Today’s competitive manufacturing environment demands that you run your job shop like a business. Focusing on tactical, machine-centric thinking is no longer adequate to move your job shop forward. Operational strategies with a “big picture” approach are necessary to accomplish your goals.
This mindshift is often easier said than done, and even with the best intentions, job shop owners and personnel fall into old patterns that create issues, hinder success, and impact profitability. Awareness is key. Here are a few common missteps and suggestions on how to resolve them in your job shop:
Assuming You Know Real Costs
Seasoned job shops often enjoy repeat business and repeat jobs—familiarity that can lull you into thinking you can “guesstimate” costs with relative accuracy. While it may be true in some instances, it’s not a reliable way to operate a business. Neither is glancing at monthly income statements and taking the numbers at face value. Get granular on each job. Calculate the true cost per hour, per department, and follow it through all areas of your operation. Be particularly cognizant of less visible costs, like overhead [Link to Job Shop Blog] and inventory [Link to Job Shop Blog], to capture a true understanding of costs. It’s critical that you routinely run cost analyses so you can stay on top of needed adjustments and ensure each job is running at peak efficiency.
Using Incompatible Systems
Shop floor and information management systems aren’t usually a priority, with most job shops citing expense, implementation complexities, and need as reasons. The reality is that an integrated system, like an Enterprise Resource Management (ERP) system, is an affordable way to integrate what’s happening on the floor with inventory, finance, and more. Tracking each transaction from quote to payment is a matter of efficiency, with the added benefit of creating a history of real-time data that can inform future operational decisions. Disjointed systems are only as good as their maximum capacity. They lack the scalability of an integrated system and, therefore, limit your job shop’s growth potential.
Taking Customer Relationships for Granted
Every business owner acknowledges the importance of customers, but once those relationships are established complacency can set it. Look for ways to remain a value-added partner, including reaching out to assess the quality of the relationships and address any pain points that your customers may have but aren’t necessarily voicing. Proactivity is appreciated, and can net you more business from preferred sources.
Ignoring Company Culture
Your employees are your greatest asset, especially in a manufacturing environment where skilled labor is increasingly difficult to find and keep. Like customers, employees need to feel valued, and actions speak louder than words in the workplace. Go beyond the paycheck. Show you are invested in their development through offering apprenticeship programs or continuing education classes at a local technical college. Encourage mentorships among seasoned workers and new hires. Don’t underestimate the importance of feedback. Schedule and fully participate in employee reviews so you can gather and share information firsthand about their experience with your job shop and vice versa. Employees who feel like they are part of something bigger tend to work harder and remain loyal.
Understanding the realities of your business is a combination of awareness, technologies, and people. Implementing an ERP system like NetSuite in your job shop can help you address any issues that undermine your success. Reach out to one of our manufacturing experts today to get started.