent illustration of widespread appeal. GE always shares attractive photographs with full explanations. It recognizes the power of pictures and captures common scenes in fascinating ways.
Utilizing cutting-edge content marketing methods for manufacturing businesses is critical for increasing your business's visibility and reach with your target audience. Ascertain that you select the appropriate techniques to advance your digital and physical presence in the industry. Discover the most effective plan for manufacturing content marketing and change your present marketing methods into more refined and up-to-date ones.
What are the best ways to market a manufacturing company?
The best approaches to advertising any manufacturing business are to concentrate on improving content, email marketing, SEO, press releases, and event sponsorship.
Is marketing vital for manufacturers?
Yes, since marketing opens up a whole new world for manufacturers, and a strong brand helps any business stand out from the competition.
Article | December 8, 2021
The manufacturing production schedule is a critical aspect that enables the manufacturing business to complete each production activity precisely and on time. Allocating different raw materials, resources, or processes to distinct project phases is called a production schedule. Its goal is to make your manufacturing process as efficient and cost-effective as possible in terms of resources and labor — all while delivering products on schedule.
As technology takes over and enhances many of the processes we used to handle with manual labor, we are freed up to use our minds creatively, which leads to bigger and better leaps in innovation and productivity."
– Matt Mong, VP Market Innovation and Project Business Evangelist at Adeaca
So, how is the overall production schedule managed?
According to businesswire, the global APS (Advanced Production Planning and Scheduling) software market was valued at $1,491.22 million in 2020 and is anticipated to raise $2,941.27 million by 2028 expanding at an 8.86 percent CAGR from 2020 to 2028.
Some software and tools are available to assist manufacturing organizations in properly scheduling production planning, including MaxScheduler, TACTIC, MRPeasy, and Gantt charts. Though there are numerous software programs available on the market for production scheduling, the most crucial aspect is determining which elements to consider when planning production.
This blog will look at the five most important factors to consider while planning the production schedule.
Five Elements to Consider When Scheduling Production
As we saw in the introduction, production scheduling is used in the manufacturing process to assign plant and machinery resources, schedule human resources, plan production processes, and purchase materials.
So, what are the primary components or stages of this production scheduling process? Let's take a quick look at each of them.
Planning to Make the Best Use of the Company's Resources
The role of planning in production scheduling is to use the company's resources to maintain a regular production flow. As a result, downtime is decreased, and bottlenecks are minimized, allowing production to be optimized. For production scheduling, two forms of planning can be used:
Dynamic Planning: Dynamic planning is carried out under the idea that process stages will alter. So, materials must be ready, but production cannot begin until demand is decided.
Static Planning: Static planning is done keeping in mind that all process steps will be completed on schedule and without adjustments.
Routing to Determine the Order of Actions
A “bill of materials” is used in discrete manufacturing to specify what things are needed and in what quantities.
Routing determines the path and sequence of required phases of the process. It may involve in-house operations, but it may also comprise sub-contracted components that must be returned to the production flow for final assembly.
Scheduling to Make Use of Predetermined Planning Levels
To manufacture products from components or raw materials, scheduling makes use of the previously set planning level. As a result, it is time-dependent and must meet the demand outlined at the planning level.
Each department, product, and procedure can have their own unique set of timetables. Sub-schedules for sub-assemblies or mixes and blends may be defined by department-specific master production schedules, utilized at the highest level to define product timeframes.
Dispatching to Decide on Immediate Actions
Dispatching assigns the following jobs to be done from a subset of the production queue. Dispatching is utilized to make quick decisions. This is in contrast to planning, which involves the planning of future actions. Dispatching is utilized in both pull and push production systems.
Execution to Ensure that all Processes are Carried out Correctly
Production scheduling must rely on proper execution to ensure that all processes are completed appropriately and in the sequence planned.
It requires everyone to know what they are expected to do and when they are expected to do it. Execution requires knowledgeable management decisions, well-trained employees, correct data in the manufacturing plan and schedule, and consistent sales statistics and forecast numbers. All must be present for the organization to carry out its production plan and fulfill orders.
How MRPeasy – A Production Scheduling Software Assist Manufacturing Companies in Scheduling Their Production?
MRPeasy is a cloud-based material requirements planning (MRP) application explicitly designed for small manufacturing units. Its primary functions are purchase order management, forecasting, and inventory management.
This software simplifies the process of scheduling production. It enables you to evaluate all of your anticipated manufacturing orders (MO). The bill of materials (BOM), purchasing, and stocking are all maintained in one location, allowing you to quickly book inventory and increase purchase orders (PO) for acquired parts.
MRPeasy enables you to:
Obtain all of the detailed information on all of your MOs
Consider MOs as a single block or as distinct operations.
Drag-and-drop operations and operations to reschedule
Calendar or Gantt chart views are available for monitoring scheduled orders.
Additionally, you can manage MOs smoothly. With the production planning component, you may create, amend, and update MOs. This app compiles an exhaustive list of all your MOs. You can track their progress based on the status of an order or a part's availability. Additionally, you can search for, filter, and export your MOs.
How to schedule production for your organization requires extensive research, planning, and analysis of overall product demand as well as a grasp of the time required to meet the demand. Production scheduling techniques such as job-based planning, batch method, flow method, and others help develop a productive manufacturing production schedule. Include the elements mentioned above in your manufacturing scheduling to get the best possible benefits, such as better production efficiency, lower production costs, and on-time product delivery for your manufacturing in 2022.
How production planning differ from production scheduler?
Production planning and scheduling are often mixed. But there is a difference. Planning decides what and how much work must be done, whereas scheduling specifies who and when the work will be done.
What is real-time manufacturing scheduling?
Real-Time Scheduling is a production planning, scheduling, and tracking tool that enables manufacturing organizations to improve customer satisfaction and achieve optimal operational performance cost-effectively.
How can scheduling be improved?
Communication with staff is a great way to improve scheduling. This is true for all businesses, software or otherwise. However, management should not burden employees with ambiguous or unclear communication, and vice versa.
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