Article | May 18, 2021
For twenty years as an editorial contributor to Quality Digest magazine, I have had the pleasure of authoring or collaborating more than 80 articles for the publication. During this two-decade tenure, I have worked with Dirk Dusharme (pictured left), Editor in Chief of Quality Digest.
Quality Digest’s website receives more than three million page views each year, which provide editorial content, live broadcasts, videos, and on-demand webinars presented by industry experts on international quality standards, leadership, manufacturing, metrology, statistical process control, training, and more.
Quality Digest continues its important role as companies navigate a post-COVID reality with a critical role of safety, quality, efficiency, and resiliency. Quality elements are no longer an after-thought. It is essential when examining automation, lean manufacturing, and new paradigms for best practice. During COVID, all of us became more remote savvy and the demand for visionary content and information essential.
According to Dusharme, “Since their debut almost a decade ago, Quality Digest's "enhanced" webinar events have raised the bar for the traditional webinar experience. Our audience has come to expect concise, informative, and engaging presentations with subject matter experts who know what they are talking about. Apart from the traditional quality topics, we delve into areas that broaden our audience’s knowledge. These topics range from cybersecurity, to supply chain management, to understanding and dealing with cognitive biases. Our goal is to provide up-to-date, actionable information that our audience can immediately put to use. Live video feeds of the presenters and the products, interactive Q&A sessions, surveys, and valuable downloads all make up our usual webinar experience, followed by next-day access to the on-demand recording and materials.”
Enhanced Webinars from Quality Digest feature real-time streaming video of host, subject matter expert, and a case study in action. Users can email questions, chat, or download files in real-time. This modality is ideal for visual case studies/product demos, team or customer training, and new product/new service announcements.
Article | December 23, 2021
Every manufacturing company aims to be as efficient as possible to maximize profit. However, it's difficult to determine where you stand and what targets to establish unless you can precisely measure your efficiency. Manufacturing KPIsplay an important role in this process.
Keeping track of many indicators without considering their commercial worth is a waste of time.
“Not everything that can be counted counts and not everything that counts can be counted”
- Albert Einstein
But connecting goals to measurements is a certain way to track progress and improve processes. So let's get started with how to choose the most appropriate key performance indicators(KPIs) for your business.
Manufacturing KPI 2022: How to Choose the Right One?
Why are KPIs called “Key” Performance Indicators? While any statistic can be used to assess performance, KPIs are the most critical. Hence they are called key performance indicators. Companies' priorities while selecting their company KPIs may differ substantially depending on the industry in which they operate.
“Strategic-operational KPIs alignment gives the organization a powerful tool to use when implementing change.”
― Pearl Zhu
A corporation should not track more than ten manufacturing KPIs to avoid overblowing processes. So, manufacturing efficiency, customer satisfaction, lead times, etc., should all be included.
Depending on your business nature, you must select your KPIs. However, each of those indicators must meet a set of criteria before being considered meaningful.
So, what is a decent KPI for manufacturing?
It gives objective and clear data on progress toward a certain goal
It measures efficiency, quality, punctuality, and performance
It allows for tracking performance over time
It helps in decision making
It should be the one that matches the company's long-term objectives
It has to be measurable and quantifiable
It must be realistic and actionable
Following that, let's have a look at the most important manufacturing KPIs for 2022, which will assist you in better understanding your manufacturing business and formulating a growth strategy in line with that understanding.
Most Critical Manufacturing KPIs in Order of Priority
Despite the fact that manufacturers should also monitor general key performance indicators (KPIs) such as sales revenue, net profit margin, and so on, the manufacturing business demands the tracking of specific manufacturing metrics. Below are some of the most important manufacturing key performance indicators (KPIs).
Using this manufacturing KPI metric, you can see how much value there is in products still in progress. It assists manufacturing organizations in determining how much of their working capital is locked up in incomplete products and can aid in identifying supply chain managementdifficulties.
You can compute the Work-In-Progress (WIP) by using the formula provided below.
Return on Assets
This manufacturing KPIseems to be more about financing than manufacturing. Yes, it does. However, financial measurements are just as vital as production ones. A firm cannot exist unless it generates revenue, and this indicator measures how efficiently your company uses its assets and generates revenues.
The Return on Assets (ROA) of your company can be calculated using the formula below.
Cost Per Unit
It is critical to understand the overall manufacturing cost per unit. You can't appropriately price a product without it. This manufacturing KPIdivides total manufacturing costs by the number of units produced. Materials, overhead, depreciation, and labor are standard costs.
Companies utilize this manufacturing statisticto forecast future raw material needs to satisfy client demand. Unfortunately, this statistic is more challenging to employ because it is mainly dependent on unpredictable external circumstances. The basic formula is:
The seasonal factors are distinct
Average demand is calculated as:
A company's lead time, also known as order cycle time, is an important KPI. It shows how swiftly your organization processes orders and meets client requests. It is time it takes to complete an order from confirmation to delivery.
Long lead times can imply process inefficiencies that produce bottlenecks and excessive expenses. Conversely, short lead times are important since they allow you to respond to consumer needs swiftly and efficiently.
The total lead time can be divided into smaller segments as follows:
The time it takes to manufacture a product from start to finish
The time it takes to deliver a product from stockto a client
The time it takes suppliers to deliver products to manufacturers
By segmenting the lead time, you may more precisely identify the areas where inefficiencies in the process occur.
Toyota’s Four Key Performance Metrics
As a company, Toyota places a high focus on environmental protection. Toyota's vehicles are designed to use less fuel and produce less waste.
Regardless of the company's size, Toyota is committed to protecting the environment. Toyota's 'Earth Charter' was created in 1992 as part of the company's Global Policy initiative. It was Toyota's first overseas facility and the UK's first ISO14001-certified car manufacturer. Waterborne paints were utilized for the first time and zero waste was sent to landfills. In 2009, Toyota Manufacturing UK did not use any incinerators.
Toyota has developed a set of key performance indicators (KPIs) for each of its major production areas. There are four key performance metrics: energy, water, waste, and volatile organic compounds (VOCs).
Since its start in 1992, Toyota Manufacturing UK has attempted to mitigate its environmental impact. The figure below illustrates the environmental KPIsfor the Burnaston plant. Each year, Toyota sets new goals to improve its results.
79% reduction in vehicle energy consumption
62% reduction in waste per car
76% reduction in VOC emissions per car
79% reduction in water consumption per vehicle
You can use the aforementioned manufacturing KPIsto construct your manufacturing KPI template, but keep in mind that the manufacturing metricsyou need to track may differ from those listed here. The first prudent move any business can make while examining its operation is to identify and track the relevant KPIs. Also, in manufacturing, there are several different KPIs, phrases, and abbreviations need to be understood and used where it makes the most sense.
What is manufacturing KPI?
A manufacturing Key Performance Indicator (KPI) or metric is a well-defined and measurable indicator that the manufacturing sector uses to evaluate its performance over time and compare it to that of other industries.
What are the key KPIs for manufacturers?
On-Time Delivery, Production Schedule Attainment, Total Cycle Time, Throughput, Capacity Utilization, and Changeover Time are some of the key manufacturing KPIs.
Article | December 30, 2021
Risk management in manufacturing has always been a top priority for manufacturers to avoid any unfortunate incidents. As a result, it is possible to create a more secure work environment for employees by conducting risk assessments and implementing remedies.
“If you don’t invest in risk management, it doesn’t matter what business you’re in, it’s a risky business.”
– Gary Cohn, an American Business Leader.
As of 2019, the worldwide risk management market was valued at $7.39 billion, and it is expected to rise at a CAGR of 18.7% from 2020 to 2027, according to allied market research.
Why is Risk Assessment Critical in Manufacturing?
The manufacturing industry must have a credible risk assessment and management plan to defend itself from any breaches. Risk assessment helps firms understand the dangers they face and their implications if their systems are compromised. Hence, risk assessment is very critical in the manufacturing industry.
Five Risk Assessment Principles
Identify hazards/risks - Employers must examine their workers' health and safety risks. Therefore, an organization must regularly inspect its employee’s physical, mental, chemical, and biological threats.
Identify who may be hurt and in what way – Identifying the personnel both full-time and part-time at-risk. Employers must also examine threats to agency and contract personnel, visitors, clients, and other visitors.
Assess the risks and act accordingly - Employers must assess the likelihood of each danger causing injury. This will evaluate and lower the chance at the working space. Even with all safeguards, there is always some danger. Therefore, employers must assess if danger is still high, medium, or low risk.
Get the Risks Documented - Employers with five or more employees must record the critical findings of the risk assessment in writing. In addition, register any risks identified in the risk assessment and actions to minimize or eliminate risk.
This document confirms the evaluation and is used to examine working practices afterward. The risk assessment is a draft. It should be readable. It shouldn't be hidden away. The risk assessment must account for changes in working techniques, new machinery, or higher work objectives.
5 Manufacturing Risks to Consider in 2022
Accidents at Work
Even if official safety policies and programs are designed, followed, and enhanced, manufacturers may endure workplace accidents and injuries. Risk assessment for workplace accidents assists in mitigating the negative impact on both employees and the organization.
Manufacturers have distinct issues regarding fuel handling and hazardous waste disposal in facilities. Sudden leaks or spills may be extremely costly to clean up and result in fines from state and federal agencies. Risk assessments for such plant accidents assist businesses in mitigating financial losses.
Essential machinery throughout the production process might fail at any time, incurring significant repair or replacement costs. Therefore, it's critical to recognize that business property insurance may not cover mechanical issues.
Risk assessment and prepayment solutions protect against equipment failures without interfering with typical company operations.
Supply Chain Disruption
Dependence on your supply chain may result in unintended consequences that are beyond your control. For example, if you experience downtime on the manufacturing line due to a supplier's failure to supply materials or parts, you risk losing revenue and profitability. If a disturbance to your supply chain poses a hazard, risk management can assist you in managing it more effectively by quickly identifying the risk and providing a suitable response.
Operation Temporarily Suspended
Depending on the severity of the weather event, a factory might be severely damaged or perhaps utterly wrecked. While major repairs or rebuilding are being undertaken, recouping lost income might be vital to the business's future profitability.
Risk assessment in this area enables your organization to budget for overhead expenditures such as rent, payroll, and tax responsibilities during the period of suspension of operations.
Risk management is critical in manufacturing because it enables manufacturers to comprehend and anticipate scenarios and create a well-planned response that avoids unnecessary overhead costs or delays in delivering the production cycle's final result. Manufacturing risks are undoubtedly not limited to the risks listed above and may vary according to the nature of the business and regional environmental conditions. Therefore, create a well-defined strategy to overcome threats in your business and be productive at all times.
How are manufacturing business risks classified?
In most cases, the business risk may be categorized into four types: strategic risk, regulatory compliance risks, operational compliance risks, and reputational risks.
Why should a manufacturer conduct a risk assessment?
Every manufacturing employment has risks for injury or illness. But risk evaluations can significantly minimize workplace injuries and illnesses. In addition, they assist companies in discovering strategies to reduce health and safety risks and enhance knowledge about dangers.
Article | April 6, 2021
Inbound marketing has become a vital part of the manufacturing industry, especially after the pandemic. Marketers want to get more business, more high-quality leads, increase revenue, and expand it into new markets. A lot of opportunities are arising for manufacturers to embrace its effectiveness—especially online.
Unlike other industries, the manufacturing industry is not safe from the continual pendulum swing of updates, new platform creation, and changing buyer preferences. Manufacturing marketing has its own blend of deliverables and initiatives that can spell the success of your business.
Until now, you must have realized that your traditional marketing tactics are obsolete and would have planned to get the inbound marketing program off the ground.
Here comes the critical part—understanding how to implement inbound marketing for your business to generate high revenue. With the help of these five steps, you can stay ahead of your competition.
Before you approach the steps, first you need to:
Identify your Customers’ Pain Points
Understanding what frustrates your buyers gives an insight into how to answer the queries they look for. To determine what queries your buyers may have, you can:
Interview your customers: Your customers are your leading source of information. Ask them what solutions they are searching for. What content did they read to solve their solutions? What information, insights, FAQs, or product details can help them? This way, create content that answers all of these questions.
Talk to your sales representative: Your sales team is on the front line with your buyers/customers. They very well know what content gaps can be filled. Identify the gaps and work accordingly.
These considerations will help you to stay updated in the competitive landscape of manufacturing marketing.
Now, start your inbound marketing program by following these steps.
When planning inbound marketing, your website becomes the center of the universe. It’s where all your marketing efforts, like great content for your prospective buyers come in. After all, this is how you’re going to start ranking on search engines and driving in leads.
Before you get to this part, you’ll need to do a basic audit to ensure your website is in tandem with your targeted audiences’ expectations.
The website interface is the focal point that helps buyers to interact. This will help them to interact with your business. And if their experience is negative, they’ll probably never bother to read further. To avoid such circumstances, here are a few critical web design tips you should know and implement:
A Clean Look
Keep your website simple and embrace spaces to make it more appealing to the eyes. Too many visuals and color combinations will make it hard to find the information they’re searching for. Creating a simple yet appealing website neither costs your pockets nor makes it hard for your audiences to contact you.
Tablets and smartphones have overtaken desktop computers. So, creating a mobile-friendly design will ensure your website looks impressive on any screen size. Your audience does not feel lost, and it helps to scroll information from your website.
Move from HTTP to HTTPS
With massive data breaches becoming common in the internet world, your audience will be more concerned with security and privacy than ever. Converting your website from HTTP to HTTPS will protect their information. Also, it will help you get ranked on the Google search engine.
Create Informative Content
Content is the backbone of inbound marketing efforts. It’s how you can build a strong audience base for your business and convert them into leads.
To market your business effectively, you need to provide informative yet relevant content at every stage. Think of creating a blog to inform rather than a sales tool. With this notion, your content will rank and stay on top of the mind throughout your customers’ buyer journey. This means your industry-related content has to be interesting and attract visitors to become your leads.
To understand how your content needs to work, list these funnels of content ideas and try implementing them.
Content Ideas: Top Funnel
Include content in these ways:
Social media posts
Videos on factory products tour
Content Ideas: Middle Funnel
While the top of the content funnel is the widest, the middle of the funnel is often the deepest. It includes content type such as:
‘How to’ guides
Content Ideas: Bottom Funnel
The bottom funnel creates chances to close the deal and convert visitors/buyers into leads. This includes content ideas such as:
Call to action
So, in the marketing competition landscape, many manufacturers are busy updating their inbound marketing strategies like you. Many others have overhauled their business. While you have a lot on your end, inspire yourself to create that excellent piece of content now!
Invest in Marketing Technologies and Automation
One way to grow your business through inbound marketing is automating your marketing efforts. This way, you can devote more time focusing on the bigger picture. There are tons of tools online to help organize strategies, create content, schedule emails, campaigns and publish to your website. Use them!
Marketing technology usage can help your business to operate faster and more accurately. Here are some automation tools to use:
G Suite: Google’s products are becoming just ubiquitous with a bonus—everything is in the cloud today. You can find your work easily and access it from any device. Also, manage all marketing efforts from one place and collaborate globally in no time with clients.
Sales and Marketing CRM: Customer Relationship Management (CRM) software, like HubSpot CRM, gives you a quick view of your marketing funnel and sales channel. Not only does it enable transparency all across, but it gives you hours back in the day by starting different events and marketing flows automatically.
Email Marketing: Emails are the most effective marketing channels in terms of ROI. Email usage endures growing around 4% year-over-year. And has no signs of slowing down anytime soon. In this case, many emailing tools are available. Like HubSpot is well known for its CRM and inbound marketing software. It boasts exceptional deliverability for emails. With about 2,000 email sends/month, contact lists, a drag-and-drop email builder, and ready-made templates, you can start right away.
These are some examples to decide what's best for your industrial inbound marketing efforts. Get started today!
Keep Tracking your Marketing Efforts
You’re spending your time, energy, efforts, and resources on marketing to grow your business. So, it’s essential to track your marketing initiatives and see if it’s functioning as expected or not.
Here are some crucial aspects with which you can keep track of your marketing program:
Get an ROI measuring tool:For measurable goals, you’ll want to select KPIs to measure ROI. Some common ones include the cost per sale, per lead, overall marketing program, and overall customer relationship length. You can also set points for channel performance with campaign-specific KPIs, including email open rate or social media impressions.
Google Analytics:This is a free tool. It will help monitor your website's health by tracking site metrics such as page views, visits, and clicks. With this, you can easily set up customized reports to monitor specific metrics of interest for your campaigns.
Lastly, get a lead generation tool that tracks who is in-market for your services. How they’re interacting with your online presence and where they are in their solution journey.
Inbound Marketing Case Study: Get Inspired!
If you ask your competitors what their main goals are for their company, the answer would most likely be related to increasing sales and leads. Even if they mentioned other purposes, such as improving website performance and SEO or redesigning a website, the main objective would be to get more traffic. And it will lead to more sales.
For Corrugated Metals, Inc., these were the goals. This manufacturing company deals in roll formation. It manufactures products for the equipment, construction, transportation, and defense industries.
The company used inbound marketing strategies during the pandemic and found success with it, resulting in:
Increased quality leads
Increased sales revenue
More opportunities from the manufacturing industry for long term sales potential
Redesigned their website to bring design and UX (user experience) up to date and increase engagement
Maintained and increased SEO
Through the implementation of inbound marketing, the company saw a 198% hike in website traffic and an implausible 285% increase in leads. But that wasn’t all. The quality of leads radically improved by 321%.
Since they were able to identify and target long-term sales prospects through persona-based targeting and lead nurturing, they lined up a potential million dollar per year customer. This created a possibility of 20 years of recurring sales.
In a nutshell, using these inbound marketing tactics can bring high revenues to your business.
1) PLAN! Do as much research as you can. Know your industrial customers. Find what’s trending. Analyze what worked, what didn't work, and why. And start with these ways to boost marketing for your business.
2) CREATE! Use the information as the backbone to create a stellar inbound marketing plan. Be patient, and do one project at a time.
3) OPTIMIZE! There are ways to improve. And if you’re testing correctly — no industrial marketing strategy will ever fail.
In a recent 2020 Thomas Industrial Survey, there has been a 12% surge in website usage by manufacturers using inbound marketing campaigns to connect with more buyers and customers since the outbreak of COVID-19. Therefore, adjusting your manufacturing inbound marketing strategies today will perhaps help you win more business down the road.
Frequently Asked Questions
What manufacturers should follow to do inbound marketing?
Manufacturers implementing inbound marketing should follow some crucial aspects before they start. These attract customers—don’t interrupt them, measure all activities, nurture leads, do SEO and social media activities precisely.
What are the four stages manufacturing marketers should know about inbound marketing?
There are a lot of relatable things to do inbound marketing. But along the top four things, manufacturers must know to drive business growth are attract, convert, sell and create leads.
Does inbound marketing for manufacturing works?
Absolutely. Inbound marketing for manufacturers has been fruitful. If you are willing to include it in your business, you will reap its benefits and see your business growing with time. Creating a proper strategy is foremost.
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