It is becoming more and harder to compete in the global marketplace that we all live in. Whether you are making hair dryers or widgets, there is somebody out there trying to make them less expensively and quicker than you. But the question is if they are making a better product? For some people, it doesn’t matter, cheaper is better even if the part doesn’t last as long. It is bizarre and unfortunate, but cheaper has become the catchphrase and the word of choice for many people and companies. Yes, cheaper is better, but cheaper doesn’t always work out for the best. So the objective is to produce a good, high quality part and to make it of high value to your customers. The makers of the parts do not decide what they makes’ value; the buyer does. What is the consumer prepared to pay for your service and how big of a demand for your item is there? There are different ways to raise your revenue for your goods.
You can always increase the price and pass it off to the buyer. But there is a better way, a more long term method that can raise profits and keep your business operating lean and efficient. It all starts with removing unnecessary waste in all parts of your organization. Waste comes innumerous forms and it costs every company more revenue than they would care to admit. Waste is when employees are just standing around, but that doesn’t mean that there aren’t orders to be filled. It might just mean that they are waiting for parts to be completed in the assembly department or it might mean that they are waiting for parts from a supplier. These are process problems that can directly influence the end product and how many you can make. When workers are sitting around, idle and waiting for the work to come to their area, they are not productive. They are idle and are in essence just wasting cash and time. It is the same when you have machines being unused. 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 job by hand, sell the machine and purchase a piece of equipment that will be more fruitful? What about the room that the machine is taking up, could another work spot be put there and more work actually be completed without the machine? You can’t say that you don’t want to get rid of something because you may need it. If you are not making use of it or it is obsolete, then it is taking up space and not contributing to the growth and profit of the company.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 uncomfortable to admit that buying that machine was a bad idea, but if it does not and doesn’t help grow the company, then it is time to move forward and discover something that does. It is named adapting and moving ahead.