Manufacturing is regarded as the wealth-producing sector of the economy and requires a business owner that is committed to dedicating their time, energy and resources to making it a sustained success. Commercial manufacturing is a multifaceted enterprise; it uses specialized technology, machinery and equipment for various steps in the fabrication process, transportation, packaging, storage and equipment to move work-in-process inventory, as well as relevant tools and labour to produce goods for use or sale. This enterprise is different from running a retail shop, office, or service business; a manufacturing business needs specialized technical knowledge, diverse skills relevant to the type of product being produced, and a thorough knowledge of all aspects of running a business to move ahead of the pack or initiate new product trends.
While you may have a great idea for a product, if you can’t identify a strong sustained market for it beforehand, you are wasting your time and money. Spend time researching your target audience and obtain customers’ firm commitment in advance (preferably in the form of a written order supported by part-payment or an Irrevocable Promissory Note) that they will really buy and indicate the regularity of repeat orders; this will help you define your production and marketing strategies. Because manufacturing enterprises play such a prominent role in the economy (and in job creation), you might be eligible for tax breaks, incentive loan programs, government grants, and export initiatives. Liaise with the Department of Trade and Industry (DTI) to gather information on issues such as South Africa’s economic development, export opportunities and tax laws to see if there are ways you can benefit as you start your new enterprise.
Before starting your manufacturing business you should consider the location, marketing opportunities and civic infrastructure. Bear in mind that there is usually a substantial start-up cost involved in setting up a manufacturing business. It’s absolutely crucial to budget and take care of your overhead expenses, identify reliable suppliers of raw materials, and develop a brand identity to ensure the operation is consistently profitable. The skill-set and character traits of the business owner must be geared toward effective leadership in the manufacturing environment. Include in the planning process who you will target to buy your products, their expectations of the product, the price at which you can sell your products.
- Do you have the financial resources — or access to financial resources — to acquire machinery, equipment and raw materials, and appoint personnel?
- Do you have adequate capital to meet the running costs of the business while waiting for payment based on sales?
- It is important to keep abreast of industry developments by running regular in-house and external training programs for employees.
- A Research and Development (R&D) department is essential to keep a check on the life cycle of your products and to introduce new products to fit market expectations. To excel at manufacturing you must become a master of innovation.
- Can you envision a new use for your product?
- Strive to create a unique identity for your manufacturing business in the marketplace. Consumers need to differentiate your products from other competing products.
- It is important to comply with all regulatory laws, including occupational health and safety.
It is beneficial to implement lean production principles, derived from the Japanese manufacturing industry. The focus is on eliminating waste, improving productivity, and achieving sustained continual improvement in targeted activities and processes. The idea of lean production implies that small, incremental change, routinely applied and sustained over a long period result in significant improvements. This strategy aims to involve workers from multiple functions and levels within the organization, working together to address any problems as they occur and thus significantly improving the process. The team uses analytic techniques, such as value-stream mapping to identify opportunities and eliminate waste in a targeted process or production area.
Phase 1: Planning and Preparation. The first challenge is to identify an appropriate target area for a rapid improvement event. Such areas might include areas with substantial work-in-progress; an administrative process or production area where significant bottlenecks or delays occur; areas where everything is a “mess” and/or quality or performance does not meet customer expectations; and/or areas that have significant market or financial impact (i.e., the most “value added” activities). Once a suitable production process, administrative process, or area in a factory is selected, a more specific “waste elimination” problem within that area is chosen for the focus of the event (i.e., the specific problem that needs improvement, such as lead-time reduction, quality improvement, or production yield improvement). Once the problem area is chosen, managers typically assemble a cross-functional team of employees. It is important for teams to involve workers from the targeted administrative or production process area, although individuals with “fresh perspectives” may sometimes supplement the team. Team members should all be familiar with the organization’s rapid improvement process or receive training prior to its implementation.
Phase 2: Implementation. The team first works to develop a clear understanding of the “current state” of the targeted process so that all team members have a similar understanding of the problems they are working to solve. This process is called ‘value stream mapping’, which involves flow-charting the sequential activities (step by step procedure), material flows, communications, and other process elements that are involved with product manufacture or transformation (e.g., transformation of raw materials into a finished product, completion of an administrative process). Value-stream mapping helps an organization identify the non-value-adding elements in a targeted process. It is necessary to collect information on measurements of overall product quality; scrap rate and source of scrap; a routing of products; total product distance traveled; total square meter-age occupied by necessary equipment; number and frequency of changeovers; source of bottlenecks; amount of work-in-progress; and amount of staffing for specific tasks. Team members are assigned specific roles for research and analysis. As more information is gathered, team members add detail to value-stream maps of the process and conduct time studies of relevant operations (e.g., task-time, lead-time). Once data is gathered, it is analyzed and assessed to find areas for improvement. Team members identify and record all observed waste (material and time) by asking what the goal of the process is and whether each step or element adds value towards meeting this goal. Once waste or non-value added activity is identified and measured, team members then brainstorm improvement options. Ideas are tested on the shop floor or in process “mock-ups” (prototypes). Ideas deemed most promising are selected and implemented. Team members should observe and record new cycle times, and calculate overall savings from eliminated waste, operator motion, part conveyance, square meterage utilized, and throughput time.
Phase 3: Follow-up. A key part of the implementation process is the follow-up activity that aims to ensure that improvements are sustained, and not just temporary. Team members routinely track key performance measures to document the improvement gains. Metrics often include lead- and cycle-times, process defect rates, movement required, and square meterage utilized. As part of this follow-up, personnel involved in the targeted process are tapped for feedback and suggestions.
Ideas for a small-scale manufacturing business:
- Smart Factory
Small- and medium-sized factories are the life-blood of modern economies. Entrepreneurs are encouraged to develop ‘Smart Factories’ that will change the domestic manufacturing landscape by merging information technology with manufacturing technology, thus heralding a new age of productivity and product customization. Smart factories thrive on clean production designs and delivery solutions for green chemicals, sustainable materials and environmentally preferable products – driven by a systemic method for the elimination of waste. Companies can no longer afford to dispose of valuable waste in landfills. In most instances this adjustment from conventional factories to smart factories requires a complete rethink of resource-saving, from product design to utilizing material flow analysis methods, to recycling or repurposing revenue-generating waste and waste materials. For example, a factory making food products could utilize by-products to produce animal feed and organic compost. Sustainable ‘ethical’ fashion is another example of a smart factory enterprise. Specific factors that distinguish ethical from traditional fashion include the utilization of sweatshop-free labor, energy-efficient processes, eco-friendly fabric, low-impact dyes, and minimal carbon footprint of product transportation. Organic fabrics such as cotton, bamboo and soy are labelled sustainable due to new technologies and farming methods [no-till farming reduces soil erosion, improved irrigation methods reduce excessive water usage, recycling and addressing energy efficiency and waste, and improved methods of pest management]. Read Entrepreneurial Spirit [blog post].
- Design and make a selection of fancy dog collars and coats
Items like these can be made from a variety of materials. Produce a range of sizes for different breeds of dog and package in cellophane bags. Sell through pet shops, department stores and mail order advertising.
- Design a range of comfy beds for pets
Come up with something new to catch the attention of pet owners. Start off by selling your creations at craft fairs and mail order and through pet stores when firmly established.
- Use wood logs to make rustic bird tables, bird boxes and feeders
Check out the designs already on the market and make yours different and better. . Set up a small production line to build up enough stock to establish an eye-catching display at garden centres.
- Make fibreglass character props for commercial use
These character props are ideal to use as giant displays to create brand awareness and to advertise a business. For example, a large ice-cream cone could be used alongside the company sign of an ice-cream shop or manufacturer. Or how about a large pizza to represent a pizza take-away. The possibilities are numerous. Write a business plan first and do some market research by canvassing commercial and industrial outlets.
- Design and make unisex bath robes
Design full length bath robes with a stylish machine embroidered motif. Contact all hotels to see if they want to have their logo machine embroidered onto the garment, to sell to guests. Or sell on line in sizes XS to XXXL (made on order only). Towelling is a good choice for fabric, in black and white.
- Design and manufacture work overalls
You should have enough knowledge about the clothing industry to know what equipment is required to set up a small production line in turning out overalls as required by different businesses. Be prepared to undertake custom designs to accommodate corporate colour combinations, machine embroidery, and sewn-on business logos or identity tags. Start by canvassing local businesses such as security firms, cleaning services, delivery services, and garden cleaning teams. You will need to take on extra staff and purchase more machinery as the business expands.
- Design, make and sell aprons in various styles
Think cookery aprons, woodworking aprons, waitress aprons, gardening aprons and barbecue aprons. Designs can be themed (machine appliquéd , frilly, humorous or practical. Explore your creativity; design classic floral patterned women’s aprons, waist aprons, bistro aprons, bib aprons, and cobbler aprons. Products could be sold through various shops or direct to businesses such as hotels and restaurants who require these items of clothing. An apron is also effective as a branded staff ‘uniform’ in businesses such as gardening centre, hair salon, and tea room.
- Start a business manufacturing concrete slabs for gardens
This is a great business for someone with plenty of energy; it can be started part-time, at little cost, and quickly develop into a lucrative full-time business. To get started you’ll need a few moulds and some raw materials for mixing and casting. Embed small decorative ceramic tiles in the concrete or make impressions in the concrete by pressing large overlapping leaves into the concrete (to be removed when set) to create unusual slabs. You’ll need to work in an area where you will not be disturbed; it’s also quite messy work. Make square, rectangle and round slabs. Sell your finished products direct to the public; distribute some printed leaflets in your neighbourhood. Develop the business to reach a regular high volume of concrete slabs and sell in bulk to building and gardening supply outlets.
Contact Theresa (email@example.com) to create a Business Plan for your manufacturing concern.