Startups were originally just associated with tech, due to the scalability that digital products enables, but there is a growing movement of startups that are making physical products. It doesn’t matter whether you’re B2C or B2B, the world of manufacturing is very different to the environment that normal startups find themselves in. One such difference is that, although efficiency isn’t more important, it’s more pronounced and in many ways, waste is easier to identify. If you’re trying to get a foothold into the tough world of manufacturing, keep the following tips in mind.
- Connections Are Even More Important
Much of manufacturing is sourcing – finding the right input materials as well as the right machines can feel like an impossible task. It won’t feel so daunting if you have the right connections. Networking is vital – the more people you know, the more likely somebody is going to have the right connections to solve your exact sourcing problem. In manufacturing, finding something that is even 1% cheaper can have a significant impact on your ROI, so making sure you prioritize building a strong network of people of whom you can ask sourcing questions.
- Pivot at the Idea Stage
Pivoting is vital, but in manufacturing, there is a lot of sunk cost. In most instances these sunk costs will affect your business and pivoting won’t really be possible. As a result, you should be as flexible as you can be before you make the sunk cost investment. Look for opportunities to improve your model and run some pilot tests if you can – you will thank yourself later on.
- Get Maintenance Right
Your maintenance should be streamlined and organized as you will want to avoid problems that lead to unplanned downtime. Unplanned downtime costs manufacturers $50 billion annually according to BetterBuys’ website, so make sure you have planned strategies to avoid problems and utilize a predictive maintenance program. If you don’t pay careful attention to maintenance, your depreciation costs as well as your general maintenance costs can skyrocket.
- Explore Lean and Six Sigma
Quality control can make a huge difference when manufacturing. As you want to minimize all forms of waste, you should be looking to nail your quality control. One way that companies have managed to achieve a dramatic improvement is by lean manufacturing and six sigma processing. Six sigma processing was invented by Motorola and when it’s done correctly, 99.99966% of all products produced are statistically expected to be completely defect-free. The typical methodology for six sigma is to define, measure, analyze, improve and then control processes.
- Location, Location, Location
Your location is of the utmost importance. Delivery costs can be substantial, so you want to pick a location that is easy to deliver all manners of goods to from wherever your sourcing partners are located in your country. You also need to think about your customers – try to pick a location that’s very close to a logistics center if you are using one; if your product is measured in weight, your margins will improve substantially.