Gearing up for growth - Overcoming the challenges

A lot can happen in a few months. Earlier this year, the UK’s manufacturing industry was in the doldrums: a slump in business confidence in the final part of 2024 had sent a chill through the market, with firms seeing a drop in both orders and output in the first quarter of the year. As a result, half had put a freeze on recruitment and a third were delaying their investment plans. By June, however, the sector was rallying. Across all regions of the UK, manufacturing output was up for the first time since 2019, with defence and aerospace driving growth and 12,000 new manufacturing jobs created.

Despite the challenges of recent years, nearly two-thirds of SME manufacturers plan to grow. But while scaling up is an exciting journey for any business, it’s also a time when cracks can start to appear – delays, quality issues, stretched teams and cash flow headaches are all common symptoms of trying to expand without first establishing good processes.

As we’ve seen in our Summer Rewind blog series, summer is the perfect time to take a step back and tackle your challenges, including your barriers to growth. But what are they and how can you overcome them?

Challenge 1: Data in siloes

Spreadsheets are great for simple tasks (like planning a summer barbecue) but not for complex manufacturing operations. Different departments, like production, sales and finance, have their own ways of recording and managing data, which runs the risk of inconsistencies, inaccuracies and duplication. Data stored in multiple spreadsheets and formats is also difficult to share, which can cause problems as you start to scale. Your sales team, for example, might over-promise on delivery times unaware that there isn’t enough production capacity to fulfil orders, especially during holiday season.

An ERP solves this problem by bringing all your data together in one place. By making it easy to input data within predefined parameters and with appropriate levels of security/access, you instantly enhance its quality and accuracy, which fuels better decision making and growth. The insights you gain can drive improvements across the business, from eliminating day-to-day inefficiencies to identifying sales opportunities.

Challenge 2: Managing complex production schedules

As you take on more orders, managing production schedules gets trickier. You need to carefully balance materials, staffing and machinery, ensuring that none of these valuable resources are over- or under-utilised. The problem with spreadsheets is they’re time consuming to maintain and don’t give you the insights you need to align your resources in the most effective way possible – but when you move to an ERP, it doesn’t matter how big or complex the order is. With all information – from resourcing to customer orders – contained in one place, you can create an optimised production schedule in minutes, accommodating for changes such as last-minute orders.

Challenge 3: Managing cash flow

Running a business is expensive and as it grows, so do your costs. Inventory, wages and new equipment all require upfront investment, which means you can run into serious trouble if you don’t have enough cash to pay your overheads, staff and suppliers.

A growing business needs complete oversight of its finances to understand exactly how much cash is available and when payments are due – something you get with Ridder iQ. Also essential is the automated invoicing function, which helps to ensure that you get paid on time.

Challenge 4: Maintaining product quality

As a UK manufacturer, your customers value quality products but you may struggle to maintain this during periods of rapid growth. Problems arise when you don’t have good processes in place, including ones for quality control. The people you relied on to check quality can quickly become overstretched when orders increase, putting you at risk of wastage, defects and recalls. Quality control requires standardised workflows which can only be achieved using ERP software that gives you complete visibility of your operations and a clear audit trail.

Challenge 5: Over and under-stocking

As you transition from a small to mid-sized business, you can no longer rely on patchy historic data contained in spreadsheets or, worse, gut instinct to make critical inventory decisions. If you’re concerned about fulfilling more orders, it’s tempting to buy more safety stock – even if it later becomes SLOB stock and erodes your margins.

An ERP helps you get the balance right, so you avoid both over and understocking. Use Ridder iQ to get a real-time view of your inventory and automate purchasing recommendations based on the latest data such as customer orders.

Find out how Ridder iQ can help you prepare for growth.