Balancing the Books and Budgeting in 2021

Balancing the Books and Budgeting in 2021

We are less than two weeks into the New Year and while we are still adjusting our expectations for the economic impact of the ongoing pandemic, it’s a good time to consider your annual budget. Determining the right amount of raw material for current demand is hard enough in a “normal” year, so it’s safe to say it is one of the biggest challenges currently facing the manufacturing industry. Particularly for small to medium-size manufacturers, having a budget helps everyone to work towards the same goal and prepare for unexpected disruptions. This process helps answer critical questions about what the next 12 months will look like. What are your future projected sales? Are you expecting margins to improve next year? Do you plan to hire or fire employees? Do you have any significant upcoming capital expenditures? Planning now means smarter saving and spending for the next 12 months. To succeed in a highly competitive market, you need two things to be in sync. Your team and your technology.

Keeping Communication Consistent

In a survey of more than 1,500 small to mid-sized manufacturing company CEOs, 82% said that speaking to their employees was challenging. How can you leverage what’s at your fingertips to save time and money? Utilize enterprise messaging apps and other mobile tech to gather feedback from employees on the floor to stay in constant connection. A recent Google white paper report reveals 53% of frontline workers use messaging apps such as WhatsApp and Facebook Messenger up to six times a day for work-related reasons, but 68% of them said they’d stop if given approved instant messaging apps for corporate communication tools. This data clearly shows that frontline workers need a way to communicate while they’re at work. Consider adopting a platform that will allow you to streamline training, offer real-time company updates, improve collaboration, and build company confidence. As AI and manufacturing technology systems advance, these tools can boost employee productivity and efficiency. Staying connected and creating a flow across factory floors is crucial if you want to succeed in the coming year (and decade, for that matter).

Make the Most of Your MRP

Computer-based inventory management or material requirements planning (MRP) is designed to improve productivity, estimate quantities of raw materials, and schedule deliveries. MRP is designed to answer three questions: What is needed? How much is needed? When is it needed? This process allows your business to plan more accurately by tracking product series, managing quality levels, expiry dates of materials used, transparency in overall processes, and standards. Keep in mind the system that makes sense for your unique needs, size, and budget will vary. Here are the top three ranking systems based on the latest industry reviews, for you to explore:

1. Fishbowl Manufacturing

Fishbowl Manufacturing is a business automation and inventory management platform for small to midsize manufacturing companies. The app offers QuickBooks integration for accounting management, as well as tools for inventory control, MRP, and job shop floor control/manufacturing execution. It is an inventory-centric system, with features for barcoding, asset management, raw materials management, and customized reporting. It automates the quoting, ordering, and purchasing processes.

2. Oracle Netsuite

NetSuite Manufacturing Edition offers an integrated inventory, warehouse management, accounting, and financial management, order management, customer relationship management (CRM), and an e-commerce platform. Offered as a cloud-based solution and delivered over the web, NetSuite can be used by manufacturing businesses to manage production orders, ensure base inventory level restocking, and ensure the success and quality of special orders. In addition, the system also supports inventory for multiple locations, assembly management requirements, bill of materials, work order management, diverse methods of measurement, barcoding procedures, and other necessary business processes in the manufacturing industry.

3. E2 Shop System

E2 by Shoptech Corporation is a manufacturing solution that offers scheduling, purchasing, shipping, customer management, and accounting. It’s designed specifically for job shops, contract, and a variety of make-to-order manufacturers. E2 estimating allows users to create both “quickie quotes” and complex estimates on labor, overhead, material, etc., that can be faxed or emailed with attached drawings or pictures. These quotes can be automatically turned into orders, with no double entry required. E2 automatically generates shipping labels and packing slips and then tracks shipments online to multiple shipping addresses.

Integrating your personnel communication with your technology workflow can feel overwhelming and tedious when you’re reevaluating your annual budget. But by forming a plan now, you will be able to better anticipate future growth and better navigate financial speedbumps. We hope these ideas will inspire new action plans to help your team succeed. As you support your business, we are here to support you. Contact our dedicated team today and get answers to financial questions with a free consultative appointment.

The Right Road to Recruiting

The Right Road to Recruiting

There are defining moments in history that shape generations. Like flashbulb memories, some events crystalize in our brains, and we can recall “where we were” when we heard the news that changed our world. Without a doubt, 2020 has been a sobering experience for every American, regardless of their age or background. But for members of Generation Z (people born from 1995 to 2010) who are just entering the workforce, this year has made an indelible mark on their future career paths, priorities, and what they are looking for in an employer. What does this mean for your business? As construction industry leaders, it’s time you prepare your company to welcome and understand the new priorities, needs, and values of this incoming workforce. Otherwise, a huge employee gap will leave you and your bottom line vulnerable in the years to come.

Stand Out

Salary is important. But if posting paychecks is the extent of your recruiting tactic, think again. Studies show that work-life balance trumps salary alone for Gen Z. On average, 38% of Gen Z members consider work-life balance as their number one factor in choosing an employer. If you aren’t already prioritizing your company culture, it’s time to reassess what makes your business shine. From mental-health days to employee assistance programs, to community activities and more, companies need to be better-rounded if they want to attract dynamic talent. To truly stand out to Gen Z, a heavy emphasis should be placed on opportunities for professional development and the chance to grow with the company, along with an inclusive and collaborative environment. Remember, members of Gen Z want to feel like they are making a difference. If your operation is advertised as a place to clock in and clock out at the end of the day, you’re destined to become an undesirable workplace. A high turnover means heightened costs for you, the employer. For example, replacing a mid-level employee can cost 20% of their annual salary, meaning a $60,000 per year manager can cost about $12,000 to replace. To attract (and retain) talent, build in additional incentives. What impact can your employee expect to make on your community, and how can you help them to advance both personally and professionally? These are the tough questions you need to be able to answer come interview season.

Reach Out

What is your team doing to increase visibility? Communication is key. Utilize social media platforms to allow Gen Z members to consider your company. Not on LinkedIn? Create your company profile today. Not on Facebook or Youtube? Consider adding social channels to showcase the exciting work your crew is accomplishing. Generation Z is known as the first true digital natives – the internet, social networks, and mobile devices have been a part of their reality since day one. If it’s difficult to connect with your business, there are hundreds of other more tech-savvy options out there for recruits to explore at the click of a button. Once you master reaching out digitally, interact in-person (or from a safe, six-feet apart during the pandemic, of course).  Contact local school district leaders and volunteer for virtual or in person career day events at middle schools, high schools, and colleges. Elevate your internship programs or develop a new program so kids can discover the opportunity that awaits them. New data shows that fifty-six percent of interns and 40% of co-op students turned into full-time, entry-level hires in 2019.

Given the industry’s aging workforce and an unprecedented number of retiring owners, contractors need to do everything possible to recruit young employees into the industry. It’s crucial to take the time to methodically map out recruiting efforts before you’re in a desperate hiring predicament. Recruits need to understand that the construction industry doesn’t just offer temporary job placement, but successful, rewarding career paths – and it’s your responsibility to make sure they know that.