Manufacturing

Manufacturing is an integral part of many developed economies. Yet in many of these economies, the manufacturing sector is being termed a ‘sunset industry’. However, this perception of manufacturing is becoming as outdated as its traditional model that focused on increasing output at a lower cost per unit. Today, innovation and ingenuity is the cornerstone of any successful manufacturer, and with that comes a focus on advanced design, sophisticated technology to continually improve processes, and a move towards mass customisation.

Issues

While manufacturing is unlikely to revert back to its glory days, with significant investment, energy and entrepreneurship, the industry could transform in line with an increasingly global economy. Manufacturers recognise they need to adapt and reshape their businesses, and not rely on a reversal of fortune from a declining dollar or an increase in government subsidies. However, many do not have the financial capacity to restructure their operations.

Questions that should be asked

Manufacturers can take practical steps now to strengthen their business and increase their chances of future success by adapting to this new environment. Innovative management in a tough market may lead to opportunities for future business, especially when local competitors have closed down. Manufacturing businesses should ask the following questions:

  • How can I optimise my current business model to compete in this environment? What will be my competitive advantage?
  • How can I streamline my supply chain to maximise productivity and control costs, and should I be considering outsourcing or insourcing?
  • Is there scope to collaborate with complementary businesses to maximise underutilised capacity and to improve efficiencies?
  • What is the status of my relationship with my financier, and what steps should I take to build their support for my short-term challenges and long-term strategy?
  • How can I commercialise our manufacturing expertise and expand into new markets or geographies?

Our expertise

PPB Advisory’s manufacturing specialists have an extensive understanding of the key issues and risks associated with the industry. Some of our team members have more than 25 years industry experience and have hands-on operational experience managing manufacturing facilities. We also advise on business optimisation strategies, and work alongside management and boards to improve profitability, working capital and cash flow, as well as focusing on managing post-acquisition integrations and associated synergies.
 

 

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