For many servicemen coming into the private sector, manufacturing is a natural fit. Serving in the U.S. military requires the same rigorous attention to detail, results-oriented thinking, and action that makes raw materials into finished products and gets them out to customers all over the world.
If your business revolves around manufacturing, supplying, or distribution, you know how rapidly these chains need to move in order to compete in a global economy. The problem that many businesses face is that they are so myopically focused on ingrained methods and simply trying to keep the lights on that they are unaware of ways they can economize, reorganize, and upgrade. This includes exploring business financing options such as the Patriot Express® Line of Credit.
Whether you are new to this venture, or you've been doing it a long time, your outfit could be lagging in the productivity department without your knowing it. Maybe your communication with customers or suppliers is inconsistent, causing orders to be delayed, or your turnaround time is generally too slow. These are problems that can cause you to lose customers to a competitor.
Thankfully, there are some ways to tighten up the structure and procedure with regard to inventory so that your link in the chain as strong as it can be and you can meet demands as they continue to grow. Here are some suggestions that can get your machine running more optimally.
1. Reexamine the software you are using to track your inventory.
Legacy technologies and out of date software are a big obstacle in manufacture and supply because owners and operators are often set in their ways. They don't want to slow or stop workflow in order to move over to something that might increase efficiency, but might cost a bundle in the time it takes everyone to get up to speed. The thing they don't realize is that the management software designed for manufacturing is much more intuitive – in fact, its main sell is that it minimizes migration and adoption and quickly makes up the difference through automation and customized visibility.
Here's a really good rundown on small business software that can illustrate some possible way to solve common inventory issues.
2. Crunch the numbers on big expensive equipment that proclaims to double your profits.
In a study conducted by Georgia Tech, cash management was among the top five reasons manufacturing businesses fail. If one expensive piece of equipment doesn't make good on its expenditure within the necessary timeframe, you may not be able to afford to run it. A cost analysis is imperative with big equipment investment.
3. Incentivize customers to tighten their payment schedule.
Cash flow is a challenge because many operations run on Net 30 or 60, so knock a little off the top if they pay by the 15th. It assures your customers that they are getting a little savings, and you keep that infusion of cash coming in.
4. Don't overbuy.
Some companies get excited when they watch their profit margins go up without realizing its a "flow" in the ebb and flow of their businesses. This leads to overbuying and hanging onto stock too long. When you go to take the next step in order to grow your business, monitor your average sales over a good period of time and compare your inventory's time on the shelf in order to balance your purchases against your sales. Again, there are digital tools out there like Syspro and Oracle Netsuite that can track and generate reports to enable reasonable purchasing habits.
5. Make sure you have adequate capital when it's time to scale up.
That same study suggested that many businesses start out underfunded and run on too tight a shoestring. When your business can support more employees, your network needs a major upgrade, or you need a larger plant or warehouse, it's probably time to seek out a capital infusion. Learn more about StreetShares business financing options here. Choose from a business term loan, the Patriot Express® Line of Credit or account receivables financing.
Download the Small Business Financing ebook
It's important to know that as a veteran of the Armed Services, you have access to small business resources that can take the strain off daily operations and help you solve big-picture problems. It takes money to make money and when it comes to something as complicated as manufacture and supply, it can be difficult to parse wise spending. StreetShares has a small business financing ebook that can help you determine your business priorities and needs, develop a long-term strategy for growth, and access funding in order to make your company successful and profitable. To access the ebook, click here.