It is becoming much harder to compete in the worldwide marketplace that we all exist in. Whether you are producing motorcycles or widgets, there is somebody out there trying to produce them cheaper and quicker than you. But the question is if they are making a better part? For some people, it doesn’t matter, cheaper is better even if the part doesn’t last as long. It is strange and regrettable, but cheaper has become the motto and the word of choice for many buyers and companies. Yes, less expensive is better, but cheaper doesn’t always work out for the best. So the goal is to produce a good, high quality part and to make it of high value to your clients. The makers of the parts do not establish what they makes’ value; the consumer does. What is the consumer ready to pay for your item and how much of a demand for your part is there? There are different ways to boost your profit for your product.
You can always raise the price and pass it off to the customer. But there is a better way, a longer term way that can boost earnings and keep your company running lean and efficiently. It all starts with removing unnecessary waste in all aspects of your organization. Waste comes innumerous forms and it costs every company more money than they would care to disclose. Waste is when employees are just hanging 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 completed in the painting department or it might mean that they are waiting for parts from a vendor. These are method issues that can directly have an effect on the end product and the quantity that you can produce. When employees are sitting around, idle and waiting for the job to come to their station, they are not productive. 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 expensive automatic machine if it is not being used for hours a day? Would it be more cost effective to do the job by hand, sell the machine and buy a piece of equipment that will be more fruitful? What about the space that the machine is taking up, could another work spot be put there and more labor actually be done without the robot? You can’t say that you don’t want to do away with something because you might want it. If you are not utilizing it or it is old, then it is taking up space and not contributing to the growth and profit of theorganization. It can be hard to admit that getting that machine was a bad idea, but if it does not and doesn’t assit build the business, then it is time to move forward and realize something that does. It is called adapting and pushing forward.