Usually, when you think about things like production planning, you imagine that it’s something big companies do. Many people believe that it’s only when you have dozens of machines, huge factories, and hundreds of employees that you need production planning – or production planning software.
However, usually, the opposite is true. Here’s why.
Equipment Capacity Constraints
One of the main reasons small manufacturing companies need to take extra care with production planning is that they have much tighter capacity constraints than large companies.
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Where their large competitors may have several of a particular kind of machine and can absorb delays from breakdowns or similar, small businesses might only have one, and any technical problems could cause a serious problem.
Smaller Teams
Another issue many small manufacturing companies face is that they don’t have the extra manpower to ramp up production if things fall behind. Bigger companies might be able to bring on another shift to accelerate manufacturing when they are behind with an order, but most small companies can’t afford to have excess trained staff available for that.
Cash Flow Management
The next big issue for small manufacturing companies is not on the shop floor – but instead in the accounting office.
Smaller manufacturing companies might not have the savings and cash reserves their larger competitors do. This means that they need to be extra careful when managing cash flow to ensure that they complete jobs on time and get paid as planned. When they have laid out money or put raw materials on their own accounts, there’s only a small window to get that order done and out of the door before carrying those costs eats into profits.
Many smaller businesses are just a few delayed orders away from financial trouble, so this is critically important.
Management Challenges
Most bigger corporations and companies have a lot of executives and managers working to keep the wheels turning. Smaller manufacturing companies usually only have a few, and when things get busy, they might not have enough time to get everything done. At least, not to the standards they usually do.
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Having clear production management processes and tools makes it easier for small teams to get things done, while still maintaining quality, safety, and other important factors.
Not to mention that when managers and supervisors are not overworked and are supported in getting their jobs done, they’re more likely to stay in their jobs. Employee retention is even more important when you’re running a small business.
Fewer Resources Demand Better Management
If you’ve noticed a pattern so far, you’re not wrong. Small manufacturing companies need better production management methods and tools because they have fewer resources to throw at problems. Whether it’s people, equipment, money or time, smaller companies have to do more with less. That means ensuring that your processes are tight and followed carefully, that you use your resources well without waste, and that you keep your finger on the pulse all the time.
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