It is becoming more and tougher to compete in the global marketplace that we all live in. Whether you are building hair dryers or widgets, there is someone out there trying to make them less expensively and faster than you. But the question is if they are making a superior item? For some consumers, it doesn’t matter, cheaper is good enough even if the product doesn’t last as long. It is bizarre and unfortunate, but cheaper has become the catchphrase and the word of choice for many consumers and organizations. Yes, cheaper is better, but cheaper doesn’t always work out for the best. So the objective is to produce a superior, high quality part and to make it of high worth to your potential customers. The makers of the parts do not establish what they makes’ value; the consumer does. What is the customer ready to pay for your product and how big of a demand for your product is there? There are different ways to increase your profit for your product.
You can always elevate the price and pass it off to the buyer. But there is a better way, a longer term method that can increase profits and keep your business operating lean and efficient. It all begins with removing unnecessary waste in all aspects of your organization. Waste comes in many forms and it costs every organization more money than they would care to admit. Waste is when workers are just hanging around, but that does not mean that there aren’t orders to be built. It might just mean that they are waiting for parts to be completed in the assembly department or it might mean that they are waiting for parts from a vendor. These are method problems that can directly affect the end product and the speed at which you can make. When employees are hanging around, idle and waiting for the job to come to their area, they are not producing. They are idle and are in effect merely wasting cash and time. It is the same when you have machines standing quiet. What is the point of having a costly mechanized machine if it is not being run for hours a day? Would it be more cost effective to do the process by hand, sell the machine and purchase a piece of equipment that will be more industrious? What about the room that the machine is taking up, could another work station be put there and more labor actually be done without the equipment? You can’t say that you don’t want to do away with parts because you may need it. If you are not utilizing it or it is outdated, then it is taking up room and not contributing to the expansion and profit of theorganization. It can be tricky to admit that buying that equipment was a bad idea, but if it does not and doesn’t assit grow the business, then it is time to push forward and realize something that does. It is named adapting and going forward.