The manufacturing industry has been hit hard with labor shortages, making it imperative that companies find innovative ways to increase productivity with fewer people. Chuck Sharbrough, Senior Vice President and Director for Food, Beverage and Agribusiness at Key Equipment Finance recently wrote an article for Food Logistics that outlines how food manufacturers can conserve cash and remain competitive in this tight labor market.
Innovating with technology
In the article, Sharbrough highlights the things some companies are doing to combat the labor shortage including implementing automation, streamlining workflows and reconfiguring work spaces to reduce the number of people needed. Technology, such as artificial intelligence (AI) and enterprise resource planning (ERP) software systems will help alleviate supply chain issues. Companies are also turning to efficiency audits that access operational workflows and then recommend technology that will allow them to do more with fewer people,” Sharbrough wrote.
However, the drawback to these technology upgrades is they can be quite costly to implement, which is why Sharbrough suggests financing as an option for companies to automate their processes without a large cash outlay.
Financing can be customized
Sharbrough writes about the many types of financing solutions available with various structures and terms. Equipment leasing helps food manufacturers preserve cash or lines of credit for other investments, and also offers the ability to add or upgrade equipment during the term of the lease.
Another financing solution Sharbrough highlighted is asset finance. With asset finance, food manufacturers and processors can have a 100% financed solution that covers everything including the equipment and the soft costs associated with it.
There are also customized financing plans that can provide food manufacturers the ability to upgrade and automate while taking advantage of tax benefits. “Not all food manufacturers can utilize the full tax depreciation of their equipment assets. Leasing with a strong financing partner can unlock additional depreciable value in the form of lower payments.” Sharbrough wrote.
Selecting a finance partner
In addition to assessing the ROI and evaluating the details of each option, Sharbrough writes about the importance of selecting a finance partner. He says you can do this by asking the right questions. “Business owners should be bold in asking their potential financing provider the tough questions so they can truly evaluate and select the ideal team,” Sharbrough wrote.
Sharbrough has more than 30 years experience in the food manufacturing and equipment finance industry and is based in Newport Beach, California. Connect with him on LinkedIn or email him directly at firstname.lastname@example.org for more information.