Manufacturers who wisely invested in manufacturing inventory software over the past few years are being generously rewarded for their foresight. As the economy recovers, these manufacturers are poised to take advantage of growth opportunities because they’ve slashed costs without hampering their production capabilities.
There are several signs that the manufacturing industry is really picking up, such as the amount of non-defense equipment increasing 2.9 percent in December after two straight months of declines, according to the Wall Street Journal article “U.S. Market Shines Brighter.” Plus, engine makers, construction firms and equipment rental companies are getting a higher number of orders than usual.
These companies are gearing up for action, thanks to their smart planning. “After keeping a tight lid on costs for the past few years, many other companies are expanding capacity to meet rising demand,” the article notes.
The big test for manufacturers during the recession was to keep costs down while retaining valuable employees and equipment. Many manufacturers used manufacturing inventory software to save money by bringing their inventory levels way down and streamlining production processes with automatic work orders, bills of material and more.
Now that demand is beginning to pick up, these manufacturers have the tools to produce goods faster and to make sure they always have the right amount of inventory to meet demand. These are big competitive advantages.
Good News, Bad News
As it becomes less cost-effective to produce the majority of their goods in cheap-labor countries like China, manufacturers are changing their strategy. Instead of bringing all the jobs back to the United States, many are simply using their manufacturing plants in China to make goods that will be sold to the Chinese while using their American plants to make goods to sell to Americans. This saves on transportation costs and avoids the trouble of relocating workers and building new facilities.
The good news is this means some jobs are coming back to America, but the bad news is others are permanently gone. Hopefully workers in the manufacturing will continue to adapt to these changing conditions and thrive in a more high-tech environment that demands new skills. If companies can do it with new technology, people certainly can with more education and job skills.
Make sure your manufacturing company can take advantage of the economic recovery by using manufacturing inventory software. Sign up for an inventory software demo today.