Introductory Guide to Manufacturing Process Improvement

When your production line slows down, your profit margins do too. Whether it’s a delay in raw materials, inconsistent labor output or outdated systems, process inefficiencies drain your bottom line and limit your growth. According to the National Association of Manufacturers, manufacturing output in the U.S. contributes nearly 10% of GDP. Yet even the most productive operations lose an estimated 20 to 30% of their efficiency to avoidable process breakdowns.

That’s a significant chunk of potential profit.

The good news is that these gaps are fixable. Most mid-sized manufacturers already have the equipment, talent and tools to perform at a higher level. What’s often missing is a clear, actionable plan based on your business goals and built around measurable and achievable improvements.

This guide walks through what process improvement actually looks like for today’s manufacturers. You’ll learn how to find weak points in your workflow, how to turn numbers into insights and what changes can lead to real impact. Whether you’re aiming to increase output, control labor costs or scale up without sacrificing quality, starting with better processes is key.

Identifying bottlenecks: A data-driven approach to assessing your operations

Before you can improve anything, you need to measure it. That’s where many manufacturers run into trouble. You might know your plant isn’t operating as efficiently as it could, but it’s hard to pinpoint exactly why without accurate data.

Start by identifying key metrics that show how your operations are performing. These often include:

• Cycle time per unit
• Scrap and rework rates
• Overall equipment effectiveness (OEE)
• Labor utilization percentage
• On-time delivery rate

Tracking these numbers gives you a snapshot of performance. But more importantly, it lets you compare output across shifts, machines or locations. If your plant relies on manual logs or isolated spreadsheets, now’s the time to consider scalable solutions that improve consistency and reduce reporting lag.

For many operations, the right tool might be a basic cloud-based dashboard or a shop floor tablet that feeds data directly to your supervisors. But data alone is not enough. Pair your metrics with on-the-ground insights from your shift leads and operators. Ask what slows them down. Find out which tasks consistently cause delays or require manual fixes. These conversations often reveal issues that numbers alone can’t.

Once you’ve gathered both the operational data and the human insights, convert those inefficiencies into measurable costs. For example, if a key machine idles for 30 minutes every shift, factor in the labor cost, the missed production and the impact on delivery schedules. A small delay, multiplied over time, adds up quickly.

From chaos to consistency: Implementing Lean strategies that stick

Once you’ve identified where inefficiencies exist, the next step is building habits that prevent them from coming back. That’s where Lean manufacturing principles make the difference. At its core, Lean is about creating more value with fewer resources. That means focusing on what actually matters to your customer and cutting out everything that doesn’t.

For mid-sized manufacturers, the real challenge isn’t understanding Lean principles. It’s applying them consistently without disrupting the day to day. That’s why we recommend starting with small, measurable improvements before jumping into a full overhaul.

Look at areas where you can introduce standard work procedures. When every operator performs a task the same way, output becomes more predictable and easier to improve. This doesn’t mean stripping away flexibility. It means building a consistent foundation so that variability doesn’t cause chaos.

Visual management is another low-cost but high-impact tool. Floor charts, color-coded bins, labeled parts and digital dashboards all help employees make better decisions without needing constant oversight. When workers can see the status of a process at a glance, they’re more likely to stay ahead of problems.

Many manufacturers also benefit from implementing a system for continuous improvement, such as daily huddles, structured performance reviews or weekly audits. These short meetings are a chance for supervisors and operators to share feedback, flag recurring issues and celebrate wins that drive morale. More importantly, they help sustain momentum by embedding process improvement into the daily culture rather than letting it fade after the initial push.

To ensure these systems are effective, it’s helpful to establish clear roles, set measurable goals and regularly revisit performance metrics. Visual management tools (like scoreboards or dashboards) can reinforce accountability and promote transparency across teams.

At James Moore, we help manufacturers put these principles into action through detailed operational assessments and tailored improvement plans. Our Business Advisory team focuses on strategies that are realistic, sustainable and built for long-term gains.

The overlooked value of tax-aligned process changes

Process improvements don’t just affect productivity. They can also create meaningful tax advantages, especially when aligned with your larger strategy. If you’ve upgraded machinery, modified workflows or implemented new systems, there may be tax opportunities you’re overlooking.

One example is the research and development (R&D) tax credit, which applies to far more activities than many manufacturers realize. If your team is experimenting with ways to improve efficiency, test new materials or enhance production techniques, you may qualify. These credits reduce your income tax liability directly and in some cases can even be applied against payroll taxes.

Businesses can claim the R&D credit for activities that are technological in nature and aimed at improving performance, quality or reliability. This includes work performed by in-house engineers, technicians or even contractors, as long as the efforts are properly documented. (Our firm’s R&D Tax Credit Services team helps companies nationwide take advantage of this strategy.)

In addition, Section 179 deductions and bonus depreciation can help offset the cost of capital improvements. If your process improvement efforts involve purchasing new equipment, upgrading software or making structural changes to your facility, you may be able to deduct a significant portion of those costs in the current year rather than depreciating them slowly over time.

The key is timing and documentation. You need to plan these purchases strategically and keep detailed records that support your tax filings. That’s why we encourage our clients to include their CPA in process improvement discussions early, not just during tax season.

When operational upgrades and tax planning are coordinated, manufacturers can reduce their liabilities while investing in future growth. It’s a smart way to make every dollar work harder for your business.

Digital transformation in manufacturing: What’s worth the investment

Technology can either help you scale or drain your resources. The difference lies in how it’s selected and implemented. For mid-sized manufacturers, digital transformation should be practical, not flashy. It needs to support production goals, simplify decision-making and provide a clear return.

Start with your most time-consuming or error-prone processes. If you’re still using spreadsheets to track production schedules or inventory, an integrated ERP system could save hours each week and improve accuracy across departments. If your maintenance logs live on paper, digitizing them into a centralized platform can prevent costly equipment downtime.

That doesn’t mean you need to invest in a full system overhaul. Many manufacturers benefit by starting with one upgrade at a time. For example, a shop floor data capture system that connects to your machines can help track downtime, cycle times and overall equipment performance. When you can measure these things in real time, you can respond faster and plan better.

Another smart investment is in dashboards or business intelligence tools that visualize your performance data. The ability to see where output lags, where scrap increases or where labor is underutilized makes your daily production meetings more focused and productive.

Not every improvement requires complex automation. In fact, introducing barcoding or RFID technology is often simpler (and more affordable) than many manufacturers expect. These tools can quickly modernize how you track materials, manage inventory or log maintenance activities, offering substantial gains in accuracy, traceability and time savings with minimal disruption. Small steps like these lay the groundwork for broader digital transformation without overwhelming your team or your budget.

Digital investments should also improve communication. If your team relies on email or walkie-talkies to pass critical updates between departments, it’s easy for key information to fall through the cracks. A shared communication system, even a basic one, can improve coordination without adding complexity.

The James Moore Digital team works closely with manufacturers (and our Manufacturing Services team) to assess current systems, find the right tools and make sure the technology you choose supports both your operations and financial strategy. The right digital improvements can sharpen your competitive edge without overcomplicating your workflow.

Change management and workforce buy-in: Making improvements last

A new system or process only works if your people use it. That’s why even the most well-designed improvements can fall short without the support of the team doing the work. Change management is not just a box to check. It’s the link between strategy and results.

The first step is clarity. Employees need to understand why changes are being made, what’s expected of them and how their feedback matters.  Without clear communication, even beneficial improvements can feel disruptive or arbitrary. Too often, teams are asked to adopt new systems with little context, leading to frustration, resistance and avoidable slowdowns.

Start small. Introduce one change at a time and give teams the time and training they need to get comfortable. Pair that with regular check-ins, where supervisors ask what’s working, what’s not, and what could be done differently. When people feel heard and see their suggestions in put into action, they’re far more likely to embrace new tools or processes.

Recognition also goes a long way. If a shift team cuts changeover time by 10% or a lead operator finds a better way to stage parts, share the success. Celebrate progress just like you would celebrate hitting a sales milestone.

Frontline engagement is one of the biggest drivers of sustained productivity gains. That’s not surprising. The people closest to your process usually have the best insight into how it can be improved. The key is creating a culture where they feel empowered to speak up.

Finally, managers should lead by example. When supervisors take an active role in implementing new procedures by attending trainings, using new systems and consistently reinforcing expectations, teams are more likely to engage and respond positivity. The opposite is also true. If leadership appears disengaged, improvement efforts quickly lose steam.

Change doesn’t need to be disruptive. With a steady approach and clear communication, your team can adapt, improve and even drive the process forward themselves. The result is not just a more efficient plant, but a stronger and more committed workforce.

How to move forward with confidence

Manufacturing process improvement requires making smart, measurable changes that improve productivity, reduce waste and increase your bottom line. From Lean strategies and digital upgrades to tax-savvy investments and workforce engagement, each piece of the puzzle works together to strengthen your operations.

But knowing where to begin and how to prioritize can be overwhelming without the right support. Our professionals partner with manufacturers every day to develop custom strategies that lead to meaningful gains. We help you identify inefficiencies, calculate the financial impact and implement solutions that align with your growth goals.

Whether your priority is improving output, preparing for expansion or controlling rising costs, we’ll bring the tools, insight and experience to guide you through every step.

Let’s start a conversation about how your manufacturing business can work better, not harder. Contact a James Moore professional today and explore the ways our business advisory services can support your next phase of success.

All content provided in this article is for informational purposes only. Matters discussed in this article are subject to change. For up-to-date information on this subject please contact a James Moore professional. James Moore will not be held responsible for any claim, loss, damage or inconvenience caused as a result of any information within these pages or any information accessed through this site.