It is getting much more difficult to compete in the worldwide marketplace that we all exist in. Whether you are building motorcycles or widgets, there is somebody out there trying to produce them less expensively and faster than you. But the question is if they are making a superior part? 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 buyers and organizations. Yes, less expensive is better, but cheaper doesn’t necessarily work out for the best. So the goal is to build a good, high value part and to make it of high worth to your buyers. The makers of the parts do not decide what they makes’ worth; the customer does. What is the buyer prepared to pay for your service and how big of a demand for your part is there? There are different ways to boost your profit for your product.
You can always elevate the price and pass it off to the customer. But there is a better way, a longer term approach that can raise earnings and keep your organization working lean and efficiently. It all begins with removing unnecessary waste in all areas of your organization. Waste comes in many forms and it costs every company more revenue than they would care to disclose. Waste is when workers are just standing around, but that does not mean that there aren’t orders to be filled. It mightmerely mean that they are waiting for parts to be finished in the electrical department or it could mean that they are waiting for parts from a supplier. These are method problems that can directly have an effect on the end product and how many you can make. When employees are sitting around, unused and waiting for the work to come to their station, they are not useful. They are unused and are in effect just wasting cash and time. It is the same when you have machines standing quiet. What is the point of having a costly automatic machine if it is not in use for hours a day? Would it be more efficient to do the process by hand, sell the machine and purchase a piece of equipment that will be more productive? What about the room that the equipment is filling, could another work spot be put there and more jobs actually be done without the machine? 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 If you are not utilizing it or it is obsolete, then it is taking up space and not contributing to the growth and profit of thebusiness. It can be tricky to admit that getting that equipment was a bad idea, but if it doesn’t work and doesn’t assit grow the company, then it is time to push on and find something that does. It is named adapting and moving ahead.