It is getting more and harder to compete in the global marketplace that we all exist in. Whether you are making motorcycles or widgets, there is someone out there trying to build them less expensively and faster than you. But the question is if they are making a better item? For some people, it doesn’t matter, cheaper is better even if the item doesn’t last as long. It is strange and regrettable, but cheaper has become the catchphrase and the word of choice for many buyers and organizations. Yes, cheaper is better, but cheaper doesn’t necessarily work out for the best. So the object is to make a superior, high quality item and to make it of high value to your customers. The makers of the parts do not determine what they makes’ worth; the buyer does. What is the buyer ready to pay for your product and how big of a demand for your part is there? There are different ways to increase your profit for your product.
You can always increase the price and pass it off to the buyer. But there is a better way, a more long term way that can boost earnings and keep your company operating lean and efficiently. It all starts with eliminating unnecessary waste in all areas of your company. Waste comes innumerous forms and it costs every business more money than they would care to confess. Waste is when employees are just standing around, but that does not mean that there aren’t orders to be filled. It might just mean that they are waiting for parts to be completed in the painting department or it could mean that they are waiting for parts from a vendor. These are process concerns that can directly influence the end product and the quantity that you can produce. When employees are sitting around, inactive and waiting for the job to come to their work station, they are not producing. They are unused and are in essence simply wasting cash and time. It is the same when you have machines standing idle. What is the point of having a costly mechanized machine if it is not being run for hours a day? Would it be more efficient to do the job by hand, sell the robot and buy a piece of equipment that will be more productive? What about the space that the equipment is filling, could another work station be put there and more work actually be done without the equipment? You can’t say that you don’t want to do away with something because you may need it. If you are not using it or it is obsolete, then it is taking up room and not contributing to the growth and profit of theorganization. It can be tricky to admit that purchasing that equipment was a bad idea, but if it does not and doesn’t assit build the business, then it is time to push on and realize something that does. It is named adapting and going forward.