June 21st 2022 11:00:00 AM
Now, More Than Ever, Manufacturers Need to Start Tracking Inventory. Here’s Why.
September 18th 2018 15:00:00 PM
Have you noticed that the experts seem to be having a hard time deciding how the manufacturing industry is doing? One week they tell us that job growth is up—the next week they tell us that robots will steal all our jobs. One week they tell us that manufacturing is the strongest it’s been in 13 years—the next week they tell us that manufacturing is over for America because of China.
It’s hard to know what to think and it’s hard to plan for success.
Here at Scanco, we think that that tracking inventory is the secret to success for American manufacturers. Sound like an odd conclusion? Check out this article because it’ll explain why tracking inventory is the solution to many of the manufacturing industry’s current issues.
Some people like hashing over the ups and downs of the industry, other people hear there’s a problem and simply want to find the solution. If you’re the solutions type (the latter), contact Scanco online or at (330) 645-9959 to learn how you can quickly improve your manufacturing company’s competitive stance.
One Expert Looks at the Current State of American Manufacturing
What got us thinking about this post was a fabulous article by Michael Collins, vice president at Columbia Machine in Vancouver and author of the book, The Rise of Inequality and the Decline of the Middle Class. In his article, he has taken a deeper look at where American manufacturing stands and why manufacturing is critically important to our success as a nation.
In the article, Collins meticulously investigates the data sources for many of the conflicting claims that the experts cite when making predictions about the industry.
His findings show that:
- Advanced employee training is critical
As Deloitte predicted in 2011, the American manufacturing industry faces a looming labor shortage of 2 million jobs in the next decade, due to a lack of skills. This is because, in the future, machines will likely perform unskilled, repetitive tasks and humans will need to monitor and program the machines to ensure maximum output. Manufacturing companies will need to start investing heavily in training, so they can build a workforce with the necessary tech skills.
Take action: Manufacturers are often surprised to learn how much time and money they can save by implementing barcoding solutions that track inventory in real time. Tracking inventory helps your company free up time previously spent on endless counting and last-minute procurement, empowering you to allocate more time toward training and skill building company-wide.
- Job growth is actually negative
In his article, Collins delves deep into the Bureau of Labor Statistics data and concludes that manufacturing jobs are definitely declining by a rate of 0.6% annually between 2016 and 2026. This means manufacturers will either be turning increasingly toward automation, or that all the jobs will be outsourced to China. It’s hard to tell.
Take action: It certainly is difficult to read between the lines to figure out the facts, but one thing you can do to ensure success with either outcome is to start tracking inventory using simple, barcode-based automation. By tracking inventory with barcoding tools, you’ll have clear insight into your materials and FGs, which means you can resupply exactly when you need to. This will help you avoid rush orders and labor overtime and keep your factory running with the smallest crew possible, so your margins stay competitive.
- Tariffs and trade deficits create an unknown situation
Though Collins did not mention the tariffs, our interpretation of his article leads us to think that tariffs have the potential to help American manufacturing in the long-term. However, the help may be too little too late for the manufacturing industry, due to our skyrocketing trade deficits. As Collins states, America now owes $11.5 trillion to the countries that have loaned us money to finance our deficit, and the money to pay those debts back comes from taxes. This creates an environment that could encourage multinational corporations to move more plants overseas because they may find it’s cheaper to pay tariffs with low labor costs than it is to pay taxes with high labor costs. On the other hand, the tariffs may slow this process. Again, it’s hard to tell.
Collins’s data sources additionally show that rising trade deficits over the past 18 years have lost us at least 5 million manufacturing jobs. Who knows how the tariffs will impact that number?
Take action: Unfortunately, there is no simple solution to this problem, since we face so many unknowns. However, though it may sound odd, we still suggest tracking inventory in this situation. As we’ve all already read in the news, tariffs are increasing prices on raw materials, which disrupts your supply chain. Keeping a close watch on your raw materials in real time can save you on procurement costs, and knowing (and leveraging) the exact number of available goods you have can lead to unexpectedly advantageous sales opportunities.
Is There Hope for American Manufacturing? We Think So.
Look, as we established already, experts say a lot of things about manufacturing; their predictions and commentary are all over the map. Here at Scanco, we don’t claim to know the future, but we’ve spent nearly 30 years helping manufacturers like you drive growth and achieve outstanding success. We expect to spend many, many more years helping manufacturers grow successful, incredible businesses and we think tracking inventory is a great solution that can help achieve this aim, even in the face of many of today’s challenges. However, we also understand that your manufacturing business faces unprecedented challenges in the months and years to come.
So, to help, here’s one last business-building recommendation we have.
While we certainly don’t know for sure what the future will bring, we do know that in recent years, one thing that has held true is that Chinese manufacturers are typically slower and less agile than American manufacturers. In other words, speed may be your competitive advantage.
Contact Scanco online or at (330) 645-9959 and learn how you can increase your speed with barcoding solutions that help you increase your competitive stance in today’s challenging market.