Profit margins in manufacturing sometimes feel like they are frozen in place or, worse, facing a continuous squeeze that can minimize and even erase profits. According to Sageworks, a financial information company, many manufacturers were working for free last year, with flat or negative margins.
There are many reasons for this margin squeeze: on the fiscal side, identifying new efficiencies in this complex operation has been a time-consuming and difficult process. Efficiencies often required months of research to identify, followed by the testing and re-testing of innovative ideas before they can be implemented. In many cases, because of all the effort involved, companies miss the opportunity to implement changes ahead of their competition.
Author: Amir Orad