It is getting much harder to compete in the global marketplace that we all dwell in. Whether you are producing hair dryers or widgets, there is somebody out there trying to build them less expensively and quicker than you. But the question is if they are producing a better part? For some buyers, it doesn’t matter, cheaper is better even if the product doesn’t last as long. It is weird and unfortunate, but cheaper has become the slogan and the word of choice for many people and organizations. Yes, cheaper is better, but less expensive doesn’t always work out for the best. So the objective is to produce a first-rate, high value product and to make it of high worth to your customers. The producers of the parts do not establish what they makes’ value; the buyer does. What is the customer willing to pay for your service and how big of a demand for your part is there? There are different ways to raise your revenue for your product.
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 raise revenue and keep your organization working 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 cash than they would care to admit. Waste is when employees are just hanging around, but that does not mean that there aren’t orders to be made. It mightmerely mean that they are waiting for parts to be completed in the electrical department or it might mean that they are waiting for product from a supplier. These are procedure problems that can directly affect the end product and the speed at which you can produce. When workers are sitting around, inactive and waiting for the work to come to their work station, they are not productive. They are idle and are in effect simply wasting cash and time. It is the same when you have machines standing quiet. 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 purchase a piece of equipment that will be more industrious? 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 tools because you might want 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 If you are not utilizing it or it is obsolete, then it is taking up valuable space and not contributing to the development and profit of thebusiness. It can be hard to admit that getting that equipment was a bad idea, but if it does not and doesn’t help grow the business, then it is time to move on and discover something that does. It is called adapting and going forward.