Reallocating Resources in Your Fabrication Shop

September 10, 2015 / , , , , , , , ,

If there is one operational pain point that every manufacturing executive faces, it’s resource allocation. From a strategic standpoint, it would be ideal for managers to make continuous changes within their operations, both in terms of equipment assets and human capital. However, budget and time constraints, an unstable market, and labor shortages are making it more difficult than ever for managers to gauge if and when resources should be reallocated.

In fact, according to research from McKinsley Quarterly, most companies rarely shift resources at all, even during times of financial crisis. Instead of making adjustments, many executives tend to “play it safe,” resist change, and, as a result, often limit their company’s growth potential.

If this sounds familiar, perhaps it is time to take a closer look at how you are distributing resources within your fabrication shop. Do you find yourself using the same strategies you have used for years, or are your tailoring your strategy to today’s market trends? For example, are you allocating more resources to your human capital to prepare (or respond) to the widening skills gap? What about technology? Are you considering new investments in software, automation, or other metal-cutting advancements to increase productivity or expand your market reach? Today’s leaders need to be sure they are making strategic choices that benefit both the company and employees, while avoiding the trap of making allocation decisions because “that’s the way they’ve always been done.”

Of course, the challenge is figuring out which investments will generate the best return. While there is always an element of risk to any strategic decision, the following are a few best practices today’s managers should consider when reallocating resources in their fabrication shops: