How manufacturing SMEs need to tackle productivity problems
Productivity plays a pivotal role in achieving growth for small businesses yet new research suggests many manufacturing firms are struggling to meet their plans.
The latest Manufacturing Barometer, produced for the Business Growth Service, showed that 84% of small businesses believe they need to improve their productivity.
They claim improvement is needed within six months to achieve the targets they had previously set, highlighting that productivity is currently at the forefront of many growth plans.
The latest figure represents an increase on the 80% of firms who felt they needed to boost their performance six months ago.
Productivity in manufacturing can be improved by increasing efficiency in the workplace, cutting levels of waste and by ensuring that the potential of a workforce is realised.
Failing to meet targets could leave companies behind their competitors or even in financial difficulty should sales and output volumes decrease significantly.
While restructuring a business could aid the situation, it is important for firms to recognise the issues they face and to take action as quickly as possible.
Seeking advice from relevant sources is recommended, especially in instances where company finances are affected – insolvency practitioners or financial advisors can help in these cases.
The latest survey suggests that action is needed as only around half of the businesses that identified issues six months ago actually managed to achieve their goals.
This does highlight that it’s possible to improve if actions are taken, but it also showcases why early action is required in order to sustain growth.
Positivity was still widespread in the manufacturing sector as a whole though according to the research, with 70% of companies harbouring plans for growth.
Some 55% of firms were also said to be planning to expand their workforces, up from 50% at the end of 2014.
Investment into machinery and technology is also expected in nearly all cases, suggesting that many firms are planning to improve their positions in the months ahead.
By Phil Smith