It is getting more and tougher to compete in the global marketplace that we all live in. Whether you are making baseball bats or widgets, there is someone out there trying to build them cheaper and faster than you. But the question is if they are producing a better product? For some people, it doesn’t matter, cheaper is good enough even if the item doesn’t last as long. It is weird and regrettable, but cheaper has become the motto and the word of choice for many consumers and organizations. Yes, less expensive is better, but cheaper doesn’t necessarily work out for the best. So the objective is to make a good, high quality part and to make it of high value to your clients. The producers of the items do not determine what they makes’ worth; the buyer does. What is the consumer ready to pay for your product and how big of a demand for your part is there? There are different ways to boost your earnings for your product.
You can always increase the price and pass it off to the customer. But there is a better way, a more long term approach that can raise earnings and keep your business operating lean and efficiently. It all starts with removing unnecessary waste in all parts of your company. Waste comes innumerous forms and it costs every organization more money than they would care to admit. Waste is when workers are just standing around, but that does not mean that there aren’t orders to be made. It might just mean that they are waiting for parts to be finished in the painting department or it could mean that they are waiting for product from a vendor. These are process issues that can directly influence the end product and the speed at which you can make. When employees are hanging around, idle and waiting for the work to come to their station, they are not productive. They are unused and are in essence just wasting cash and time. It is the same when you have machines being quiet. What is the point of having a fancy automatic machine if it is not being used for hours a day? Would it be more efficient to do the job by hand, sell the robot and buy a piece of machinery that will be more productive? What about the room that the machine is filling, could another work area be put there and more labor actually be done without the equipment? You can’t say that you don’t want to get rid of tools because you may need it. If you are not using it or it is obsolete, then it is taking up valuable space and not contributing to the development and profit of thefirm. It can be tricky to admit that getting that equipment was a bad idea, but if it does not and doesn’t assit grow the company, then it is time to move forward and realize something that does. It is called adapting and pushing ahead.