It is getting much tougher to compete in the worldwide marketplace that we all dwell in. Whether you are building motorcycles or widgets, there is somebody out there trying to make them less expensively and faster than you. But the question is if they are building a better part? For some buyers, it doesn’t matter, cheaper is better even if the part doesn’t last as long. It is strange and unfortunate, but cheaper has become the catchphrase and the word of choice for many buyers and companies. Yes, less expensive is better, but cheaper doesn’t necessarily work out for the best. So the objective is to build a good, high value part and to make it of high value to your buyers. The makers of the items do not establish what they makes’ value; the customer does. What is the customer prepared to pay for your product and how much of a demand for your item is there? There are different ways to increase your profit for your goods.
You can always raise the price and pass it off to the buyer. But there is a better way, a more long term way that can increase revenue and keep your organization working lean and efficiently. It all starts with eliminating unnecessary waste in all parts of your business. Waste comes innumerous forms and it costs every business more cash than they would care to disclose. Waste is when employees 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 assembly department or it could mean that they are waiting for product from a vendor. These are method problems that can directly influence the end product and how many you can make. When workers are hanging around, unused and waiting for the work to come to their work station, they are not producing. They are idle and are in effect simply wasting money and time. It is the same when you have machines sitting idle. What is the point of having a fancy automatic machine if it is not being run for hours a day? Would it be more cost effective to do the job by hand, sell the robot and buy a piece of equipment that will be more industrious? What about the space that the equipment is filling, could another work spot be put there and more work actually be finished without the machine? You can’t say that you don’t want to get rid of tools because you may want it. If you are not using it or it is old, then it is taking up space and not contributing to the expansion and profit of the company. It can be tricky to admit that getting that machine was a bad idea, but if it doesn’t work and doesn’t help build the company, then it is time to push on and discover something that does. It is named adapting and going forward.