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 someone out there trying to build them cheaper and faster than you. But the question is if they are producing 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 slogan and the word of choice for many consumers and organizations. Yes, less expensive is better, but less expensive doesn’t necessarily work out for the best. So the object is to make a good, high value part and to make it of high value to your buyers. The makers of the parts do not establish what they makes’ worth; the customer does. What is the customer ready to pay for your item and how much of a demand for your part is there? There are different ways to raise your earnings for your product.
You can always raise the price and pass it off to the customer. But there is a better way, a more long term way that can boost earnings and keep your business operating lean and efficient. It all begins with eliminating unnecessary waste in all parts of your organization. Waste comes in many forms and it costs every organization more money than they would care to confess. Waste is when workers are just standing 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 painting department or it might mean that they are waiting for parts from a vendor. These are procedure problems that can directly influence the end product and how many you can make. When employees are loafing around, unused and waiting for the job to come to their station, they are not producing. They are under used and are in effect simply wasting cash and time. It is the same when you have machines sitting idle. What is the point of having a fancy automated machine if it is not being used for hours a day? Would it be more efficient to do the job by hand, sell the machine and buy a piece of machinery that will be more fruitful? What about the space that the equipment is taking up, could another work station be put there and more labor actually be done without the machine? You can’t say that you don’t want to get rid of 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 If you are not utilizing it or it is obsolete, then it is taking up space and not contributing to the development and profit of the company. It can be hard to admit that purchasing that equipment was a bad idea, but if it does not and doesn’t help grow the business, then it is time to push forward and discover something that does. It is called adapting and going forward.