Why would you need to downscale factory operations?
It can sometimes be a harsh reality for business owners to recognise that they need to downsize operations either temporarily or indefinitely. However, this shouldn’t always be taken as a negative. The truth is that some industrial facilities won’t be utilised to the fullest due to a range of factors, some of which might be economical, industry-related, or unique to the business itself. In each case, downsizing might be the best decision you can make to maintain efficiency and production quality. Continue reading for more information on downsizing manufacturing operations.
Why manufacturers would want to downsize
As mentioned, downsizing can seem counter-intuitive but it can be a smart choice depending on certain internal and external factors. This can include:
Unfavourable economic conditions can impact industrial manufacturing businesses in a number of ways. However, it most commonly results in a decrease in demand for manufacturing services, as there’s more risk associated with spending.
One of the main sources of disruption in manufacturing operations is problems further down the supply chain. Significant delays due to these issues can be a reason to downscale, as it means avoiding costly overcapacity.
All manufacturers have costs associated with their operations. This includes materials, utilities, machinery, energy, workers, and any costs unique to the business/industry. Increasing prices for you clients is an option to counteract rising costs, although this risks loss of sales. Instead, downscaling can be more beneficial if you are able to maintain regular production quality.
Many products and services have a variable demand that changes depending on the time of year. Manufacturing businesses with seasonal operations should consider downsizing during quiet periods to save on costs.
Changes in business strategy might warrant downsizing. For instance, choosing to focus solely on one product and therefore removing the need for the equipment previously used for manufacturing other products. Equally, downsizing might be necessary in the short term to meet long term goals, such as appealing to a specific portion of the market.
How to downscale factory operations
The primary goal in downscaling operations is to reduce the business’s outgoings. However, downscaling can be risky if you don’t know where costs can be cut without compromising factory efficiency. As experienced factory consultants, we’ve put together the following list of recommended strategies.
- Factory relocation: oftentimes, some of the biggest costs for manufacturers are the associated with the facilities they inhabit. Relocating to a factory that is better suited to your operation can be an effective way to downsize.
- Lift and shift support: rather than moving the contents of an entire factory, you could instead employ professional help to remove and replace certain assets such as tools and machinery. This can be a flexible form of downsizing as it can be used to target specific areas of production.
- Outsource factory works: expert factory support can come in many forms, which allows you choose which downsizing efforts you need at any given time. This includes the two works above, project management, end of line process management, machinery maintenance and more. Plus, these outsourced services will typically be cheaper and more flexible than hiring part or full time workers.
Production engineering specialists
FESS Group is committed to supporting UK manufacturing through tailored factory consultancy. Our services focus on a range of operational areas, from construction and installation to health and safety and everything in between. Our expertise allows us to provide guidance for factory owners when they are faced with difficult decisions such as downscaling. Book a free site survey and one of our experienced technicians will be able to offer advice on the best steps forward for your factory.