It is getting much more difficult to compete in the global marketplace that we all live in. Whether you are making 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 product? For some buyers, 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 motto and the word of choice for many people and organizations. Yes, less expensive is better, but cheaper doesn’t necessarily work out for the best. So the object is to build a superior, high value item and to make it of high worth to your customers. The producers of the parts do not decide what they makes’ worth; the consumer does. What is the customer prepared to pay for your service and how big of a demand for your part is there? There are different ways to increase your earnings 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 approach that can increase profits and keep your company operating lean and efficiently. It all begins with removing unnecessary waste in all aspects of your business. Waste comes innumerous forms and it costs every company more revenue 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 made. It mightsimply 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 procedure problems that can directly influence the end product and the quantity that you can make. When employees are loafing around, unused and waiting for the job to come to their work station, they are not productive. They are unused and are in effect simply wasting money and time. It is the same when you have machines being idle. What is the point of having a costly 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 machinery that will be more industrious? What about the area that the equipment is filling, could another work station be put there and more work actually be done without the machine? You can’t say that you don’t want to do away with tools because you might need it. If you are not utilizing it or it is old, then it is taking up valuable space and not contributing to the growth and profit of the company. It can be uncomfortable to admit that buying that machine was a bad idea, but if it does not and doesn’t assit grow the company, then it is time to push on and realize something that does. It is called adapting and going forward.