It is getting much more difficult to compete in the worldwide marketplace that we all dwell in. Whether you are making baseball bats or widgets, there is somebody out there trying to produce them less expensively and faster than you. But the question is if they are making a better item? For some buyers, it doesn’t matter, cheaper is better even if the item 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 make a good, high quality part and to make it of high value to your buyers. The producers of the product do not establish what they makes’ worth; the buyer does. What is the buyer willing to pay for your part and how much of a demand for your product is there? There are different ways to raise your earnings for your product.
You can always increase the price and pass it off to the customer. But there is a better way, a longer term method that can boost earnings and keep your company operating lean and efficiently. It all starts with removing unnecessary waste in all areas of your organization. Waste comes in many forms and it costs every organization more revenue than they would care to admit. Waste is when workers are just standing around, but that does not mean that there aren’t orders to be filled. It mightsimply mean that they are waiting for parts to be finished in the painting department or it could mean that they are waiting for parts from a supplier. These are method concerns that can directly influence the end product and how many you can produce. When workers are loafing around, inactive and waiting for the work to come to their station, they are not productive. They are unused and are in essence just wasting cash and time. It is the same when you have machines sitting quiet. What is the point of having a costly 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 machine and buy a piece of equipment that will be more industrious? What about the room 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 If you are not utilizing it or it is obsolete, then it is taking up space and not contributing to the growth and profit of the company. It can be tricky to admit that buying that equipment was a bad idea, but if it does not and doesn’t help grow the company, then it is time to move forward and find something that does. It is called adapting and pushing ahead.