While the last 12 months certainly haven’t been a walk in the park for a lot of businesses, the new financial year brings its own challenges and opportunities. Here are the top three things we think manufacturing businesses should focus on in the new fin year, based on current emerging trends.
#1 Managing your prices when working with steel
Steel prices are changing daily with huge and difficult to predict fluctuations. If your projects rely on steel, then now is the time to prepare. It’s important to know and understand your requirements for upcoming and predicted projects in the coming months. Templating your projects and forecasting your likely projects and help you do this.
If your cash flow allows it, it may be a good idea to prebuy and lock in a price for steel. This can help you to keep your margins stable while working on projects. Regardless, keeping a keen eye on your forecast vs. actual project margins will help you to stay on track and profitable as prices change.
#2 Working with longer freight times and challenges
Between COVID19 delays and stimulus packages upping demand, the shipping backlog in China is causing ripple effects across the world. In fact, more ships are affected than were at the height of the Suez Crisis, with the price of a shipping container up by 282% since last year.
With all this going on, JIT inventory management should be used with caution. Where possible, you may want to consider pre-selling and forecasting to help you buy in bulk and remember to pre-book your shipping ahead of time if you can.
Remember that shipping delays can also affect your costs, so it’s important to factor this in when costing your stock ad projects.
#3 Building a team with a skilled labour shortage
A lot of industries are struggling to find skilled workers currently. If you’re struggling to find new staff, it’s time to invest back into your current team to help them work better, faster and smarter. Use technology to help them increase their productivity and take on more work. Not only can this help you get more done with a smaller team, but it also means that you’re able to cut down on admin costs and offer more competitive wages to keep high performing team members.
Depending on your industry, you may also be able to help counter the lack of skilled workers by partnering up with other local businesses. By doing this you and the other business can specialise to decrease your overheads and increase productivity.
Want help preparing your manufacturing business for the new fin year?
WorkGuru can help you uncover and understand your costs, project margins and productivity better. Help your business take on the new year with greater visibility and control.
Contact the WorkGuru team for a free demo of the software to see how it can support your business operations in FY22.