Last updated on June 20th, 2023 at 09:50 am
Many manufacturing businesses usually work with set standards designed to reduce risks and ensure quality at all stages of the manufacturing process. However, in recent years, many businesses in the industry are beginning to prioritize risk-based thinking, especially due to various unexpected global events that have affected business operations. That is very important, as manufacturing accounts for 11.39% of the US’s economic output. So, if you have a manufacturing business, identifying and examining all possible risks and creating sustainable solutions should be one of the most important things you do. By doing so, you would be able to prevent or lessen the effects of any risk you may face. Here are six steps to help you reduce manufacturing risk.
- Create an emergency recovery plan
When you start a manufacturing business, one of the first things you should do is to prepare an emergency recovery plan that covers all the actions and activities your business will take in the event of a disaster. A typical plan should include budgets, important data, a list of supplies, resources, and all other items that might be affected by a disaster. You must also ask all other departments to assess their potential risks and provide solutions to those risks. For example, your operations department should have a risk mitigator for likely supplier delays.
If you don’t have a plan, you can draw up a quick checklist that considers the risks and impact of a potential disaster and use that as a backup until you can create a thorough recovery plan. If you have an existing plan, it’s always a good idea to review it periodically, as your business conditions are likely to change.
- Revise your insurance coverages
Insurance is important for all businesses; as such, all businesses must review their insurance coverages yearly. Your reviews shouldn’t be a glance-through that focuses on your coverage and financial limitations. Instead, it must be in-depth, analyzing big or small changes that your insurance provider has made in the past year. That way, you will know whether your current plan meets the needs of your business.
For example, if you operate in an area prone to bad weather, you should know that your most basic insurance policy probably might not cover damages caused by weather. These are all little details to consider when reviewing your existing policy, so keep this in mind. If you’re uncertain what type of policy might be good for your business, you can consult your business attorney or an insurance expert.
- Conduct regular production checks
Accountability is a big deal when working in the manufacturing industry. You are responsible for the product you bring to the market from inception to the final product. One of the best ways to ensure that you are always on track to producing quality items is by conducting periodic production checks.
Your production checks should ensure that your final product meets all requirements and market standards before being shipped out. To make the entire process much easier, there are several production tracking software programs that you can use.
- Evaluate your supply chain
Think about your suppliers. Do you have any that are located in areas that are popularly known to be high-risk? If you do, what are your plans to ensure that you obtain your important raw materials and goods in case there is a disruption? Even though you might have a trusted supplier, you must also have alternative ways of obtaining important materials that are crucial to your business. By regularly evaluating your suppliers, you will know what’s happening in the supply chain industry and be capable of anticipating changes.
You should get started if you haven’t been evaluating your supply chain. It would be best if you had a plan to guide you on where you would like to source materials and the items you will need from them. You must also ensure that you have a positive business relationship with your suppliers, as they might give insight into industry changes and lowered rates.
- Machinery training
Some workers will likely have to use machines or equipment in your manufacturing business to get their jobs done. It could be a relatively simple machine like a printer or something more complicated like an industrial production line. Regardless of the equipment, you must ensure that your workers receive in-depth training to comfortably and safely use machines without endangering themselves or others. Your business doesn’t have to be high-risk before implementing any training exercises. Even if it’s a small office, simple precautions such as keeping liquids away from electrical tools go a long way in ensuring that safety is assured. You must also ensure that your machines are in good shape with all parts working to make processes move seamlessly.
Another great way to keep your workers and visitors safe is by providing them with protective clothing, especially if they work in assembly lines. Creating hazards and other warning signs will make others aware of the potential dangers around them. Plus, it would save you from any accident-related expenses and lawsuits.
- Protect your IT infrastructure
Your IT infrastructure is one of the most important aspects of your business. Not only does it facilitate communication between workers and customers, but it is also useful in storing data. When your IT systems are destroyed, it can affect your business. Therefore, you must take the necessary steps to protect it properly.
If you keep documents physically, you can have backup cloud-based or offsite storage options. Protecting your business from cybersecurity attacks, including scams and phishing attempts, would be best. Ensure that your IT team regularly trains other workers and that all safety measures are in place.
Minimizing risks should be one of the most important tasks any manufacturing business should have. Understanding the potential risks will help you create an action plan that will keep your business going during the toughest times. It also helps you adopt a more proactive approach, as it identifies any potential causes and helps you prevent emergencies from occurring.