De-Risking Manufacturing for Digital Transformation

RAMESH DIGE| January 30, 2019
DE-RISKING MANUFACTURING FOR DIGITAL TRANSFORMATION
For the past few years, one of the biggest trends in manufacturing is Digital Transformation. Most manufacturers have created some type of Digital Transformation roadmap, started their search for relevant use cases, and in some instances, began their implementation. These transformations are either based on Industry 4.0 or Smart Manufacturing.

Spotlight

Mitutoyo America Corporation

The world’s largest metrology company was founded in 1934 by Yehan Numata with one product – the micrometer. Mitutoyo’s philosophy at that time was to make the best mechanical micrometer in the world. But also to produce them in quantities that made them affordable and available to all of manufacturing so they could improve the quality of the products they manufactured. This philosophy was expanded in the next several decades to include a wider product offering focused on mechanical, dimensional gaging products. Mitutoyo focused its R&D and production efforts on creating the most advanced micrometers, calipers, indicators and other measurement tools in the world.

OTHER ARTICLES

Digital Manufacturing Marketing Plan - Five Checklists

Article | September 22, 2021

Marketing for manufacturing companies hasn't always been easy. Because of the rising volatility in the economy, trade shows and face-to-face sales meetings have changed their manufacturing purchasing patterns. On the other hand, buyers are seeking for more convincing market reasons to buy your product. This means your manufacturing marketing strategy needs to evolve to answer each of these questions from the buyer angle in order to convince them in choosing your products over other competitor products. Manufacturers must do more than simply focus on product awareness to attract new buyers. Instead, they must concentrate on the content and intent of promotional activities that will reach target buyers through manufacturing advertising. The promotional message has always been the critical factor to be delivered at the right time and place. To hit the rock at the right spot, you must first understand the buyer's expectations in the manufacturing industry. So, let's get started. Buyers' Expectations from the Manufacturer Faster production cycles, higher-quality components and products, and affordable pricing are all expectations among manufacturing buyers. Therefore, marketing professionals in the manufacturing domain must consider these factors while developing a digital marketing strategy to outwit other competitors in the industry. What Is the Importance of Digital Marketing for Industrial Products? Going digital is the necessity of time. For example, almost 94 percent of B2B buyers conduct online research before making a purchase. Similarly, after using the correct digital marketing techniques for their industrial products, 82 percent of manufacturing enterprises increased their yearly sales within a year. This one-on-one discussion with one of the manufacturing industry's top leaders will give you a better understanding of manufacturing marketing's relevance. Marketing is VERY important to any company, although I generally see it being justified by the number of web hits or ‘leads’ that come in. - John Hayes, Director of Sales at BALYO So, small and medium-sized manufacturers (SMMs) must recognize that utilizing digital platforms is the most significant way of marketing for manufacturing companies.Effective digital marketing campaigns demand sound investment and planning. Hence, to stand out in this digital game, SMMs must review their digital marketing strategies to improve website traffic and conviction in their product on multiple digital platforms. To do so, look at the five checklists points at the top of the digital marketing trends for manufacturers. Five Priorities for Your Digital Manufacturing Marketing Plan Leading manufacturers are all getting good ROI for their industry digital marketing strategy. Let’s check out how are they doing it? Recognize the Buyer's Persona In the context of the increasing instability of the industrial ecosystem, manufacturers must better understand their target groups to develop product marketing strategies tailored to their needs. The potential buyer's digital activities also help understand the target buyer's persona through their digital activities on various digital platforms. For example, some customers prefer textual content to learn about a product, while others prefer to watch a video that explains everything in detail. So, as per the target buyer's demand, manufacturers can modify their product marketing content. It will also help you create an effective digital marketing strategy for your manufacturing company. Interact Effectively with Important Constituents To be visible in the eyes of your buyer, you must communicate with them frequently and effectively. In every industry, technology has altered the meaning of buyer communication. So, here are some of the most popular ways that all industry leaders are using to exchange information with their potential buyers. This strategy will also help you establish a positive rapport with potential buyers and stay in touch with them. Start a Newsletter: Prepare some research and conversion phase content, solution-oriented blogs, interviews, or success stories, as applicable for your company's profile. In this strategy, you must always be consistent and distinct. Create an Email Campaign: Use emails to build a more personal connection with your potential buyers. Create a buyer persona based on the interests of your target audience and segment them properly when crafting your emails. This practice will help your recipients feel recognized and involved. Use Social Media Networks to Your Advantage: Each of your buyer personas uses social media as a primary source of information. Use this platform to your advantage by developing specific techniques for staying top-of-mind among your target audience. Make the Website Content Appealing to Potential Buyers Manufacturing digital marketing content serves as a thread to draw your target buyers to your website. When the target buyer visits your website, the website content will play a critical role. As a result, every manufacturing company must have the concise, engaging, and appealing website content. Make sure that your website contains everything you require to connect with your target buyer persona. So, how do you know if your website's content is on track? Check out the list below for some key points that should be available on your website to make visitors feel valuable about your company. Key-informative content: This type of content should assist buyers in expanding their existing knowledge of your company, product, or services. It must include your brand’s story, services, product catalogs and brochures, FAQs, and solution-focused blogs. Trust-building content: This type of content encourages anxious buyers to trust your product or service, which may be entirely new for them. It includes previous buyer product reviews, client references, testimonials, buyer success stories, expert opinions, and business awards if any. User-friendly content: This is the most Crucial aspect of your website's content. As covered in the buyer persona section, buyers have diverse interests in consuming information. Some prefer to read text, some prefer to watch videos, and others prefer to consume information through CAD drawings, diagrams, or infographics. As a result, ensure that your website contains various forms of content so that each visitor is comfortable consuming what you are serving them about your product. SEO-optimized content: Ensure that your website contains your target buyers' keywords when searching for products. Creating SEO-friendly website content allows you to rank higher in Google searches and makes it easier for readers to find you. Use Marketing Automation Platform Because of the growing use of marketing automation tools, even the smallest manufacturers can now benefit from them. They're the easiest and most cost-effective way to gauge the success of your digital marketing efforts. So what benefits have you reaped from using the marketing automation software? Helps you keep track of your prospects' locations Assists you in obtaining the lead score, which tells you who your best leads are and where they originate Keep track of the conversions throughout the buying cycle with this tool As a result, the marketing automation technology helps you evaluate the return on your investment in numerous ways. Do a Competitor Analysis Analyzing your competitor's marketing strategies will help you develop sound business tactics for your next move. Competitor analysis aids you in understanding the market's demands and new prospects that you may have ignored previously. This strategic approach also aids in your understanding of where you stand in the market and what you need to come up with to stay ahead of competitors. Final Words Every buyer's attention isn't only focused on making a purchase. They also want a simple and pleasing purchase experience. Providing a delightful buying experience encourages customers to return to you for future purchases of the same or different products you have introduced. As a result, each of the checklists above plays a vital role in your potential customer's buying process and contributes to organic buyer growth. FAQs What is digital manufacturing? Digital manufacturing is the simultaneous creation of product and manufacturing process descriptions using an integrated computer-based system that involves simulation, 3D visualizations, analytics, and collaborative tools. How can manufacturers market their products? Promote your product by using various content types, including blogs, press releases, infographics, and videos. Consider event sponsorships as a way to reach a particular demographic with your brand's message. Distribute complimentary product samples to potential customers to secure bulk purchases. What is the most effective way to market a manufacturing firm? For your target groups, write and publish richer, solution-oriented content. To make your company more known to the general public, take virtual tours of your facility and create product videos to give people a better understanding of your product and company. { "@context": "https://schema.org", "@type": "FAQPage", "mainEntity": [{ "@type": "Question", "name": "What is digital manufacturing?", "acceptedAnswer": { "@type": "Answer", "text": "Digital manufacturing is the simultaneous creation of product and manufacturing process descriptions using an integrated computer-based system that involves simulation, 3D visualizations, analytics, and collaborative tools." } },{ "@type": "Question", "name": "How can manufacturers market their products?", "acceptedAnswer": { "@type": "Answer", "text": "Promote your product by using various content types, including blogs, press releases, infographics, and videos. Consider event sponsorships as a way to reach a particular demographic with your brand's message. Distribute complimentary product samples to potential customers to secure bulk purchases." } },{ "@type": "Question", "name": "What is the most effective way to market a manufacturing firm?", "acceptedAnswer": { "@type": "Answer", "text": "For your target groups, write and publish richer, solution-oriented content. To make your company more known to the general public, take virtual tours of your facility and create product videos to give people a better understanding of your product and company." } }] }

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How to Find a Suitable Contract Manufacturing Partner?

Article | December 10, 2021

The benefits of contract manufacturing are triggering manufacturers to utilize it as a strategy to speed up production and increase revenue. According to BCC Research, the worldwide contract manufacturing industry should increase from $2.0 trillion in 2018 to $2.7 trillion in 2023, a 6.7% CAGR. Given the growing demand, contract manufacturing has a long way to go in innovating new solutions for manufacturers. 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 Let us look at the benefits and concept of contract manufacturing, often known as manufacturing partners in some circles. Contract Manufacturing: Concept and Benefits Concept Contract manufacturing is a business model in which a company agreeswith a contract manufacturer to make components or finished goods based on the hiring company's design. In short, it is a business model in which one company hires another company to manufacture components or goods for them or their products. Benefits The following are some of the primary advantages of contract manufacturing that attract manufacturers to adopt this concept and find a trusted supplier to manufacture any product or part of their product without much difficulty. Cost Efficiency: In contract manufacturing, companies do not have to pay for the facility, equipment, or labor needed. Resource Allocations: The money and resources saved through contract manufacturing can be redirected towards other company operations. Faster Lead Times: Hiring a contract manufacturer reduces manufacturing time. This improves market speed, delivery time, and customer service. Quality Control: Contract manufacturers are likely to have their own quality control processes in place, which allow them to spot counterfeit or damaged products early on. Advanced Skill Sets: Companies can benefit from the skills they may not possess, but the contract manufacturer does. Contract Manufacturing Examples Here are some examples of contract manufacturing companies that offer manufacturing services to other businesses and work on full-service outside manufacturing projects. Example 1: Kimball Electronics Group Kimball Electronics Group provides a comprehensive range of electronics manufacturing services, including engineering, prototyping, testing, electronic data interchange (EDI), new product introduction, and repair depot services. Soldering, assembly, reflow, de-paneling, flux application, inspection, screen printing, testing, and rework are all processes used in their manufacturing. Example 2: Scapa Healthcare Scapa Healthcare, headquartered in Knoxville, Tennessee, provides contract manufacturing services for medical and cosmetic products. Their portfolio of products includes sunscreen, silicone medical adhesives, and innovative materials. Additionally, the organization provides development, packaging, and logistics services. Things to Consider While Selecting a Contract Manufacturing (CM) Partner You need to know how to identify the ideal contract manufacturer for your business to accelerate production and produce high-quality items. Below, we've listed some of the most important things to keep in mind while looking for an outsourced manufacturing partner for your company. Competency Understanding a contract manufacturer's (CM) capabilities in terms of logistics and fulfillment is critical. Is your potential CM able to meet shifting product demands? How to use the CM's services? You may need one or more services from CM for your product, so always examine their capabilities or develop a list of their services and see which ones are valuable for you. Knowledge or Prerequisite A qualified, experienced, subject matter expert CM always correctly understands the requirements and delivers the services as per expectations and within the time frame specified in your production schedule. Always inquire about their qualifications or certificates in the places where your product will be manufactured. Compliance Any contract manufacturing plan must have an agreement or compliance clause. Always inquire about the compliance procedure and thoroughly understand the terms and claws to avoid future issues. Workforces Verify your possible contract manufacturer's personnel count. Is it easy to talk to them? Is labor skilled enough to meet the product's goals? It is critical for large-scale production and production, requiring swift responses. Any work force shortage might cause production delays. Gear & Expertise Check for machines and equipment as well as human labor in your possible CM. Many CM lease equipment to complete a project. So always check how the CM will organize the essential equipment for your project. Expertise in using the equipment is also necessary. Verify which machines were used and whether or not professionals were involved. Whereabouts The CM's location is the main factor to check. Because the CM may have numerous plants, knowing which plant is assigned to your product is essential to knowing every aspect of its production. Also, the assembly location must allow you to visit and inspect the manufacturing between cycles. Business Stability Finding a reliable contract manufacturer with solid financial backing and market roots is essential to avoid market scams. However, you must also analyze and solve risk factors like equipment failure, supplier capacity, and unreasonable expectations. Selection Myths of Contract Manufacturing Partner Once you've produced a list of shortlisted contract manufacturing partners who meet all of the criteria described in the preceding heading, you can proceed by following the steps below to select the best contract manufacturing partner. Look for Who is Willing to Invest in Your Business Incorrect. The objective is to find a vendor prepared to manufacture at a loss. A contract manufacturer's strength is that they can stay competitive and make a profit for both parties. Focus on Tier 1 CM Partners from the Market This one is indeed not acceptable. Tier 1 is a financial phrase used to separate large corporations from smaller ones. You want a contract manufacturer who understands your business and your needs. Don't worry about the manufacturing partner's size. Go Ahead with the One Who Offers the Best Services at the Lowest Price Trying to get the cheapest quote isn't always the best idea. You should get a quote from your contract manufacturing partner, but the quote may not always reveal the complete story. Cost per unit frequently captures approximately 75% of total supply chain cost. Some contract manufacturers charge the OEM the remaining 25%. Consider the complete picture while selecting a CM partner. Final Words Manufacturers use contract manufacturing to meet their commercial goals. Therefore, contract manufacturing is a win-win situation for both industrialists and contract manufacturers. Finding the proper contract manufacturing partner for your company is not straightforward, but our brief guide can help you identify the right manufacturing partner. FAQ What makes a good contract manufacturer? The most significant contract manufacturing firms are more than just supply chain partners. They recognize and treat your items as if they were their own, are meticulous in their operations, and are concerned with quality and capital. What differentiates contract manufacturing from outsourcing? A contract is a legally binding arrangement. It involves two or more parties. For example, outsourcing is outsourcing some tasks to an outside organization under a contract agreed upon by both parties. What's the difference between contract manufacturing and licensing? Contract manufacturing only outsources production phases, while licensing is far more complex. In return for fees, a corporation sells the right to utilize its intellectual property to another company. Licenses are like franchises. { "@context": "https://schema.org", "@type": "FAQPage", "mainEntity": [{ "@type": "Question", "name": "What makes a good contract manufacturer?", "acceptedAnswer": { "@type": "Answer", "text": "The most significant contract manufacturing firms are more than just supply chain partners. They recognize and treat your items as if they were their own, are meticulous in their operations, and are concerned with quality and capital." } },{ "@type": "Question", "name": "What differentiates contract manufacturing from outsourcing?", "acceptedAnswer": { "@type": "Answer", "text": "A contract is a legally binding arrangement. It involves two or more parties. For example, outsourcing is outsourcing some tasks to an outside organization under a contract agreed upon by both parties." } },{ "@type": "Question", "name": "What's the difference between contract manufacturing and licensing?", "acceptedAnswer": { "@type": "Answer", "text": "Contract manufacturing only outsources production phases, while licensing is far more complex. In return for fees, a corporation sells the right to utilize its intellectual property to another company. Licenses are like franchises." } }] }

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Microfinancing in Uganda Works with Lean Manufacturing Precision

Article | November 23, 2021

Having recently returned from Uganda, had the pleasure of being introduced by Bernard Munyanziza of Nziza Hospitality to Gilbert Atuhire. He is the Managing Director at Value Addition Microfinance Ltd. which provides micro loans to producers and manufacturers. Atuhire is an attorney by training, however his ability to articulate the core values of Lean Six Sigma and continuous process improvement were abundantly clear. The Kampala, Uganda offices are located on Parliamentary Avenue and Dewinton Rise. This central location allows direct access to industrial projects.

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This Is How You Can Lower Your Manufacturing Overhead

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: Product materials 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. Final Words 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. FAQ 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.

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Spotlight

Mitutoyo America Corporation

The world’s largest metrology company was founded in 1934 by Yehan Numata with one product – the micrometer. Mitutoyo’s philosophy at that time was to make the best mechanical micrometer in the world. But also to produce them in quantities that made them affordable and available to all of manufacturing so they could improve the quality of the products they manufactured. This philosophy was expanded in the next several decades to include a wider product offering focused on mechanical, dimensional gaging products. Mitutoyo focused its R&D and production efforts on creating the most advanced micrometers, calipers, indicators and other measurement tools in the world.

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