Understanding Scaling Up In Manufacturing And Why It Is Important

Scalability Manufacturing

As the owner of a manufacturing business, you shouldn’t have a fear of success – you should be planning on scaling up your manufacturing from day one. Planning on how to do this depends on the type of products you manufacture, but one thing you can plan for is finding the right manufacturing partner that will have the capacity to help your business grow or scale back, if that is what is deemed best.

 

In this article we will explore the importance of being able to scale manufacturing and how this ability not only helps your business when times are good but also when times are bad. We will also cover the difference between scaling up manufacturing operations and capacity building as well as the value of scalability to a manufacturing operation and how this will bring you into more contact with others to help grow your manufacturing business.

 

The Difference Between Scaling Up and Capacity Building

 

When defining capacity building in manufacturing, it is crucial to differentiate between scaling up and capacity building. Scaling up and capacity building are different methodologies, but they do share some common ideas. To scale up your manufacturing business requires a philosophical change in the mindset of your business: you must adopt a new attitude towards change management and begin thinking like an entrepreneur; this adoption of scaling up can work for any size of business, small medium or large organizations. 

 

So, what is the difference and why should I lean more towards scaling up? According to Thomasnet: “By definition, the difference between scaling up and capacity building is that in the latter, a company is expanding its ability to manufacture more to meet a higher demand. On the other hand, scaling up is the ability to manufacture to meet market demand — in other words, the ability to scale up or scale back without great cost or risk to the organization while maintaining margins. Scalability, when applied to manufacturing, is the ability to reconfigure manufacturing systems, allowing production capacity to be quickly adjusted to abrupt changes in market demand while maintaining cost efficiencies.”

 

In short, with scaling up you shouldn’t be planning to just reach higher demand, you should be scaling up your business to reach more market demand.  This demand may be up or down, and the ability to scale in either direction without the burden of risk to your bottom line should be the goal of all businesses, not just manufacturing. With capacity building, one runs the risk of overproducing for a market when economic times are strong, and when the demand goes down, they are stuck with products they can no longer sell in a hard market. The best manufacturing businesses who model themselves on being able to scale up or down never get caught in this trap. 

 

The Value of Scalability

 

The demands of markets are never static; you have to be able to roll with the trends if you wish to maintain growth and profitability. As your manufacturing operation becomes larger, your primary direction will of course be to meet the demands of your market and customers.  However, the complication in the course of this action is that demands of the market never are the same, they are constantly in flux: interest in your business, new products and the availability of materials to meet the demand of your product will all affect the scalability of your manufacturing production. Therefore, if you wish to stay aggressive in the face of these conditions, your manufacturing operation will have to be able to change the model in terms of scalability to meet the demands of the current market.

 

Being able to scale also means you will almost certainly be working with more resources that affect your business: more data, more material sources, more contractors. Having a business to scale, or a partner that can help you meet the demands of your customers, will provide you with efficiency and allow you to gain a better reputation for your business and relationships with your clients. 

 

Scalability and Your Supply Chain

 

Scalability for your manufacturing operation will also be crucial when it comes to one of the most important aspects of your business: your supply chain. How will you be able to manage production of your manufacturing operation when you have shortages and delays in your supply chain? This means more than just putting the sole focus on your internal operations; Your supply chain partners will play key roles in determining the flexibility and scalability of your manufacturing operation. To ensure you can scale your operations correctly will mean assessing whether or not your supply chain partners can meet your growing demand. Asking questions and providing long term thinking with your due diligence will aid you in determining if your supply chain partners are able to scale their operations along with yours. 

 

Working with a Nearshore Manufacturing Partner

 

If all of this sounds too daunting or time consuming and you wish to be able to spend more time concentrating on your manufacturing operation, you can work with a nearshore manufacturing partner like NovaLink. NovaLink has helped many manufacturing operations scale their operations from small operations to large ones, as well as scaling back operations that need a smaller workforce when the seasonal demand for their product is not as great.

 

In the case of Turtle Fur, a manufacturer of cold weather accessories, Turtle Fur needed manufacturing garment production, but required the manufacturing output and labor pool to scale up and reduce for their seasonal production (an increase/decrease of 20% depending on the seasonal runs). Keeping a large labor crew all year round was not profitable. In addition, Turtle Fur needed the labor crew to be able to work on several different types of products based upon demand, and not have anyone working on the line as a “specialist”.

 

NovaLink was able to deliver Turtle Fur’s greatest need, flexible staffing, immediately. NovaLink was able to provide them with cross-trained staff in the 20% increase/decrease as they needed for demand and seasonal production runs. The cross-trained staff provides Turtle Fur the flexibility to move labor between production lines (sometimes daily) depending on demand: the same core group of staff makes knitted hats, electric socks, neck warmers for skiing, gloves, and children’s mittens from the same production line. The staff adaptability, coupled with the easy access to market from Mexico, guarantees Turtle Fur on time delivery for their seasonal sales period.

 

As a result of this production flexibility, more orders for Turtle Fur products are coming from online sales rather than retail; the flexible staffing allows Turtle Fur to increase production on products as demand increases through ecommerce. Turtle Fur doesn’t have to hold inventory for different retailers; they can produce as needed.

 

Conclusion

 

You should be planning to grow your manufacturing from day one. But you should also have a manufacturing partner that will have the capacity to help you business grow or scale back, if that is what is deemed best for your business. 

 

Supported by over 30 years of experience, NovaLink has provided shelter or contract manufacturing services to a variety of industries. NovaLink would make the perfect manufacturing partner to grow and scale-back your company operations. 

 

Do you need a nearshore manufacturing partner or solution for your business?  Contact NovaLink today: 956-621-7362 or visit our website: www.novalinkmx.com

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