26 Tips for Small Manufacturing Business Owners in

2020

The small manufacturing business has become an increasingly common sight in

the small business landscape. The route to becoming a small manufacturer has
become very accessible in recent years. Manufacturing businesses with 20 or
fewer employees have also seen promising growth in the past years.
Dear ambitious manufacturers,  
As another year is (already) drawing to a close, we thought we’d reflect on the
past year in the world of small-scale manufacturing.  
As an owner of a small manufacturing business yourself we’re sure you’ve
had your fair share of challenges and surprises during 2019. It goes with the
territory of owning any small business.
As the global economic and political landscape continues to shift in new and
unexpected ways, it’s no time to sit back and be complacent.  
For example, there’s been turbulence for the manufacturers who have been
using outsource manufacturing, or even just simply buying their materials from
China, as there has been an ongoing US-China trade war, which has been
affecting many different industries.   
This alone is enough of a threat for businesses to figure out how they can fully
optimize their practices to survive periods such as this.  
That’s why we’ve put together a list of small business manufacturing tips to
help you make it through 2020.  
Small businesses are an essential part of the economy:  
For example, they generate 65% of new jobs.  
And they make up the vast majority of total businesses, which
includes your small manufacturing business.  
Your role in small business manufacturing is an important one, as demand for
well-crafted and artisan products continues to increase. 
A Review of 2019 for the Small Manufacturing Business 
So, what has been going on?  
We’ve seen new industries continue to rise and play an even bigger part of our
lives. Two to watch are 3D printing and drones. Both industries have a multitude
of uses, and both have become very accessible and affordable to the average
person.  
The growth of blockchain, along with advances in AI and robotics, will
change how all businesses operate, including in small manufacturing.  
2020 could be a very important year in the world of small manufacturing, as
we see the results of economic policies in the US on the world’s economy.  
The results remain to be seen, but at the minute manufacturing is looking
strong.  
People are positive about the role of manufacturing in the future of the US
economy. This is a great time to own a small manufacturing business and show
the world how unique and awesome you are.  
One of the biggest challenges a small manufacturing business faces is
competition from larger enterprises, both at home and abroad. But some things
are easier for those in small manufacturing.  
You can be more adaptive, more dynamic, and run rings around the slower
competition.  
You have lower manufacturing costs and manufacturing overheads and have
the freedom to experiment. Because you’re in charge.
Becoming a small manufacturer has never been more accessible. That’s why
more and more people are choosing to do it.  
This is great news! 
It means that the future of manufacturing is small manufacturing and 2020
could be the best year ever for makers, crafters, and artisans. 

Not all small manufacturers wear overalls. Stella Soomlais has developed a
thriving leathercraft workshop based on a philosophy of efficient, high-quality
crafting and close to zero waste. She also uses expert marketing to make her
small manufacturing workshop known around the world.
Tips for Small Manufacturers in 2020 
We’ve split up these small business manufacturing tips into several categories
as follows:  
— Inventory Management;
— Workshop Productivity;
— Employment Practices;
— Marketing and Customer Engagement; and
— E-Commerce.  
Let’s get to it.  
Inventory Management  
1) Focus on supply chain management — Manufacturing supply chains are
becoming more complicated with multiple suppliers and overseas shipping
being commonplace. It pays to invest time into making sure this is watertight.
Also, accept that emergencies can happen which leads to a supply chain
breakdown. Develop your small manufacturing business’ policies to deal with
this before it happens. This could be having alternative suppliers, storing stock
off-site such as having inventory on consignment or having a reasonable
amount of safety stock.  
2) Manage production to cut down on lead times — Prioritize your small
business manufacturing order queue, so your staff is always logically working
on orders. When a supply order comes in, assign it to the first orders in your
queue to minimize prolonged work-in-progress (WIP) manufacturing and ship
products faster.  
3) Don’t keep inventory lying around — It’s fine to have indirect materials
(like MRO)  always on-hand. But keeping lots of bulky stock around is costing
you money. Find a way to cut down on carrying costs as these provide zero
value to your product or business.  Perhaps you can get more frequent but
smaller orders for no additional shipping costs.  
4) Don’t invest too much in inventory — It's better to have the cash-on-hand.
Find out how to calculate reorder points accurately for your business to negate
the need for it. Realize that having extra inventory is an opportunity cost.  
5) Be honest about your dead stock — If you have obsolete stock, then be
honest and cut your losses to free up space in your workshop.  
6) Learn how to judge the value of a supplier — A supplier that seems more
expensive but is more suitable for your small manufacturing business needs, is
more valuable to you than one that isn’t. Negotiate with your suppliers to put
the above tips for small manufacturers into practice. If you don’t ask, you don’t
get. 

Workshop Productivity 
7) Figure out the type of BOM you need — Bill of Materials (BOM) is an
essential part of your Master Production Schedule (MPS). There are many
types of BOM: modular, configurable, multi-level, the list goes on. Find out the
best way to update your BOMs so they are easier to maintain and use in your
business.  
8) Learn the 5S’s — Lean inventory, a methodology originated in Japan and
can increase your small manufacturing business’ productivity. Spend some time
observing your workshop and employees. Where are the lost seconds that add
up to lost hours? Make sure you have the fundamentals optimized with the
next 5 tips.  
9) Seiri (Sort) — Remove unused items in an area to make sure employees are
not rummaging through stuff to find something. Classify items by frequency of
use. More commonly used items should be easier to access and close
together.  
10) Seiton (Straighten, Set) — Everything has a place and is always put back
in its place. When your employees need a tool, they know exactly where to find
it. If it is not there, they know it is in use, and don’t look for it. Of course, with
adequate production planning, there is no need for employees to be fighting
over tools. Find hierarchies and systems of storage, e.g. place heavy items
lower, and so on.  
11) Seiso (Shine, Sweep) — Create a clean workshop. Get rid of any dust and
dirt. Have a system to regularly remove garbage from your workspaces. Make
cleanliness a daily activity and set aside a small amount of time each day to it.
Maintain proper lighting, so dust and dirt can be seen. This will promote
productivity. You and your employees will have pride in their workplace, which
will shine through in your product.  
12) Seiketsu (Standardize) — Standardize by having a clear, readable, and
accessible bill of materials (BOM) / product recipe. Make scheduling and
operations clear through visual management. You can get software that uses a
visual streamlines “Kanban” board system to make everything crystal clear.  
13) Shitsuke (Sustain) — Now you have dotted the I’s and crossed the
T’s, one more challenge remains. You have to keep all the great habits up. Set
out clear policies and guidelines, and make sure your staff knows what your
standards are. This is how you cultivate a good company culture with staff that
is proud to say they work there. 
14) Always have something left in the tank — Keep your small manufacturing
business’ productivity below 100% capacity, so you can always keep up if you
see a sudden spike in demand. 
Employment Practices 
15) Emphasize great communication — Make it open, honest, and a two-way
street with your staff. Make your employees feel comfortable to voice their
opinion. The result? They will feel more respected, and you will know about
problems you might not have known about otherwise.  
16) Invest in your staff — Provide opportunities for learning and training for
a more flexible workforce in your small manufacturing business. You can fill
any skill gaps and improve employee turnover. If you have employees that can
operate all your machines and do all operations, you can reduce lead times by
changing up staff tasks at a moment’s notice. Let your small workshop be
super-efficient in 2019.  
17) Take on an apprentice or an intern — A survey of CEOs found 80% of UK
CEOs are worried about being able to attract the right kind of talent, and 63%
are using apprenticeships and internships to try to fill this gap. In fact, they are
seen increasingly as a positive alternative to university for young people.  
Marketing and Customer Engagement 
18) Get your website seen — Have a great-looking and functional website?
Great. Is anyone looking at it? If your views are less than stellar, it could be
because nobody can find it. Learn about search engine optimization (SEO) to
remedy this (and use the following tips for small manufacturers below).  
19) Become a writer — A blog is a way to let customers find you and become
interested in your product. It makes your small manufacturing business more
personable, and a known brand in your industry.  
20) Use video to show your company’s best side — They say a picture is
worth 1,000 words, so a video must be worth a shed load. Explainer videos are
professionally animated and voiced-over videos that explain your product to
potential customers. They have been shown to significantly boost sales.   
21) DIY awesome product photography — There's no need to spend
hundreds or even thousands on a professional photographer when the
equipment is affordable and the resources to improve your photos are free.
22) Connect with your community — Market in more personal ways. Go out
into your local community, go to trade fairs, host events and workshops.
If you use your creativity, the possibilities are endless.  
23) Collect customer opinions — Offer a way for customers to get in touch
with you online or off. This is a great way of finding out how customers perceive
your small manufacturing business and get invaluable advice for improvement.  

One of the best small business manufacturing tips for 2020 is to use great
photography to present your products in the best light possible. More and more
small manufacturers are using apps like Instagram to communicate directly with
customers, so what are you waiting for?
E-Commerce 
24) Diversify your online store portfolio — Now you’ve become a master of
Shopify, you have the expertise to expand to other online platforms, and
marketplaces like WooCommerce and Etsy.  
25) Offer different product versions — With different pricing, to increase
your audience.  
26) Beef up your cybersecurity — Two-step authentication is simply not an
option. Make sure you invest in securing not only your data but your customer’s
data too. Think about hiring a consultant to make sure everything is up to
scratch. 
PRO TIP: Managing inventory on Shopify is not an easy task for makers,
manufacturers, and artisans. Be sure to check out our ultimate guide for
manufacturers for selling on Shopify to optimize your online store.

A New Year for Your Small Manufacturing Business  

There you have it. 26 handy small business manufacturing tips for 2020.
Some are timeless pieces of advice, others are brand-new — all are useful
when applied correctly.  
You don’t need to incorporate them all at once into your small manufacturing
business. First of all, you need to look at what you currently do.  
Really observe what is going on.  
Take notes, quantify what you didn’t previously quantify. Figure out what it all
means. If you immediately start tweaking here and reorganizing there without
planning or scheduling, you might do more harm than good.
With the right tool, you can avoid any seasonal rushes, not get swamped with
invoices or backorders, manage inventory (finished goods and raw materials)
and synchronize your sale channels onto one easy to understand, visual
dashboard.         
Katana’s Smart Manufacturing Software is such a tool that can provide you with
these features and many more. Why not check it out for yourself? Katana offers
a 14-day free trial, so you can see first-hand how it can benefit your small
manufacturing business. 
The responsibility is in your hands to figure out what your small manufacturing
business needs.  
The top management consultants in the world take weeks or months to observe
how the business currently operates before they open their mouths to suggest
anything.
Take your time and don’t forget to really take customer feedback to heart. How
your small manufacturing business is run will show in the customer
experience.  
Have a pleasant, stress-free, productive, and successful 2020.  
And Happy Manufacturing!