It is getting much harder to compete in the worldwide marketplace that we all exist in. Whether you are building motorcycles or widgets, there is someone out there trying to build them less expensively and quicker than you. But the question is if they are making a superior part? For some people, it doesn’t matter, cheaper is better even if the product 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, cheaper is better, but less expensive doesn’t necessarily work out for the best. So the objective is to produce a superior, high quality item and to make it of high value to your customers. The producers of the product do not establish what they makes’ worth; the buyer does. What is the customer willing to pay for your item and how much of a demand for your product is there? There are different ways to increase your revenue for your product.
You can always increase the price and pass it off to the buyer. But there is a better way, a longer term approach that can increase earnings and keep your organization operating lean and efficient. It all begins with eliminating unnecessary waste in all areas of your company. Waste comes in many forms and it costs every business more revenue than they would care to confess. Waste is when employees are just hanging around, but that doesn’t mean that there aren’t orders to be built. It might just 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 supplier. These are method issues that can directly affect the end product and how many you can make. When employees are hanging around, idle and waiting for the work to come to their station, they are not producing. They are unused and are in effect simply wasting money and time. It is the same when you have machines standing quiet. What is the point of having a fancy automated machine if it is not being used for hours a day? Would it be more cost effective to do the process by hand, sell the robot and purchase a piece of machinery that will be more productive? What about the area that the equipment is taking up, could another work spot be put there and more labor actually be done without the equipment? You can’t say that you don’t want to get rid of equipment because you may need it. If you are not utilizing it or it is obsolete, then it is taking up valuable space and not contributing to the development and profit of thefirm. It can be tricky to admit that getting that machine was a bad idea, but if it doesn’t work and doesn’t assit build the business, then it is time to push forward and find something that does. It is called adapting and going forward.