There are a number of reasons why a business may not be operating at 100 per cent capacity utilisation: lower demand, inefficacy and an increase in capacity that does not match an increase in demand, to name a few. Some of these potential issues are ultimately out of the control of the business, yet their effects can be mitigated with careful planning at the right kind of smart business intelligence software.
It is important for any sized business, if they are serious about growth, to look into the various ways they can expand their production and efficiency.
Why increase capacity?
It is important for any sized business, if they are serious about growth, to look into the various ways they can expand their production and efficiency.
In the Australia Chamber of Commerce and Industry Small Business Survey for the December Quarter of 2015, stats showed that Australian businesses overall were expanding on their acquisition of structures and equipment, thus expanding on their capacity. This is a positive sign as we all know a business must expand capacity to grow, and reflects a confident market place.
By increasing and expanding on vital components growth, such as production or manufacturing software, a business is showing innovation and postive risk taking – both signs of future growth.
Therefore, increasing the maximum possible output for any small business is essential to survival in today’s tough economy, and will usually require the purchasing and implementation of new technologies and software.
But in some specific industries, such as manufacturing, capacity growth has begun to stall. As Professor Roy Green from UTS Business School reported in his May 5, 2015 feature in The Conversation, there are more than 80,000 manufacturing businesses in Australia – and most are small to medium business with under 100 employees.
These companies have experienced a fall of $5.6 billion in manufacturing investment between 2005/06 and 2013/14. The latest statistics for the September quarter 2015 from the Australian Department of Industry, Innovation, and Science show this trend is continuing, with a documented decline in manufacturing gross domestic product from 6.4 per cent to 6.3 per cent.
The information at hand suggests the issue is a complex one, made up of global economic circumstances and at-home attitudes to capacity and expansion. The manufacturing industry, if it wishes to stay competitive in a global market, must implement new technology, and fast.
Business intelligence software is a sound investment
A small manufacturing firm would benefit from the introduction of Advanced Business Management software to improve efficiency, leaving room for expansion in other areas of the business. Designed to be the next generation of accounting software, it is a foundational business-wide IT solution, geared towards the future of small business management.
