According to a recent IndustryWeek article, middle-market manufacturing companies face many of the same issues their larger peers do, such as growing inflation, supply chain issues, talent attraction and retention, high asset replacement costs, and difficulty hiring and retaining top talent. Yet they lack the deep pockets of global companies.
In the U.S., 200K middle-market companies represent one-third of the private sector’s GDP and employ approximately 48M workers, write Mike Williams and Erik Olsen, the article’s authors. Despite this sizable presence, middle-market firms typically have lower access to capital than larger firms, which can tap banks and capital markets for loans and other financing. As a result, middle-market firms are more vulnerable to private-equity buyouts at lower EBITDA multiples.
However, middle-market firms can often move faster than global companies. They may have fewer redundant systems and less complex processes than global companies, which execute fast-paced mergers and acquisitions and acquire significant technical debt. As a result, middle-market firms can move fast to deploy new solutions, try new approaches, and train workforces on new processes.
Middle-market manufacturers can solve the challenges IndustryWeek identifies by deploying platforms such as QAD Redzone. Connected workforce solutions are designed around workers, providing the data and tools they need to solve problems and win the day. These tools leverage social, mobile technology for communication and collaboration, lean production techniques, and coaching to empower teams to adopt new standard work and problem-solving skills. Here’s how:
Combatting Growing Inflation
While all manufacturers are experiencing raw material increases, there are some costs they can control better. Manufacturers routinely experience equipment issues that cause unwanted downtime, too much scrap material due to inconsistent processes, and quality issues that result in wasted products and customer returns.
QAD Redzone provides the data and tools manufacturers need to identify and address these issues. Palermo’s Pizza has used QAD Redzone to reduce cheese waste from around 5-6% to less than 3% for 18 consecutive weeks, saving more than $400K.
Improving Supply Chain Resilience
Manufacturing leaders want to increase the responsiveness of production lines, driving throughput when demand grows and decreasing it when it falls. QAD Redzone provides real-time production data that teams use to make the best decisions on driving or throttle throughput. In addition, teams that deploy the Compliance module solve common quality issues that cause customer returns, harming profitability.
During the pandemic, Taffy Town, a Utah-based confectionery company, experienced unprecedented growth, but couldn’t keep up. According to the company, lead times doubled, then tripled, and even quadrupled past historical norms.
Unwilling to miss out on the business boom, the Taffy Town team deployed QAD Redzone and decreased lead times from 10 to three weeks over nine months. As a result, the team drove throughput by 70%, notching $2.6 million in new sales.
Developing Talent
QAD Redzone links teams to problem-solve, exposing new workers to how to address common production issues. Teams develop their learning, helping other individuals master critical skills. Workers can also use digital skills matrices to develop skills their employers need.
Digna Cedillo, a flower designer for Empire Bakery Commissary, used QAD Redzone to become a production lead. With instant English-to-Spanish translation of work orders and easy access to multilingual training, Digna became an expert on her company’s systems and processes and contributed in new ways by participating in a 5 Whys assessment and training other workers.
Reducing Asset Replacement
Production lines experience more wear and tear when not proactively maintained. Manufacturers seeking to reduce the total cost of ownership of equipment can improve proactive maintenance by identifying and solving small issues before they become big ones.
Production teams that use QAD Redzone analyze real-time data and visual inspections of equipment to surface production anomalies. Teams then capture evidence via video that they can share with maintenance, while trained production operators also serve as “doctors,” performing routine maintenance processes.
Haviland Enterprises, Inc.’s production team uses QAD Redzone to create video tickets to facilitate issue diagnosis and resolution. “Previously, when the operators put in a work order for maintenance to fix a problem, many times it wouldn’t occur when the maintenance technician showed up. So, now operators can capture exactly what they’re seeing so that the technicians know where to focus their efforts,” says Chandra DeGood, West Packaging Facility Supervisor. That translates to faster repairs, smoother running equipment, and lower Opex and Capex costs.
If you’re operating a middle-market manufacturing company and want to increase competitiveness, consider deploying QAD Redzone. Your team will be able to leverage pervasive data visibility and tools to solve seemingly entrenched problems, driving new revenues and returning profit to your bottom line.
