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Cost-Cutting Strategies: How Virginia’s Micro-Manufacturers Can Thrive Financially

In the fiercely competitive manufacturing sector, micro-manufacturers are often left grappling with financial sustainability. The domination of large industries leaves these smaller entities under tremendous pressure, making cost reduction in manufacturing not just an option but a critical survival strategy. Read on to equip yourself with practical, implementable financial strategies to enhance profitability and overcome the burden of overhead costs. Here’s how to thrive among the giants.

Young factory worker holding presentation about cost cutting strategies to company managers

What Are Micro-Manufacturers?

Micro-manufacturers, known as “Emerging Manufacturers” by GENEDGE, are small-scale manufacturing businesses typically with a workforce of 20 employees or less. These entities specialize in producing niche or customized products, often operating with a lean business model. 

Their small size allows them to be nimble, adapting quickly to market changes, and their focus on specialized products often fills gaps in the market that larger manufacturers may overlook. Despite their smaller scale, their contribution to the economy and innovation in the manufacturing sector is a formidable force.

Connect Costs to Strategy

When you are managing a small manufacturing business with less than 20 employees, not all costs are created equal. That’s why you need to know the difference between costs that directly contribute to your competitive advantage and those that do not. These are known as strategic and non-strategic costs, respectively.

Operations optimization for Virginia manufacturers

What are Strategic Costs?

Strategic costs make your product or service unique and greatly contribute to your value proposition. Investing in these areas can improve your overall profitability, even though it might not seem like cost reduction in the typical sense.

What are Non-Strategic Costs?

On the other hand, non-strategic costs are areas where you can cut back without compromising on the quality of your product or service. Identifying and minimizing these costs is a surefire way to increase your Virginia manufacturing profitability.

Here’s how the CEO of Frito-Lay did it.

Take the case of Roger Enrico, former CEO of Frito-Lay. He was faced with an increasingly competitive snack food market and rising costs. Enrico strived to separate strategic and non-strategic costs, investing heavily in areas that gave Frito-Lay a competitive edge, like product development and marketing, while cutting costs in less critical areas. This approach reduced overhead costs, maximized micro-manufacturing savings, and enhanced Frito-Lay’s market position.

Implement Lean Manufacturing Practices

What is Lean Manufacturing?

Lean manufacturing is a systematic approach to identifying and eliminating waste in the manufacturing process. It aims to streamline operations, improve quality, and increase overall productivity. Originating from the Toyota Production System, lean manufacturing centers on continuous improvement, or Kaizen.

Lean manufacturing consultants for manufacturers

It all revolves around Kaizen.

Kaizen encourages manufacturers to perpetually seek ways to refine their operations, promoting a culture of continual learning and improvement. This lens of constant scrutiny often reveals opportunities to eliminate wasteful practices, leading to reduced manufacturing costs.

Implementing lean practices allows micro-manufacturers in Virginia to increase their efficiency, leading to significant micro-manufacturing savings. By reducing waste, these manufacturers can lower overhead costs, increase production speed, and improve their bottom line. GENEDGE can help by providing in-person training and shop floor implementation consulting services in the following areas:

  • Lean Principles
  • Six Sigma Problem Solving
  • Value Stream Mapping
  • Kaizen/Rapid Improvement Events
  • 5S Training/Implementation
  • Kanban/JIT Material Flow
  • Setup Reduction/SMED
  • Total Productive Maintenance (TPM)

Click here to request an assessment!

Optimize Inventory Management

Improving the accuracy of inventory records, reducing held inventory, and increasing turnover are strategies that can lead to big savings that can keep micro-manufacturers ahead. Here’s some quick-fire tips:

Reduce your held inventory.

By trimming down your inventory levels, you mitigate the risk of obsolescence, decrease storage costs, and free up capital that can be invested elsewhere in your business.

Inventory management solutions for Virginia manufacturers

Get more accurate.

Meticulous tracking and updated inventory records prevent overproduction and stockouts, saving both time and resources.

Increase your inventory turnover.

A higher inventory turnover rate implies you’re efficiently selling the product without holding onto excess inventory, lowering carrying costs and boosting cash flow.

Increase Workforce Productivity

Boosting workforce productivity is another effective strategy to cut costs in micro-manufacturing. A motivated, skilled, and efficient workforce reduces labor costs and enhances overall productivity.

Enhance your employee engagement.

Creating an engaging workplace environment inspires employees to perform at their best. It increases satisfaction, reduces turnover, and fosters a culture of excellence. Read more about how micro-manufacturers can retain their workforce in our blog!

training for manufacturing workforce development

Invest in training.

Regular training equips your employees with the latest skills and knowledge, enhancing their performance and efficiency. It’s an investment that pays off in long-term productivity and quality improvements. Learn more about GENEDGE’s online and in-person training sessions to upskill your employees.

Implement performance management systems.

Performance management systems help evaluate and manage employee performance, aligning individual goals with the company’s objectives. This leads to improved efficiency, higher productivity, and, ultimately, significant cost reduction in manufacturing.

Outsource Non-Core Functions

Outsourcing non-core functions involves delegating tasks that aren’t fundamental to your core business operations, such as IT, HR, or accounting, to specialized external agencies. This strategy frees up more time and resources for you to focus on core competencies that directly influence your competitiveness and profitability. Also, outsourcing can lower overhead costs and increase operational flexibility, allowing your business to better adapt to the ever-changing market dynamics. Overall, outsourcing non-core functions is a viable financial strategy for Virginia’s micro-manufacturers aiming to thrive financially.

Make the Move to Financial Success with GENEDGE

By knowing the right financial strategies for manufacturers, you’re well on your way to growing and turning a profit. These are important components of your business plan as you determine how to cut costs meaningfully, operationalize, and grow. Read GENEDGE’s success stories or contact us today to get started.

From Production to Profit: Proven Strategies for Small Manufacturers to Win Customers

How does a small manufacturing business grow? 

Through its customers. 

But when you’re a small manufacturer finding your way through the bustling corridors of the industry, it’s not a walk in the park. Much like an eager tourist in a foreign city without a working GPS, it’s exciting, overwhelming, and, let’s be honest—it’s pretty easy to lose your way. Let’s run down some of our customer acquisition strategies through each step in the supply chain in this small business manufacturing operations guide.

Download Infographic: Process Improvement in 8 Steps

Planning: Forecast, Set Goals, and Budget

  • Detailed Financial Forecast: Like a trusty weather report, a detailed financial forecast can help you navigate any upcoming financial storms. It’s about estimating future sales, costs, and profits to ensure you’re financially prepared for the journey ahead.
  • SMART Goals Setting: SMART stands for Specific, Measurable, Achievable, Relevant, and Time-bound. It’s like a personal trainer for your business—pushing you towards realistic, achievable goals while keeping you accountable.
  • Getting Lean Manufacturing Consultant: Just as athletes have coaches, businesses have consultants. A lean manufacturing consultant can provide expert advice, guiding your small business manufacturing operations toward success.
Small business manufacturing operations guide

Sourcing: Building Supplier Relationships

Click here to Download Proven Strategies to Win Customers
  • Vet Thoroughly: Just as you’d do a background check on a new employee, always vet your suppliers thoroughly. Check their track record, financial stability, and customer reviews. Foreknowledge is your best weapon.
  • Nurture Relationships: Treat suppliers as partners. Regular communication, respect, and fairness can go a long way in building solid and reliable alliances.
  • Diversify Your Supplier Base: Don’t put all your eggs in one basket. Diversify your supplier base to reduce dependency on a single supplier. It’s a smart move, just like diversifying your investment portfolio.

Production: Upgrading Your Transformation Process

  • Chase Strategy: This strategy, developed by JPMorgan Chase Banks through the SWOT Model, is all about staying in sync with consumer demands. It’s about making more products when the demand is high and less when the demand is low. It’s an excellent option for businesses with perishable or seasonal items.
  • Make-to-Stock: In this strategy, you manufacture items based on anticipated customer demand. You prepare products for future sales and keep them in warehouses until they’re purchased. 
  • Make-to-order: This is all about customization. You only start producing items after customers have placed an order. It’s a beneficial strategy for products that require a high level of personalization and for items that can be assembled quickly. Read the case study on this strategy used at Dell Corporation.

Delivery: Getting Products to Customers 

  • Efficient Packaging: The first impression matters. Efficient packaging protects your product during transit and provides a delightful unboxing experience for customers. Think of it as the wrapping paper for your customer’s gift. E-commerce giant, Amazon, sports efficient packaging with 100% recyclable materials and optimizes the size of the package to match the item to create less waste. At the same time, it ensures an easy unboxing experience for customers.
  • Reliable Shipping Partners: Your shipping partner is your ally in ensuring the timely and safe delivery of products. Choose partners with a proven track record and excellent customer service. It’s like choosing a relay race teammate.
  • Tracking and Updates: Provide customers with a way to track their orders. Regular updates about the transit process can alleviate customer anxiety and show that your business values transparency. It’s your way of saying, “We’re on it.”
custom solutions for manufacturing company

Returns: Handling Post-sale Issues

  • Clear Return Policy: Spell out your return policy in clear, easy-to-understand language. It’s like your rulebook, giving customers a clear understanding of what can be returned, how to do it, and within what timeframe.
  • Hassle-free Returns: Make the return process as easy as possible for customers. Consider providing free return shipping or a prepaid return label. Think of it as your peace offering to dissatisfied customers.
  • Prompt Refunds: Once a return is received, process refunds promptly. It’s like a rapid response team, helping to soothe any customer dissatisfaction.
Industrial Business Growth Consulting

Implementing the Strategies

Having a strategy is one thing, but implementing it effectively is another. It’s essential to have a comprehensive implementation plan that details each step of the process, assigns responsibilities, and sets timelines. Regularly review your strategies with a consultant and adjust as necessary to meet your business goals.

Do it with GENEDGE

At GENEDGE, we specialize in providing growth strategies for manufacturing companies and guidance to small and midsize manufacturers. Lean manufacturing is not just about reducing waste or streamlining operations; it’s about creating a culture of continuous improvement, boosting productivity, improving product quality, and ultimately enhancing customer satisfaction. 

Interested in taking your manufacturing business to the next level? Contact GENEDGE today and explore how our specialized consultants can support your growth ambitions. Or, take the first step with an in-depth assessment of your business operations, supply chain, or energy management HERE.

How Small Shops in Manufacturing Can Improve Welding Worker Loyalty

In the challenging and competitive world of small business manufacturing, one key to success is building a loyal, skilled workforce, particularly in specialized roles like welding. Employee loyalty contributes to productivity, quality control, and overall business stability. This is especially important in the context of small manufacturers in Virginia and beyond. Let’s explore ways to foster an environment of loyalty and commitment among your welding staff and how online training and workforce development can play a vital role in this process.

Getting Down To the Root of Turnover

Before addressing the issue of employee loyalty in our small business manufacturing operations guide, it’s critical to understand why employees leave in the first place. Is it a matter of better compensation elsewhere, lack of job satisfaction, or minimal opportunities for growth and development? Small manufacturing businesses should perform regular employee engagement surveys to gain insights into these issues.

As we move into 2023, the echoes of the Great Resignation continue to reverberate. Employee turnover remains a daunting challenge for the manufacturing industry, with a staggering 50 million people quitting their jobs in 2022 alone, more than the previous year. Last year’s manufacturing rate was a striking 39% (virtually the same as 2021), yet still on the rise in general. This mass exodus has left manufacturing leaders with a pressing concern: “How do we keep our talent and ensure our business’s success in the coming years?”

Infographic of Strategies for Sustainable Growth
Click here to Download Strategies for Sustainable Growth

Welder Demographics and Statistics

According to this 2021 research analysis by Zippia, these statistics can explain why certain members of your welder team may be more prone to quit than others. Representation and location are large contributors.

  • The United States currently employs upwards of 402,333 welding professionals.
  • Women comprise 6.1% of all welders, with men representing the majority at 93.9%.
  • The median age of welders is 40 years.
  • Houston, TX, boasts the highest demand for welders.
  • The automotive sector offers the most lucrative opportunities for welders.

Strategies for Sustainable Growth

In the face of these challenges, small business manufacturing operations can implement several strategies to promote sustainable growth and employee retention. 

We list them here below –

Cultivating a Positive Workplace Culture

Cultivating a positive workplace culture is about creating an environment where employees feel valued, appreciated, and involved.

When it comes to welders, fostering a positive work culture requires a tailored approach due to the nature of their work. Welders need to feel physically safe in their work environment, and their unique skills should be recognized and appreciated. 

Online training workforce development

Competitive Compensation and Benefits

This strategy is pretty self-explanatory. Offering competitive salaries and benefits is critical to ensuring your talented welding workers stay for the long run. 

Small manufacturers should benchmark their compensation packages against industry standards to ensure their offerings are competitive. As of 2023, the median salary for a welder in Virginia is $22.84 an hour in Virginia.

Here are a few tools you can use for this purpose: 

Opportunities for Growth and Development

Investing in employee growth and development shows that you value their career progression. This could involve offering online training and workforce development opportunities, enriching their skills, and increasing their value to the business.

For more insights into workforce retention, tune in to EPISODE 9 of the Manufacturing Now Podcast, available on our website. This enlightening discussion features industry veteran GENEDGE Business Service Director of Operations Bert Eades and Scott Schein, COO of GENEDGE, sharing their strategies for workforce retention in the manufacturing industry.

Registration is currently open for Bert Eades’s 6-Course Leadership Class, which dives deep into the core tenets of leadership and learning how to navigate, inspire, and drive growth within your manufacturing company. The course, running from January 10, 2024, to March 20, 2024, is perfect for mid-level managers and supervisors aspiring to further their leadership roles. It provides an intimate learning environment with a class limit of 20 participants and is priced at $1,500 per person.

manufacturing workforce development

Engagement and Involvement

Actively involve your welders in safety protocol development and continuous improvement processes. Soliciting their input on equipment selection or workspace layout like ventilation can enhance their job satisfaction, as it directly affects their daily work. Regularly hold team meetings where they can voice concerns or suggest improvements. Always keep your team in the loop.

Work-Life Balance

In the welding industry, finding a work-life balance can seem challenging. It could include implementing flexible shift schedules to accommodate welders’ personal lives or arranging for rotation duties to avoid burnout from repetitive tasks. Also, paid time off (PTO) lets welders rest and rejuvenate, ensuring they return to work with renewed vigor and focus.

Communication

Open and transparent communication is key to building trust and loyalty. In welding, where precision, safety, and efficiency are vital, ongoing communication can significantly enhance operational understanding, foster a culture of collaboration, and ensure that everyone, from junior welders to senior specialists, is aligned in their roles and responsibilities.

Leveraging Technology

Technology can streamline operations and improve employee satisfaction. Using digital tools for scheduling, task management, or communication can make the workplace more efficient and enjoyable.

For example, Augmented Reality (AR) significantly enhances the experience of welders in manufacturing. This technology allows welders to view detailed task guides through AR glasses, eliminating manual consultations. Additionally, AR facilitates remote real-time collaboration, enabling experienced welders to guide trainees through complex tasks. 

Community & Social Engagement

Participating in social and community events can promote camaraderie and a sense of belonging among employees. A recent example of this was the Mission Tomorrow event that GENEDGE participated in, along with Porvair Filtration. At this event, Porvair’s welders interacted with middle school students, discussing their careers and the welding industry. Such initiatives not only benefit the community but also enhance your company’s visibility and reputation, deepening employees’ connection to your organization. 

Apprenticeships

Apprenticeships provide a structured path for learners to acquire practical skills while earning, benefiting both the apprentice and the employer. GENEDGE’s client, the Lawrence Brothers, has a  Welding Apprenticeship Program that enables aspiring welders in Southwest Virginia to gain hands-on experience and become certified MIG welders. By combining theoretical knowledge with practical learning, the program paves the way for learners to foster a successful career in manufacturing while also offering the chance to join the Lawrence Brothers team as full-time employees upon successful completion.

Click here to read the success story from Lawrence Brothers!

Build a Resilient Welding Workforce with GENEDGE

Retention of your welding workforce is vital to the steady growth of your small manufacturing firm. At GENEDGE, we are dedicated to aiding your journey, providing you with the necessary resources and tailored assessments to ensure your welding workforce remains a pillar of strength in your manufacturing firm. 

Contact a member of the GENEDGE team for questions or to Request an Assessment. If you are logged into your GENEDGE Alliance member account, Comment below!

How Small Manufacturers Can Use Market Research To Stay Competitive

Today’s customers run the world. They rely heavily on their own research, online reviews, and personal networks over traditional sales pitches to make buyer decisions.

But how can small manufacturers ensure they stay competitive and consumers stay at the end of their supply chain? Well, they have to know their market, audience, and what drives those decisions. 

That’s where market research steps in.

Read the Blog— “Trending: Your Small Manufacturing Enterprise”

What is Market Research?

Market research systematically gathers, analyzes, and interprets information about your target market, competitors, and business environment. It lets you understand your customers’ needs, preferences, and behavior to make informed decisions about your product, price, promotion, and place of distribution.
How Market Research Helps

Market research helps small manufacturers:

  • Create more compelling marketing materials
  • Identify more targeted niches interested in the company
  • Suggest ideas for new products or services based on pain points

Manufacturing best practices recommend using market research through existing sources or doing the research themselves and going directly to consumers. Existing sources can save a lot of time and energy, but the information might not be as specific to the audience as they would like. Direct research can be time-consuming and expensive, but it can give a nuanced understanding of the target audience.

manufacturers working on market research

About Primary and Secondary Market Research

Primary and secondary market research can help manufacturers gain insights into their target market and make smart decisions about their products and services.

For instance, primary research can help manufacturers know the needs and preferences of their customers, find new market opportunities, and try new product concepts. Manufacturers can conduct primary research through surveys, interviews, focus groups, or other methods to collect data directly from their target audience.

On the other hand, secondary research can help manufacturers gather information about their competitors, industry trends, and market size. This information can be obtained from published reports, online sources, or other published materials.

By conducting both primary and secondary research, manufacturers can comprehensively understand their target market and make informed decisions about their products or services. 

employees at modern factory

How Manufacturers Can Conduct Market Research

Market research might look complex, but it can be broken down into manageable steps:

  1. Define Your Buyer Persona: This is a detailed snapshot of your ideal customer, crafted using market research and real customer data. It helps you target your marketing efforts accurately.
  2. Identify Your Research Group: This involves finding individuals that match your buyer persona. This group should be your primary research target.
  3. Prepare Research Questions and Identify Competitors: Develop questions that can provide valuable insights for your business and pinpoint your main competitors to understand the competitive landscape.
  4. Summarize Findings into Actionable Steps: After data collection and analysis, summarize your insights into an easy-to-understand report. The information should be turned into actionable steps to maintain competitiveness in your manufacturing business.
Small Manufacturer working on research

Free Small Business Trends and Data for Manufacturers

According to the Small Business Association, the free resources below can give valuable insights into specific industries (like manufacturing), customer trends, loan information, manufacturing employment rates, earnings data, and more.

General business statistics

Consumer statistics

Demographics Segment

Economic indicators

Employment statistics

Income statistics

Money and interest rates

Production and sales statistics

Trade statistics

Statistics of specific industries

Get More From Your GENEDGE Alliance Membership

Are you ready to take your manufacturing business to the next level? In addition to discounted services like online training and the GENEDGE Emerging Business program, your membership in the GENEDGE Alliance gives you access to cutting-edge knowledge-based resources and tools!

Have a question about anything you read in this article? Contact your Small Business Manager or Comment below!

Trending Now: Your Small Manufacturing Enterprise

Author, Michael G. Levy
Business Services Director, Growth

After dozens of strategic planning engagements with smaller Virginia manufacturing firms, I’ve learned a thing or two through hard experience. Firstly, words matter. Turns out “strategy” isn’t just a buzz word, easily implemented, as you see in social media. There’s a lot of talk out there. A lot of words. Very little action.

Fortunately, at GENEDGE, we are driven by process and our results are measured. That’s why I work here. It’s different. We recognize that our Virginia manufacturers are not consumer businesses. Magic words don’t make them invest suddenly (or divest) in barrier-laden markets or the latest technologies. Smaller manufacturing firms – many of them “job shops” – are extremely risk averse when it comes to tougher, strategic decisions, especially when their industries begin to change or customers begin disappearing around them.   

One of the more challenging areas of strategic planning decisions involves the collection of value-added insights from market research. It’s challenging because, to formulate a statement of strategic intent properly, it must address a threat or opportunity faced by the business in 3-5 years plus. That’s what makes it strategic; the research and planning addresses a more distant, fuzzier horizon. The “SWOT” analysis is one of the primary go-to tools for synthesizing that research, but most facilitators fail to feed the exercise first with rigorous scanning of the external business environment. This requires a specific type of research which reveals insight into “what could be,” versus internal process research that measures “what is.”

More specifically, the examination of trends, and threats they create, equip leadership with enough information (never perfect) to help re-organize business priorities today, given that their industries continue to change rapidly into a very different future. Routinely and continually analyzing “trends” is one of the most powerful exercises we deploy with firms during strategic planning.

Once a trend is recognized, or predicted, the process takes over and leadership can challenge their teams to address several key questions which serve as inputs to market strategy:

  1. TREND IDENTIFICATION: Does this observation meet the definition of a trend in our industry?[1]
  2. PROBABILITY OF RISK TO OUR BUSINESS MODEL: If yes, how likely is it that the trend will impact our business model in the next 3-5 years?
  3. IMPACT: If likely, what is the magnitude of impact?
  4. STRATEGY: If the impact is a threat to the competitiveness of our business model, what changes can we make now to position our firm to win (against competitors) with specific customers in the future? Do we even want these customers anymore, or do we want to begin building new customers?

Download the GENEDGE Research Trend Guide>HERE

Obviously, the research and strategic planning sessions also require skillful facilitation and fact-finding; but, once a trend is recognized, it can be evaluated quickly to get everyone on the same page with new or revised project priorities. With knowledge and process, it becomes slightly easier for leadership to stop activities that now seem less value-added, then replace them slowly with new activities aligned with the likely industry shifts.

In my facilitations, after trend research and threat/SWOT analysis, this typically culminates with an “organizational trade-off” chart listing the activities of each key leader today, their time spent on those activities as a percentage of their day/week, and juxtaposition of a new set of activities they are tasked with tomorrow. After strategic planning, tomorrow’s time allocation chart should look different than today’s. If not, leadership should question whether this was a strategic exercise versus operational improvements.

But why is it much tougher on small businesses when it comes to turning research insights into action, even with tools and experienced facilitators? Why won’t they change, or take risks with capital? Is there more risk with smaller manufacturing enterprises, versus larger? Not necessarily.

In the 1980’s, Sears (and Montgomery Ward and JC Penney) knew about the trend of discount retailing. They had the research. The trend had been brewing since the late 1950’s; yet they did nothing, until it was too late. In 1999, Circuit City and Blockbuster each knew about the rapid adoption of digital streaming media by consumers. They studied it. There were frequent articles in leading business journals of the day. Why didn’t they change? Do larger players have less to lose when facing new industry trends? The question answers itself: not only did those firms perish, but their tier-two suppliers, and beyond, were hurt badly as well. Entire industries were disrupted, including small domestic manufacturers.

Looking back, it seems there was little excuse for not acting, except that organizational change is one of the hardest undertakings on the planet. However, once trend research is complete, and threats are isolated, a thoroughly informed, transparent SWOT exercise can begin, yielding clear insights for leadership to evaluate threats. Why begin with threats? Almost every facilitator and consultant I’ve seen begins a SWOT exercise with “strengths,” primarily because it’s an easier, more comfortable facilitation. However, there is no use documenting a company’s strengths if they don’t counteract a threat to the business brought about by changing trends. This is one of the keys to successful strategic facilitation missed by most “strategic” planners.   

When strengths finally are considered (preferably last in sequence), I define a strength as “a unique combination of people, process, technology or information that we have, but no one else has.” Suddenly, the strategic SWOT exercise becomes much tougher, and challenges everyone in the room to think about “why” someone would choose us versus the competition. In today’s world, “we have great people” or “we have the best quality” will not pass muster as a strength.

Similarly, a team research review of the external environment, and what potholes could be lurking, is the key to understanding how trends are shaping your industry. You will be surprised at how involved, engaged, and motivated your team becomes once you send them on this task. To get started, and make things a little easier, try this simple research technique to take a deeper look at trends and trend research. Then, meet with your team – or call a GENEDGE regional growth manager – to move forward into a less fearful future.

[1] Trend (def.): An irreversible shift in demand, within the context of a defined industry, due to some social, technological, economic, or political factor.

Online Training For Alliance Members

Resources for learning when you need them

GENEDGE provides high-quality educational content accessible on your schedule.

The GENEDGE Learning Management System offers standard on-demand courses or we can customize training packages to meet your needs.

As a GENEDGE Alliance Member, you qualify for discounts to online training. For GENEDGE Alliance Members ONLY, use GENEDGE23 code at check out to apply your member discount!

GENEDGE “TOOLING U – SME” Online Training

GENEDGE Alliance now offers a premier online training solution through Tooling U – SME off-setting the cost of bringing high quality, customized, on-site training program for manufacturers. More than 500 unique online classes provide a broad offering of manufacturing training topics. Plus, every online course has been reviewed and validated by industry experts.

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GENEDGE Alliance Emerging Business Learning Program

GENEDGE now offers online, accessible training paths to help Emerging Manufacturers have the knowledge and support to achieve their business objectives. These modules focus on the basic building blocks of a manufacturing enterprise with a focus on addressing the unique challenges faced by these emerging manufacturers.

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How Small & Medium Manufacturers Can Retain Their Workforce 

While we keep hearing the term “Quiet Quitters” and the “Great Resignation,” manufacturing employees aren’t exactly leaving because they hate their jobs. Some workers stay at their company for many years or their whole lives, loving what they do and feeling like they’re exactly where they’re meant to be. Others, the “job hoppers,” “hop” up the corporate ladder by giving themselves raises with new opportunities or leaving to pursue a different path. Whatever the case, most people and manufacturers alike aren’t going “just because.” In fact, a study administered by OnePoll on behalf of Motivosity suggests that 69% of employees “love” their current job—even 41% going as far as to call it their “dream job.”

Regardless, keeping your employees loyal in a small to mid-sized manufacturing company environment takes work, especially when there are bigger corporate competitors out there. But, what if we were to tell you that there are five core strategies to abide by that can retain all of your employees, regardless if they joined ten years ago or the last quarter? To unpack those, you need to understand why people love their jobs in the first place.

Top Reasons Employees Love Their Jobs

– Clients and co-workers (44%)

– Roles and responsibilities (39%)

– The ability to maintain a good work/life balance (39%)

– The industry they work in (34%)

– Manager/boss (30%)

(Statistics from Motivosity)

What is Employee Retention?

Employee retention measures a business’s ability to keep its employees and lower employee turnover (how often employees leave). In layman’s terms, it indicates how much people actually want to work for you. A high employee retention rate of 90% or higher helps businesses succeed because more dedicated employees make reaching business goals easier.

How To Calculate Employee Retention Rate

Simply divide your total number of current employees during a set quarter by the total number of employees you started with during that same period and multiply by 100. The resulting decimal is turned into a percentage, and that’s your rate. 

For example, let’s say you came into Q2 with 56 employees and ended Q2 with 52. Here’s how to set up your equation:

(52 / 56) x 100

The number equals 92.8571429, rounded to the nearest tenth and converted to the percentage 92.9%. That’s a stellar retention rate.

Why Should Small and Mid-Sized Manufacturers Care About Employee Retention?

Caring about your employee retention rate is common sense because when you have a lower retention rate, you also have a high turnover rate. If you have a high turnover rate, you are struggling to get employees to stay with your business. If you’re struggling to keep your workers, you won’t be able to keep up with daily customer demands, innovate new technology during Industry 4.0, or maintain a healthy supply chain. And beyond that? Undelivered or faulty products and unhappy customers. Say goodbye to profit, too. 

More specifically, if your retention rate is low, your business probably spends more money hiring new employees than helping existing employees succeed. This is especially difficult for small and mid-sized manufacturers because they rely heavily on their employees to meet production goals. They are more at risk when employees decide to leave because they do not have many workers at their disposal, like large corporations. On top of that, the turnover costs are incredibly high: it’s estimated that losing a worker can cost a company one-half to two times the worker’s salary. That’s not productive manufacturing.

How To Boost Employee Retention

Good employee retention stems from a low turnover rate, continuous business growth, healthy work-life balance, a welcoming work environment, and abundant opportunities. Let’s discuss some main employee retention tactics tailored for small and medium-sized manufacturers.

1. Perform thoughtful hiring practices.

Employee retention starts with hiring the right people. How do you find the right people? Through a comprehensive, detailed recruitment process that ensures you’re hiring the right people. Think of internal and external recruiters, background checks, meaningful interviews, and resume comparisons to find people with the best manufacturing experience and skills. Do they have experience working through difficult supply chain issues and using advanced production technology? Formulate strong questions and consider utilizing resources specifically designed for family-owned manufacturing businesses.

2. Foster a collaborative and inclusive work culture.

Manufacturers need to work in environments where they feel valued; it’s probably the most important element to employee retention. Continually acknowledging your employees’ manufacturing wins, customer satisfaction, and performance metric victories is important to building workplace confidence. Implement custom solutions for manufacturing companies, like rebuilding your operational processes. 

3. Offer extensive training and development opportunities.

Are your manufacturers struggling to perform daily activities? They may need to hone their abilities. If your employees and managers aren’t properly trained, they may feel overwhelmed and unable to carry out tasks efficiently. Always give your employees proactive feedback, encourage teamwork, and demonstrate how their work affects customers. Likewise, invest in manufacturing leadership coaching programs to develop the skills and potential of your small manufacturing owners and managers.

4. Communicate; always.

The moment your manufacturers start guessing and making assumptions is the same moment the supply chain disrupts. When employees understand what is expected of them and there are healthy flows of communication, they’re more likely to ask questions when they are questioning. Establish open lines of communication and encourage regular feedback sessions. Provide resources for family-owned manufacturing businesses focusing on effective communication strategies to enhance employee engagement and satisfaction.

5. Offer fair compensation, benefits, and perks.

As pivotal members of the supply chain and creators of our current technological advancements, manufacturers deserve fair pay. Offering fair compensation, benefits, and perks and allowing opportunities for raises when earned shows that you genuinely care about their quality of life. Consider implementing manufacturing workforce development programs that provide opportunities for career growth, skills enhancement, and personal development.

Even though employee retention starts with hiring the right person, it is up to you as a small/midsized manufacturing business owner to work to keep your employees happy, safe, and thriving at their jobs. 

If you’re already staring at your retention rate on your calculator and you’re not impressed, take advantage of these tips and resources to raise it. Join the GENEDGE Alliance to get started.

How to make your Manufacturing processes more efficient

It’s the Digital Revolution. The adoption and proliferation of digital computers in the late 20th century have led to where we are now: automation devices, Bluetooth, and smartphones in the back pocket of every American. 

But with changing times comes changing processes for the sake of operational efficiency. Yet, many manufacturers fall victim to adhering to outdated practices, hindering growth and profitability. This can prove true for smaller manufacturing companies, especially where a whopping 75.3% have fewer than 20 employees.

Join the Alliance: achieve manufacturing strategic planning

Let’s face the facts: it’s time to break free from the “if it ain’t broke, don’t fix it” mindset and explore better, more efficient, and versatile practices to adapt to the changing economy. Here’s how to propel your business forward.

1. Embrace Lean Manufacturing

What is lean manufacturing?

Lean manufacturing is a powerful methodology that eliminates waste and streamlines workflows for manufacturers and beyond. It is closely related to Toyota’s post-war 1950s-1960s original operational model called “The Toyota Way” or the Toyota Production System (TPS), which centers on the two pillars of just-in-time inventory management and automated quality control. 

Manufacturers execute this strategy to increase efficiency—to improve the production process, reduce inventory costs and waste, and boost productivity and profit. Operational success relies on regular outputs, high-quality processes, and trustworthy suppliers. 

GENEDGE Business Service Director Operational Support, Bert Eades explains, “Lean manufacturing is all about identifying and reducing various forms of waste, like defects and excess inventory. The failure to utilize the creativity and talents of people has long been included as a form of waste, but more recently ineffective interactions between leaders and team members has been identified as another form of waste. Meetings, performance discussions, emails, and even quick hallway conversations are all opportunities to improve performance. These interactions can be standardized by training leaders to follow a process for more effective conversations and to increase their emotional intelligence to better engage employees.”

Why do Lean?

“Lean manufacturing is a philosophy and a set of practices that aim to eliminate waste, improve quality, and increase efficiency in processes. One of the core aspects of lean manufacturing is problem-solving, which involves identifying, analyzing, and resolving issues that affect the performance and value of the product or process.

The benefits of becoming a Lean Manufacturing Plant have been well-documented. The fact that lead time can be reduced, and throughput can be increased by focusing on eliminating wastes is the essential benefit in becoming Lean.” GENEDGE Business Service Director, Operations Joe Stark.

How can my business adopt Lean Manufacturing?

Begin by reviewing your existing processes and involve your frontline workers in recognizing areas of improvement. Enact changes and closely monitor the direct correlation to efficiency. Focus on activities that add value, limit risk, standardize processes, ensure compliance, and benefit the overall customer experience. Now, you’re off to a great start.

2. Leverage Lean Manufacturing Tools

To successfully implement lean manufacturing, choosing the right tools is essential. These tools help organize thoughts, identify issues, and effectuate your plan. Here are some staples:

3. Launch the Six Sigma Approach

Six Sigma or Lean Six Sigma is another valuable concept for minimizing process variation and enhancing customer satisfaction. It follows the DMAIC model: Define, Measure, Analyze, Improve, and Control. 

Through workflow standardization and defect abolition, manufacturers can achieve major efficiency gains. 

How? Well, Six Sigma relies on statistical analysis to drive data-driven decision-making. Taking advantage of modern data systems guarantees precision, as well as boundless improvement and optimization. 

4. Implement Kanban Boards

Visualizing workflows is essential for spotting inefficiencies in how you normally do things. Kanban boards paint a clear picture of your current processes, enabling you to break them down into stages (and ultimately isolate bottlenecks).  

Key for visual learners, this agile project management tool helps limit works-in-progress (WIPs) and maximizes production flow. Its WIP limits set maximum thresholds for tasks at each stage, preventing overloading and verifying completion before starting new activities. Kanban and WIP limits work harmoniously to drive faster completion and smoother workflow.

Kanban boards use cards, columns, and continuous improvement to support technology and manufacturing teams commit to a suitable amount of work—and excel!

5. Empower Your Workforce

Last but certainly not least, efficiency improvement efforts should involve your entire workforce. After all, a thriving manufacturing company depends on its workers to innovate, compete, and grow.

To perform manufacturing workforce development, engage your employees by seeking (and listening to) their input, ideas, and feedback on process improvements. Undoubtedly, their frontline experience and unique insight are invaluable for pinpointing inefficient areas.

It’s worth noting that 97% of employees state that when they feel valued by their employer, it heightens their confidence and motivates them to perform better. Relevant to manufacturers, a confident workforce also contributes to 50% higher employee productivity, 106% more energy at work, and 13% fewer sick days.

Foster a culture of unstoppable growth, encourage collaboration, and offer training opportunities to progress their skills further. 

“Process” is the most important component in strategic execution—and efficiency, too.

A good manufacturing operation starts with its processes. We’re talking inventory management, materials requirement planning (MRP), supply chain management, sales management, and production cost management to deliver exceptional goods to customers. 

GENEDGE training and coaching tools help your team achieve breakthrough customer satisfaction, operating results, and ultimate profit. 

With these specific strategies in mind, manufacturers can overcome their biggest roadblocks and unlock operational efficiency. 

Discover our most popular manufacturing operations support services and advanced manufacturing consulting, or contact your regional growth manager to tailor a customized solution best for you.



Download Infographic: Process Improvement in 8 Steps

Unlocking Efficiency and Cost Savings with Supply Chain Optimization

When it comes to running a successful manufacturing company, understanding the intricacies of the supply chain process is one of the bare essentials. From raw materials to finished products, every step and working mechanism must work in tandem to ensure seamless customer satisfaction. That’s where supply chain optimization comes in. By optimizing your supply chain management, you can unlock efficiency gains and significant cost savings from first creation to final delivery.

What is Supply Chain Optimization?

Supply chain optimization is a strategic approach to redefining the entire network of procurement, production, and distribution processes. It aims to streamline operations, reduce costs, minimize waste, and boost overall efficiency. 

Download Infographic: 5 Steps To Optimize Your Manufacturing Supply Chain

What is the Supply Chain Process?

The supply chain process involves the harmonization between the following key players: raw material supplier, manufacturer, distributor, retailer, and customer. In that same order, the product flows through each node and relies on the cooperation of each individual to make it to the customer “checkpoint.” 

It stabilizes and improves the delicate inventory ecosystem by eliminating bottlenecks, fostering collaboration with suppliers, and making data-driven decisions.

Supply Chain Process Management

Supply Chain Process Management (SCM) is the steps taken to ensure the smooth flow of goods from raw material to the final product.

All members of the supply chain may participate in the following:

  • Collaborating closely with suppliers to ensure safe product delivery.
  • Tracking and monitoring goods, inventory, and supply chain performance.
  • Analyzing and optimizing the sourcing process.
  • Minimizing disruptions. 

The ultimate goal of SCM is to reduce shortages and keep costs down while transporting goods from one supply chain point to the next. 

Adhering to these steps helps manufacturers stay competitive, ensure product availability, and make fast deliveries.

How Supply Chain Optimization Helps Manufacturers

Cost Savings

One of the key initiatives of supply chain optimization is identifying cost reduction opportunities. Inefficiencies, bottlenecks, and redundancies are all instances of increased expenses and, thus, are also prime targets.

Productive inventory management, efficient transportation, and accurate demand forecasting further push the agenda to minimize excess inventory and optimize transportation routes. These logistical techniques empower manufacturers to mitigate the risk of stockouts, thereby lowering inventory and overhead costs and—most importantly—saving money that would have otherwise been lost.

Improved Efficiency

More efficient processes mean more fulfillment for your staff, stakeholders, and customers.

By following a comprehensive supply chain plan, manufacturers can reduce lead time, increase productivity, improve resources, and ultimately elevate efficiency. Likewise, updating old systems and technologies can further automate production.

Modern manufacturers are heightening efficiency by adapting to Industry 4.0, the Fourth Industrial Revolution that fuses the biological, digital, and physical. This is done by adopting cutting-edge, advanced manufacturing technologies that innovate and advance the manufacturing sphere.

By implementing artificial intelligence (AI), virtual reality (VR), and the Internet of Things (IoT) in their operations, manufacturers achieve peak connectivity, big data analytics, digital quality control, and cybersecurity.

Other Benefits of Supply Chain Optimization

  • Seamless customer experience
  • Improved risk mitigation
  • Better quality control
  • Optimized shipping 
  • Better cash flow

Supply Chain Optimization Services for Manufacturers

By embracing supply chain optimization for your manufacturing company, you can achieve operational excellence across the entire value chain and enable long-term efficiency and growth. Taking advantage of research-based resources presents improvement opportunities within core value streams and prepares manufacturers for tomorrow’s global market.

Virginia manufacturers can harness the power of several proactive GENEDGE technologies and integrations:

  1. Supply Chain Optimization Program with VEDP International Trade: Designed to help Virginia companies evaluate and streamline their supply chain management and import processes, this program provides counseling, strategy development, and resources that boost performance and cut costs.
  2. Value Chain Strategy: Engineered to help develop a strong foundation and execution plan, supply chain optimization services for manufacturers help drive a stronger competitive edge. Services include value chain planning, ERP/MRP system optimization, risk management analysis, supplier alignment, and more.
  3. MEP Supply Chain Optimization: MEP’s newest program offers manufacturers a strategic and consultative approach to transform their supply chain strategy into tangible collaboration, equipping them with tools to address gaps and enhance competitiveness.
  4. CONNEX™ Virginia is an online capabilities database and connection platform created for Virginia manufacturers. Whether you’re a large OEM or small supplier, CONNEX Virginia will help you adapt to changing market demands. It will quickly find new qualified suppliers, find new contract opportunities that you’re perfectly qualified for, and connect to state manufacturing resources.  

Adopting proactive value chain strategies and performing supply chain management can propel manufacturing companies to make data-based decisions—minus the inflated costs and risk. 

Join the GENEDGE Alliance for free today. And utilize resources like CONNEX Virginia to achieve operational excellence across the entire value chain. Enable long-term efficiency and growth for your manufacturing business in Virginia.

The Role of Technology in Industry 4.0

In a world where automation replaces common tools, it’s not hard to miss the implications of evolution coming faster than anticipated. How fast? A whopping 140 times more public search interest since 2011, to be exact.

From the emergence of open-source AI to sophisticated software that blurs the lines between the physical, digital, and biological, industries like the manufacturing sector (and the global economy) are transforming to adapt.

Welcome to the fascinating era of Industry 4.0, where technology is a key player in accelerating the Fourth Industrial Revolution. 

What is Industry 4.0?

To sum it up, Industry 4.0, also known as the Fourth Industrial Revolution or 4IR, is the fusion of physical systems and digital advancements by integrating digital technologies, automation, and data-driven processes. It’s a term branded in 2015 by the chairman and founder of the World Economic Forum, Klaus Schwab.

Not limited merely to large corporations, it conceptualizes rapid change in small to mid-sized manufacturing companies, enabling unprecedented levels of efficiency, innovation, and connectivity. This fast-forward progression is reiterated by Schwab as not only being a step for efficiency, but a leap for industrial capitalism as well.

Why Industry 4.0 Matters To Manufacturers

Industry 4.0 brings a surge of technological advancements that level the playing field, including artificial intelligence (AI), virtual reality (VR), and the Internet of Things (IoT). 

Now, let’s add an example to the mix. IoT sensors are embedded in the production line to collect temperature, pressure, and vibration data. This real-time data is fed to the AI algorithms, which continually monitor and analyze the manufacturing process. When a system malfunctions, AI can detect and trigger an alert before it causes major disruptions. 

But what is technology’s mark on Industry 4.0? How will this affect small to mid-sized manufacturers with 20 or fewer employees?

Technology’s Role in Industry 4.0

  1. Connectivity
  2. Big Data Analytics
  3. Digital Quality Control
  4. Cybersecurity

1. Connectivity: The Backbone of Industry 4.0

At the heart of Industry 4.0 lies connectivity, fueled by the Internet of Things (IoT). Harmonizing machines, processes, and stakeholders (like voice assistants, wearable tech, and smart equipment) allows seamless production. 

For example, Industry 4.0 extends connectivity beyond the factory floor to the entire supply chain. Connected machines and equipment launch real-time inventory tracking, demand forecasting, and supplier collaboration. This integration fosters efficient logistics, reduces lead times, minimizes stockouts, and enables just-in-time production.

As a whole, technology plays a vital role in optimizing operations, improving supply chain optimization, and fostering collaboration for small to mid-sized manufacturers in an otherwise rugged landscape.

2. Big Data Analytics: Extracting Insights for Growth

The rapid progression of quantum computing and AI data collecting generate immense opportunities for midsize manufacturers in Industry 4.0. 

Manufacturers can pinpoint production trends, customer preferences, and market dynamics by analyzing historical and real-time data. These insights guide strategic decision-making, product development, and market positioning.

Furthermore, it creates a feedback loop of continuous improvement and innovation. Absorbing data on operational performance, product usage, and customer feedback, small manufacturers can identify areas of improvement and stay ahead of the competition. With Industry 4.0 technologies for manufacturing, it doesn’t have to take a large number of staff members for a company to emerge as a global industry leader.

3. Digital Quality Control: Ensuring Product Integrity

Maintaining inventory quality is the code of a successful manufacturing business. Companies can guarantee quality assurance and regulatory compliance by implementing digital quality control measures, incorporating traceability systems, and using technologies like barcode scanning and RFID.

This can be done by assigning a unique digital identifier (UID) that captures critical information about its production history, components used, and relevant quality elements. It also enacts end-to-end traceability, making it possible to track and verify a product’s origin, journey, and quality at any point in its lifecycle. 

4. Cybersecurity: Securing the Digital Frontier

As technology marches further up the evolution chain, cybersecurity becomes an increasingly critical concern. Enter Industry 4.0 solutions: developed cybersecurity programs that help small manufacturers maintain security status. 

Sophisticated security protocols, encryption techniques, and employee education can protect manufacturers from unwanted intrusions from hackers, phishers, and viruses that can cripple business operations and expose sensitive, confidential, and proprietary information. GENEDGE assistance in these areas includes:

  • DFARS Requirements & Compliance
  • Cybersecurity Maturity Model Certification (CMMC) audits
  • Compliance with DFARS 252.204-7012 regulation and adherence to the NIST SP 800-171 specification
  • The creation of a Supplier Performance Risk System (SPRS) score

The time is now for manufacturing companies to obtain supplies, identify ways to optimize processes, and find the workforce needed to adapt to Industry 4.0. While we are constantly finding upgrades to the way we do business, small and midsized Virginia manufacturers can use innovative technologies to their advantage to thrive in a digital world.

Join the GENEDGE Alliance for free and optimize resources to innovate, compete, and grow. To learn more about how GENEDGE is Empowering Small and Medium Manufacturers, connect with us.