10 common manufacturing challenges your small business might encounter

5 min
manufacturing challenges your small business might encounter

Running a small business doesn’t necessarily mean that you’re facing small problems. If anything, you face many of the same challenges that medium-sized and larger enterprises encounter without nearly as many resources for tackling these challenges. 

To help small business owners better navigate these challenges, we’ve put together this list of common manufacturing challenges you can anticipate facing. This way, you can be better prepared for if and when these hurdles come up. 

10 manufacturing challenges for small businesses

1. Shortage of skilled workers

The first major manufacturing challenge that small businesses might encounter is a shortage of skilled workers. This is not exclusive to manufacturing by any means. During the pandemic, skilled worker shortages have been affecting many industries.

With manufacturing, the issue revolves around the set of workers entering retirement. According to Deloitte, 22% of the manufacturing workforce is within ten years of retirement. 

Simultaneously, the manufacturing landscape is changing. Not only are skilled workers leaving, but the skills required in this field are also evolving. 

Businesses can manage this transition by offering more robust training programs, partnering with schools to encourage young people to enter the field, and using marketing campaigns to bring in new talent. 

2. An increase in automation

Another change hurried along by the pandemic is the increased use of automation in manufacturing. With fewer workers and higher demand for products, a push for automation is only natural. 

Of course, automation is nothing new. It’s been happening for more than a century. That means businesses shouldn’t view automation as a short-term challenge but a long-term trend. 

Fortunately, automation is, at its core, a good thing. It lowers costs, creates safer and more productive workplaces, and frees up staff from menial or dangerous work. 

Small businesses can thrive during periods of automation takeover by embracing the technology and training staff to be comfortable with and in control of automation. 

3. Inventory management

One of the manufacturing challenges that the pandemic hasn’t changed is inventory management. Keeping track of your inventory, reducing shortages and surpluses — these are nothing new to the world of manufacturing. 

What is new is the tools small businesses have to address this challenge. With digital platforms and IoT systems, companies have more options at their disposal than ever before. The proper digital inventory management system can help you with purchasing, control of raw and finished goods, production planning, and order fulfillment. Brahmin Solutions offers one of the most robust inventory management systems available to small businesses and is an excellent choice for keeping track of everything in one place. 

4. Keeping up with consumer trends

Figuring out what customers want is never easy. It can be even harder in today’s global economy, given how diverse customer bases have become. 

Market research is the best way to mitigate this uncertainty. Again, market research has become far more manageable over the last decade. Most small businesses have access to software that can keep up with market trends for you. All you need to do is find the right tools for your business and put them to work. 

5. Scaling your business up (or down)

Next on our list of manufacturing challenges is scaling. This is something that every business dreams and dreads over. Scaling up poses innumerable challenges, and scaling down means you’re probably already facing a cacophony of obstacles. 

Market research can be a solid solution here. It can prevent you from overextending and help you keep in touch with your audience even as you grow. 

Additionally, businesses shouldn’t view scalability as an unequivocal “good.” Every company has a cap on how much it can grow. You should softly test these boundaries until you find the point where you start outgrowing your audience. 

6. Predicting and preparing for disruptions

Before 2020, the idea of a global, long-term, market-wide disruption to the supply chain was almost impossible to fathom. Something that could happen, but of course, never would. 

Well, now we know that “never” eventually comes, and when it does, you need to be prepared. 

While no one can entirely predict when a disruption will occur, certain tools can give you an idea of when they’ll hit. If you don’t have access to this kind of software (services like this use AI and ML, which can be expensive), then you should:

  1. Keep a pulse on the industry. You don't want to be the last person to realize that a global disruption is coming.
  2. Have a backup plan prepared now. You may not know when disruption is coming, but that doesn't mean you can't implement a failsafe today. 
  3. Diversify! Try to have a few strong product lines that don't rely on the same materials and channels. That should reduce the chance of them all failing simultaneously. 

7. Staying competitive amid rapid tech innovations

Saying that we’re living in an “Innovation Era” is putting it lightly. The world looks completely different every few years. That’s as true for individuals as it is for businesses. 

Businesses need to embrace the latest innovations or risk falling behind. However, knowing which innovations to embrace and avoid, keeping staff trained on new tech, and making the actual investments into new tech can be challenging. 

The best way to keep up with tech innovations is a two-fold strategy. First, don’t be afraid or loathe to adopt new tech. That’s a surefire way to be left behind. And second, don’t adopt every piece of new tech that comes out! Discuss with your stakeholders and staff, research, and make consistent, strategic investments in new technology. 

8. Customers have more options and information

One of the manufacturing challenges that small businesses are undoubtedly aware of is the increasing competition within the marketplace. A hundred years ago, small businesses competed with other shops in their town. Today, they’re competing with companies all across the world. 

Not to mention that customers now have access to more information. So not only can they reach your competitors just as easily as they can reach you, but they can also do way more research than ever before. This means it’s harder to convince customers that your particular product is a game-changer. 

Managing this issue will require creating more innovative products, niching down, and prioritizing customer loyalty. 

9. Increasingly strict and nuanced regulations

Regulations have grown in complexity over the years, contributing to the manufacturing challenges you can expect to encounter. Lawmakers are tightening restrictions around smart devices, software, and connectivity, and global and regional operations are becoming more of a tightrope. 

Strict regulations do generally lead to better products. On the other hand, though, they can create more risks and complications for small businesses. Partnering with a consultant service can be a great way to navigate these challenges and ensure that you’re always in the green. 

10. Globalization is changing competition in the marketplace

With the internet and the rise of door-delivered goods worldwide, people now have access to products and services at an unprecedented scale. This increased competition has led to an increase in product quality around the world. 

It’s no longer the “high-quality local business” versus the “low-grade international business.” The quality gap is shrinking, which is changing the way companies compete. 

This is why marketing has become an ever-important part of your strategy. Now, positioning your product means more market research, more marketing materials, and a narrower focus on your customer base. 

Tackle these manufacturing challenges with confidence

While you should be thinking about the manufacturing challenges mentioned in this post, you don’t have to be afraid of them.Brahmin Solutions can provide you with the tools and expertise you need to stay competitive and prepared. Reach out today to learn more.

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