HR & New Work
7 min read
How to increase productivity in manufacturing (with real-life examples!)
If there's one industry that's obsessive about productivity, it's manufacturing. Even the slightest tweak, at a large scale, adds up to big differences in output and revenue for your business. Below, we’ll go over how you can improve efficiency.
After all, your entire business centres around repeatedly creating a tangible product over and over at a large scale. With metrics like production rate, Takt time, and OEE, you do everything you can to keep the machine running smoothly. That’s why it’s crucial to learn how to increase productivity in manufacturing. Let’s break down what’s affecting productivity in your industry in the first place.
What factors affect productivity in manufacturing?
While things like inefficiencies, poor processes, and lack of resources are all factors that affect employee productivity in any industry, manufacturing has unique challenges. By knowing what factors affect productivity in manufacturing, you’ll be ready to tackle them in your workplace.
Supply chain issues
Supply chain disruptions have plagued the industry, especially in the past three years. According to the U.S. Census Bureau's Small Business Pulse Survey, more than 64% of manufacturing businesses experienced domestic supplier disruptions in 2021. And KPMG predicted that “Disruptions to supply chain operations are set to stay in 2023, whether they be existing or new geopolitical conflicts, inflationary pressures and the recessionary environment, climate change weather events, or other issues yet to emerge.”
A 2023 report from Thomas Insights found that 82% of American manufacturing companies were experiencing a labour shortage. And a study by Deloitte and The Manufacturing Institute predicts that the manufacturing skills gap could lead to 2.1 million unfilled jobs by 2030.
Lack of safety
Manufacturing is often considered one of the most dangerous industries, and yet, many employers aren’t doing enough to keep their workers safe. In a report from StrongArm Technologies and YouGov, the lack of on-the-job training was highlighted as an issue that leads to safety risks in workplaces, including those in manufacturing. Nearly half of industrial workers in the report said they got less than five days of training for their role, and 18% reported getting none at all.
Slow adoption of technology
Outdated technology or resistance to adopting technology can hinder productivity. According to Epicor, a whopping 31% of factory workers use all-paper documents in their daily workflow, and only 50% say their company is "eager to embrace new technology."
Poor talent retention
More than half of manufacturing employees plan to leave their jobs in 2023. When you have to go through the entire process of hiring a skilled worker to replace one who leaves, that puts a damper on productivity.
How can the manufacturing industry increase productivity?
1. Use centralized communication to combat supply chain issues.
The Covid pandemic exacerbated supply chain shortages in recent years, which led to delays and decreased production. While measures such as diversifying suppliers, increasing critical inventory, and reshoring can all help, you’ve likely tried that by now (or have good reasons not to).
One strategy that every manufacturer can benefit from to combat supply chain issues? Collaborative communication. That’s according to the findings of University of Missouri-St. Louis assistant professor Matias Enz. He and his team examined 500 surveys of companies, including those in manufacturing and warehousing, and found that the "lack of communication and collaboration across divisions" was a main factor contributing to the pandemic's supply chain problems.
Managing a supply chain involves communicating with multiple stakeholders, from your warehouse to your suppliers. By connecting them all via one app, you can ensure crucial information gets into the right hands quickly, avoiding further delays and disruptions. Flip is an employee app that empowers you to do just that, and it doesn't require a company email address to join. All you have to do is share a link, and all of your vendors, suppliers, contractors, and employees can join to relay information from their desktops or smartphones.
2. Listen to your workers and implement their feedback.
No one knows your shop floor better than your operators. And yet, dozens of issues and inefficiencies never get reported, either because employees don't know where to report or they don't think it matters. For example, a factory worker might notice a bottleneck at a particular part of the production line and have an idea of how to eliminate it. If you never find out about it, that inefficiency will continue.
By creating a centralized repository where employees can submit feedback anytime, you’ll have a treasure trove of productivity-boosting ideas you couldn’t have gotten on your own. You can achieve this through surveys posted regularly to your employee app. To encourage employees to speak freely, you can even make these surveys anonymous.
Europart, the largest parts distributor for spare truck parts in Europe, customized its employee app to include surveys so it could garner feedback from its employees. "We've already been able to implement over 100 great ideas from employees that were probably previously just stuck in the company because of the staggered communication,” says Europart CEO Olaf Giesen.
3. Partner with educational institutions to build a talent pipeline
Manufacturing is currently suffering from a lack of available skilled workers. One reason for that is few job candidates get exposed to careers in manufacturing and assume it’s a low-skill, low-paying field (which, as you know, isn’t true!).
To get more interested candidates to fill your talent pipeline, start at the source: educational institutions. Partner with trade schools, community colleges, and universities to create programs where students can work for your company via internships or apprenticeships and set themselves up for success in the field of manufacturing (as well as ensure you have skilled workers to tap later).
For example, Daytona State College hosts the Federation for Advanced Manufacturing Education (FAME) program that's an earn-while-you-learn model for students pursuing an Engineering Technology Associate of Science degree. Program participants work for a sponsoring company while attending school and get job opportunities in manufacturing upon graduation. Sponsoring companies include Dougherty Manufacturing, Boston Whaler Inc., and American Radionics.
4. Keep workers safe (and productive) by making safety protocol easy to access
While it might be tempting to think cutting corners could save time and money, it just hurts your workers and their productivity, not to mention damages trust in you as their employer.
In 2015, Steve Ludwig of Rockwell Automation analyzed data from best-in-class companies (those in the top 20% of performance) and found that the ones that achieved the highest efficiency rates (90% OEE) also had the lowest injury frequency rate (just 0.05%)—nearly 18 times lower than average companies.
"Manufacturers can use safety as a productivity driver," Ludwig says. "They can drive profitability just by investing in keeping their workers safe."
One simple way to invest in safety is by upgrading your safety material distribution from paper to digital documents that factory workers can access no matter where they are. By using a mobile-first employee app, any worker anywhere can reach into their pocket and pull up procedures for what to do in an emergency, as well as alert others at the tap of a button.
5. Equip workers with the latest technology to make their jobs easier
Without digital documentation, workers at different departments or even locations can’t access the same documents, and things get overlooked. And without leveraging technology like robotics and AI, your workers’ tasks take longer than they need to.
Analyze your current workflows and identify where you can go digital to streamline processes. For example, if your workers are communicating on various non-secure platforms that weren't made for work, an employee app could make it easier and more secure.
A real-life example of this is from GLS Germany, a parcel service provider with around 9,000 employees and 550 transport partners. Before, crucial information would be delivered from headquarters to various depots. And then, from each of those depots, that information would reach transport partners via phone calls, emails, text messages, or written notes—a disjointed communication system. Now, communication is streamlined through Flip, connecting HQ, depots, and transport partners within one app. As a result, 41% of its employees say they're saving time.
6. Invest in employee training to boost efficiency
Having the right skills can instantly boost efficiency. Take machining, for example, where precision is paramount to reduce unwanted vibration.
“Effectively operating this sort of equipment requires knowledge of topics such as math, geometry and physics,” writes Tony Schmitz, Professor of Mechanical, Aerospace and Biomedical Engineering at University of Tennessee.
By providing training to your operators, you can see efficiency improvements almost immediately—and it doesn’t have to be costly. For example, America’s Cutting Edge provides free online and in-person training for machining.
7. Improve retention by offering flexible scheduling
Software company Epicor surveyed 600 factory workers and found that the number one contributor to their morale was access to flexibility in their schedule. Manufacturing employees want the same benefit that is now considered standard for desk workers: the ability to determine when and where they work. While it’s not always possible for frontline employees to work remotely, by re-examining your current scheduling practices, you’ll likely find that you can accommodate flexible start and end times.
Using an employee app with scheduling features makes it easy to do just that. Because all employees have access to the app from their smartphones, they can quickly see work schedules and drop and add shifts as needed—so your shifts are always covered, and your employees have the flexibility they crave.
Increase productivity in manufacturing by using the right tools
As you can see, the manufacturing industry faces a lot of productivity challenges that other industries don’t grapple with. The use of heavy machinery, for instance, creates potentially dangerous situations that can hinder productivity by harming workers or making them feel unsafe on the job. Additionally, manufacturers rely on raw materials that sometimes are unavailable, which is out of your control.
The number one recommendation for increasing productivity in manufacturing, then, is to focus on what you can control: the tools that you equip your workers with. By implementing an easy-to-use mobile-first employee app, you’ll ensure that every stakeholder—from contractors to employees to suppliers—stays connected, has instant access to information and resources they need, and is able to get their job done more efficiently.
Wondering how much not having the right digital tools is costing you? Find out via our free savings calculator.