Is your job shop manufacturing business as efficient as it could be?

The job shop manufacturing sector in Australia is a significant part of the overall manufacturing industry, creating unique products with tailored specifications. However, job shop manufacturers face a variety of challenges that can impact efficiency and customer satisfaction.

According to a 2019 study by Cloud Elements, 55% of respondents believe API integrations are "critical" to their operations. ERPs are one of the top three business use-cases for API integrations.

The Shift in Australia’s Manufacturing Landscape

Since the 1980s, Australian manufacturing has undergone significant changes, primarily due to globalisation. In the past, Australian manufacturers produced most products, from cars to machinery.

Today, competition in Australia's job shop manufacturing sector primarily comes from local companies. While foreign firms try to enter the market, the costs of making unique products overseas and shipping them to Australia can be too high. As a result, it's often more cost-effective to produce these items locally.

For local manufacturers to succeed and grow, they need to add more options to their product range, making Australian job shop manufacturers work harder to keep customers satisfied.

Job shop manufacturers grapple with several key challenges:

Retaining Skilled Workers: Attracting and retaining skilled employees has become increasingly difficult in Australia. These roles require specialised skills in operating machinery like lathes, drills, and welding equipment. Job shops have stringent safety requirements, so workers need to have safety protocols "ingrained in their psyche" from prior manufacturing experience.

With automation, job shops can rely more on machines to reduce their reliance on scarce skilled labour. But for job shops who fail to modernise, attracting and keeping experienced manufacturing employees will be a persistent hurdle for job shop owners.

Customer Loyalty: In the past, Australian customers often remained loyal to local manufacturers. With increased competition, customers are more likely to switch providers if they feel their needs are not being met. Customers are now more willing to switch providers if they find a better or more cost-effective solution elsewhere. This shift places additional pressure on manufacturers to deliver quality service consistently.

Capacity and Lead Times: Managing capacity and lead times is a constant balancing act for job shop manufacturers. Australian companies need to understand their production capacities to provide accurate lead times. Without efficient scheduling, businesses may inflate lead times to manage customer expectations, potentially harming relationships.

Advanced scheduling software has been helpful for job shops in managing capacity more effectively. These systems allow better understanding of available capacity and resources to make more informed commitments to customers.

Managing Backlogs: While backlogs of orders have improved, lead times remain a concern in the Australian market. Low inventory or capacity can cause order delays, prompting companies to rethink their scheduling to reduce wait times.

Rather than just accepting any order and adding it to a growing backlog, job shops are now more proactive about discussing lead times and capacity constraints with customers. This helps to avoid over-committing and ensures they can deliver on their promises.

Job shop manufacturers in Australia can overcome challenges by adopting several key strategies. Investing in technology, such as automation, enhances efficiency and reduces costs. Ongoing employee training is essential for keeping the workforce skilled and adaptable.

Adopting lean manufacturing principles can minimise waste and optimise workflows, while building strong relationships with suppliers and customers fosters better communication. Expanding product offerings helps mitigate market risks, and leveraging data analytics provides insights for continuous improvement.

Effective scheduling is critical for Australian job shop manufacturers aiming to meet customer demands and enhance sales. Effective scheduling allows them to maximise their production capacity and reduce lead times.

Without proper scheduling, job shops often struggle. Even a simple metal fabrication job that takes a day could become a 1,000-day backlog if not managed properly.

To counter this, Australian job shop manufacturers must optimise their scheduling by allocating resources wisely. This includes optimising the sequencing of different production steps and allocating the right resources to minimise delays. By assessing the shop floor's capabilities, they can determine how many tasks they can complete in a given timeframe.

Using dynamic scheduling systems helps businesses manage operations efficiently and respond quickly to customer orders. By understanding their capacity through scheduling, jobs shops can commit to delivery dates that competitors may not be able to match.

Jobs shops need to be proactive about their scheduling and communicate transparently with customers. For example, if a manufacturer realises that an order will be delayed, it’s crucial to inform the customer as soon as possible. This allows customers to adjust their plans and maintain their long-term trust in the manufacturer.

Utilising scheduling software can significantly enhance a company's ability to manage lead times effectively. With a clear view of the production process, job shop manufacturers can spot potential delays early and inform customers.

This proactive approach not only helps retain customers but also strengthens relationships by fostering transparency and reliability. Customers are informed ahead of time rather than being surprised by late deliveries.

Bottlenecks can severely disrupt production flow and impact overall efficiency in Australian manufacturing. These constraints occur when a particular stage in the production process cannot keep up with demand, causing delays downstream.

To address this issue, Australian job shop manufacturers must find bottlenecks and resolve them quickly to sustain efficiency. This might involve cross-training workers. By training workers to be multi-skilled, they can move people around to eliminate the constraints.

Embracing new manufacturing technology helps reduce bottlenecks by streamlining processes, giving transparency over production progress and identifies issues straight away to take corrective action.

By addressing these critical points in the production line, manufacturers can enhance workflow and minimise downtime.

In the past, job shops would often use a batching approach, where they would wait to accumulate multiple similar orders before manufacturing them together. This allowed them to take advantage of economies of scale. However, this led to issues, as the first orders placed would have to wait a long time before being produced, creating backlogs.

Nowadays, there is more negotiation between the job shop and the customer around lead times. The job shop proposes a specific lead time. If the customer agrees, the job shop plans what they can realistically manufacture within that timeframe, rather than waiting to batch a large number of orders.

Job shops have also moved away from pure custom manufacturing towards producing "less than totally unique" products. These can be batched and manufactured more efficiently, while still meeting customer needs. This is a shift driven by competitive pressures and the need to manage lead times and capacity.

Identifying sub-assemblies is another strategy to improve lead times and efficiency. Job shops will look at the range of products they manufacture and identify common sub-assemblies that can be pre-built.

This allows them to have these sub-components ready to go, rather than having to build them from scratch for each unique order. Job shops can leverage economies of scale and have inventory ready to integrate into the final customised product. This reduces the lead time to fulfil a customer's order, as the job shop has the sub-components already produced.

ECI Solutions' ERP software solutions are particularly distinct from those used in high-volume manufacturing environments.

Traditional systems focus on machine efficiency and repetitive processes. Our JobBOSS² solution emphasises detailed tracking of unique production steps, allowing manufacturers to optimise manufacturing processes, material usage and manage costs. This focus on comprehensive documentation supports precision and flexibility in custom manufacturing settings.

JobBOSS² centralises information and automates processes, from purchase orders to production scheduling, tracking, testing, and shipping.

It also enhances production planning by providing real-time data and analytics, enabling manufacturers to optimise schedules and manage resources efficiently. Effective supply chain management ensures timely delivery of materials, helping to meet production schedules and customer demands.

We continuously improve JobBOSS² by monitoring the market for unmet needs and challenges faced by job shop manufacturers. We enhance our ERP software to better address user-specific issues, ensuring it remains relevant and effective in supporting their operations.

A key phrase that resonates with many is, "You don’t know, what you don’t know." Job shops may excel at producing unique goods and believe they have adequate system support. Only when they step back and critically evaluate that they discover whether their current systems truly meet their needs.

This reflection can reveal gaps in their understanding and highlight areas for improvement in how their business operates.

ECI Solutions has been supporting Australia’s job shop manufacturing sector for more than 30 years. We provide cloud-based ERP solutions that streamline operations and enhance productivity, ultimately contributing to quality management and business processes.

Our expert team specialises in guiding Australian manufacturers through the entire ERP implementation process. We offer seamless integration, tailored solutions, and comprehensive support that helps you streamline operations and boost efficiency. Our focus is to help manufacturing businesses to adapt to market changes effectively.

Streamline your business with the most proven job shop manufacturing software on the market.