Page 1

5

STEPS TO YOUR

DREAM

SHOP


INTRODUCTION

America’s manufacturing landscape has changed drastically, with major shifts occurring even within the last five or ten years. As a small- to mid-sized job shop owner, you’ve probably noticed some of these changes. It seems more and more work moves overseas, and the United States manufacturing industry continues to decline. The Great Recession of 2009 did not help matters any, and though the country appears to be out of the worst of it, economic uncertainty continues to loom over businesses nationwide. Growing a business in such a climate can be incredibly challenging, but there are some things to be hopeful about. The U.S. remains the world’s largest manufacturing economy, as businesses like yours help produce over 18 percent of products manufactured worldwide. U.S. manufacturers also continue to lead the world in productivity, remaining far more productive and efficient than any other manufacturing sector in the world. The U.S. manufacturing sector also continues to innovate and lead—even in the face of an uncertain future.

As a job shop owner, you face a variety of challenges. The country’s

manufacturing sector may be recovering, but only in fits and starts… and certainly not in a way you can depend on. You also face more competition than ever, both at home and abroad. This competition continues to improve, and you cannot afford to rest if you hope to stay competitive. Technology is also growing and changing at a rate not seen before in human history. If you fail to stay on top of it, you can easily be swept aside. All of these challenges point towards a reality that every job shop owner must eventually face if he hopes to succeed—you cannot settle for being a simple parts manufacturer. Even if you are the best at what you do, the competition will not stop at just producing quality parts. To excel as a job shop owner, you have to become a savvy businessman as well. You may own a business in the largest manufacturing economy in the world, but you will only succeed if you stay at the forefront of the industry. Chances are, you did not just build your business for yourself. You want to create something that will last, for your children and your grandchildren. The good news is, what you want is possible. Others have done it, and so can you. You can build a job shop that will become your legacy. It may not be easy, but reading this guide and acting on its advice will provide you with the necessary foundation to build the job shop of your dreams. What follows are five tried and true fundamentals to growing any job shop. You’ll learn: • How to understand your current business and its core competencies • The value of business agility, or how to remain mobile, so you can

5

STEPS TO YOUR

DREAM

SHOP

take advantage of opportunities and respond to challenges • How to focus on relationships, both with customers and suppliers • How to improve your efficiency to keep things humming along • The key to networking—something that no business person can avoid if they want to thrive


1

Understand your current business state and (re)evaluate its core competencies

Job shops are the quintessential American success story. A machinist or fabricator works his way up in a business, becomes an expert in his trade, and then decides he can do even better on his own. Perhaps you wanted to produce higher quality work than you could for your employer, or maybe you knew you could make more money working for yourself. Or maybe you just wanted to focus on a special area of manufacturing. Whatever your reasons, you set out to make the American dream a reality. Most job shops are started by men who already have regular nine to five jobs. They buy a machine, and then begin doing work after hours and on weekends. They keep their eye on the prize, improve their abilities, and begin taking on their own jobs. The first real job on your own probably felt incredible, even if you were a little worried whether you could pull it off. As jobs kept coming in, you realized that you could in fact do this. Of course, more jobs create more responsibility, and then things become more complicated. Running a business is not the same as running a machine, and it can be extremely challenging to make the leap from operator to businessman. Perhaps you did really well before the economic downturn hit. Many job shop owners did, although it is easy to do well when work is plentiful and you do a good job. But when the downturn hit, many job shop owners were forced to stop and re-evaluate what they were doing. Learning how to thrive in a weak economy is not easy for any business owner, and job shop owners are no exception. Re-evaluation is a good idea, for several reasons. If what you are doing is not working, it makes no sense to keep doing it. In business, as in life, it is often necessary to step back and get a clear look at what you are doing and the results you are getting from your actions. Understanding your business and its core competencies allows you to plan effectively and know where to focus your energy. Ask yourself the following question, and ask it of all those involved in your business:

5

STEPS TO YOUR

DREAM

SHOP

What do you, personally, understand is your shop’s core competency and differentiators?


As the shop owner, you need to get very clear about your thought patterns and the things you take for granted. Take the time to write this stuff down; it will help

you clarify. What is your shop good at? What do you really excel at? What are your differentiators— the things that really make you stand out from all the other businesses around you?

Depending on your situation, this may seem a little challenging at first. But the fact is, your business is an extension of you, and you cannot help but be different from everyone around you. That is just how things work. Your shop is different, and you need to clarify why this is true.

Ask your key internal stakeholders (employees) what they understand your core competency to be. Your employees know your job shop better than anyone save yourself, and they are bound to have valuable insights that you can take advantage of. Find out what it is they feel the business excels at, and what makes it stand out from other job shops. Ask your external stakeholders (customers) what they understand your company’s core competency to be. Asking this question of your customers is a great way to get an outside perspective on your business. Like your employees, your customers may know more than you imagine. And even if you do not agree with their assessments, their answers will give you a good idea of how your business is perceived by those you do business with. Now that you know what your business is really about, you can begin working to improve on it or change it in a way that you desire. Even if you discover things you do not like through your assessment, you are still better off than you would have been had you remained in the dark.

2 5

STEPS TO YOUR

DREAM

SHOP

Maintain your business agility

One of the greatest assets of a small to mid-sized business is its agility. Large companies simply do not have the option of remaining as quick and agile as their smaller competitors. This is a good thing. It keeps the playing field more level than it would be otherwise. As a small business, you and your job shop should strive to take advantage of your strengths, one of which is agility. Take advantage of it, and do all you can to maintain it. Agility is an interesting term, one that encompasses a variety of other attributes, including coordination, flexibility, adaptability and balance. It is easy to see how such a trait would be useful in the business world. You can probably also see how you use your business’ agility regularly to maintain a competitive edge. In fact, jobs shops are built around the idea of agility—of constantly adapting to new customer orders and demands under tight deadlines with maximum efficiency. Your job shop must excel at adapting to constantly changing customer needs and a rapidly shifting business environment.


Unfortunately, you’re bound to lose some of your agility over time. As your business grows, it will invariably lose some of its flexibility and adaptability. As the business owner, it is your job to minimize this loss. You cannot prevent it completely, but you can certainly work relentlessly to maintain what agility you can in any given situation. Also, by regularly focusing on your own business agility, you will be more capable of seeing the lack of it in your competitor and taking advantage of this weakness. When you are considering your company’s agility, remember that agility, as a strategic indicator, is a combination of three things: • Foresight - The ability to read the lay of the land. Keeping in mind what has occurred in the past, what do you see as the future of each situation pertaining to your business? No one can tell the future, but it is possible to learn how to make educated guesses about what will likely occur. • Ability/Speed to react

to changes in market conditions - Are you prepared

to react, and react quickly, as the market shifts? This speed of reaction is a trait often attributed to small businesses. They are less entrenched and invested in any one particular way of being, and can shift more quickly when things change. And things always change. Work to maintain this ability in your company as much as possible.

• Constant Innovation - As science comes to understand more about human innovation, it has become clear that much of innovation comes from the combining of two seemingly unrelated ideas. Smaller companies have usually spent less time doing things the “right” way, which gives them the opportunity to see things in a new light. Your job shop should be known for its culture of innovation, meaning you do everything you can to keep the new ideas coming. Yes, most of them will be worthless. This is the nature of innovation. But every once in a while, you will stumble upon a gem, which can set you far apart from the competition.

5

STEPS TO YOUR

DREAM

SHOP

As bad as times have gotten for U.S. manufacturing, they have still remained relatively good for a lot of industries. These good times have a tendency to make businesses “fat,” and they lose their agility as a result. No matter how good things get for your business, do everything you can to avoid getting fat. Agility will set you apart from the competition every time, and will make it possible for your business to thrive.


3

Focus on (re)building long-lasting customer and supplier relationships Doing business, you’ve probably learned that it rarely pays to be unpleasant to those you are doing business with. Relationships, with both your customers and your suppliers, are the heart of any good manufacturing business. Most job shop owners know that it is important to maintain good relationships for the sake of their business. What you may not know, however, is that not all customers and suppliers are created equal.

Though you may have grown up hearing that the customer is always right, in reality, this is not always the case. You may have seen the signs of this while conducting your business. This is the customer that always has some complaint about your work— the same work that countless other customers have commended you for. The supplier who is never on time, or who charges you more than you think you should have to pay because you seem to have no other option. They come in all shapes and sizes, but bad customers and suppliers are bad for a reason, and if you have the option to part ways with them, you should. You may not have such an option. The pay may be too good, or they may have something you simply cannot get from any other source. Most of the time, however, if you look hard enough you can find another customer or another supplier. Some customers and suppliers are good for your business, and some are not. Understanding which is which will help you focus on what is truly good for your business, and help you know where you need to cut ties with individuals and organizations that are only causing you grief.

5

STEPS TO YOUR

DREAM

SHOP

There are three basic types of customers and suppliers you will come across as a manufacturer—no matter how small or large your business is: • Most valuable - These are the customers and suppliers that are most valuable to your business right now, today. These individuals or companies are the ones you must do whatever you can to keep around. Take the time to devise maintenance strategies for all of them, because they keep your business running. Do what you can to make them happy, and to keep them happy for the foreseeable future. They are your foundation. • Most growable - These are most valuable to you in the future. It is impossible to say what will happen with any relationship, but chances are that some of your current most valuable customers and suppliers will not stay that way. Having the foresight to see what individuals and companies will be important to your business in the future will allow you to create nurturing strategies. Foster these relationships and do what you can to make them grow. The more solid relationships you create, the bigger your business will become.


• Shouldn’t be doing business with - These are the customers and suppliers that are the least profitable, most demanding and cause the most disruption to your daily activities. When you examine all your business relationships, you will see that some individuals and organizations take more than they give, and do so consistently. These are the ones you will need to devise exit strategies for. Often, it is not necessary to burn bridges. If you think it through, you can probably devise a strategy that will allow you to part ways amicably, without tarnishing either of your reputations. Whether it goes well or not, though, a parting of the ways must occur. Otherwise you are trying to swim with weights tied around your ankles. Take the time periodically to categorize all your customer and supplier relationships this way. It will help you know how to act towards each relationship, and will benefit your business greatly in the long run. It will also contribute to your sanity.

4

Improve efficiencies from the front office to the shop floor

Improving efficiency is a job that is never complete for any business. To have your business perform exceptionally, you must go over every inch of it with a fine tooth comb. This means from the sidewalk leading up to your front door all the way to the driveway leaving shipping and receiving. Every business can become more efficient, and the work is never done because things are always changing. Accepting this fact—and working with it—will ensure your business runs as efficiently as possible. Technology and tools for automation improve constantly, and you must remain aware of these changes to stay competitive. It is important to remember, however, that just because something is new does not make it better. Buying the latest machine tool or adopting the latest software automation fad will not automatically lead to improved efficiency. To keep your business competitive, you must adopt the right technology and the right automation software at the right time. The highest efficiency is achieved by striking a balance between what is new and what has been proven to work.

5

STEPS TO YOUR

DREAM

SHOP

The right job shop management software can be invaluable in improving the efficiency of your business. By integrating information across your entire organization, good job shop management software can do wonderful things for improving the efficiency of your business, for a variety of reasons.


Job shop management software solutions enable and support: • Faster response to customer RFQs - When a customer requests a quote, you don’t have any time to waste. The right software will allow you to consider all applicable factors in the potential job, and will allow you to quickly generate an accurate quote. This speedy turnaround and accuracy will ensure that no competitor beats you to a quote, and will make you stand out to customers. • Faster release of work to the shop floor at time of customer order or based on customer delivery requirements - A good job shop software solution will allow you to get your orders out on the floor quickly and efficiently. Getting orders out on the floor means they will be finished faster, improving your turnaround times and customer satisfaction. When the customer does not want the order immediately, software will help ensure that the order is delivered to the floor exactly when it should be, not later or sooner. The order will be completed on time, exactly as you want it to be. • Real time information on production issues - As the shop owner, you need to know what is going on all the time, and as accurately as possible. Good shop management software uses real time data collection and manufacturing scheduling information to give you an up-to-date view of: > Bottlenecks or overloaded work centers > Orders running late > Orders projected to miss delivery dates > Orders projected to run over cost This information will help you address problems when they are occurring, and may even allow you to prevent problems before they happen. • Improved material requirements planning and improved supplier management - Carrying excess inventory costs money, and is not necessary with the right manufacturing software. A good ERP software solution will prevent you from making unnecessary cash outlays for materials you may not even need, freeing up cash flow for other, more important purposes. Job shop software solutions can also help with managing your suppliers, allowing you to only request from them what you actually need. • Integration of shipping and invoicing functions - Using a job shop management software solution, you can ensure that invoices go out as soon as possible after a job is complete. This will significantly reduce invoicing errors as well as improve the cash flow of your shop. • Quality initiatives (ISO, AS9100, etc.) - Customers demand stringent adherence to quality initiatives, no matter how often these initiatives change. Shop management software can help guarantee that your shop keeps up to date with whatever changes occur. This means that you, and everyone in your shop, will remain in the know, which will ultimately have an impact on your bottom line.

5

STEPS TO YOUR

DREAM

SHOP


Integration of important quality information and real-time access to that information on the shop floor is the only way you can ensure that parts are made right every time. This will reduce your cost and improve your profitability. Not all shop management software solutions are equal, so it is important that you do your research before choosing one. The fact remains, though, that there is no substitute for shop management software in your job shop. Using such software provides far too many efficiency improvements to ignore. jobboss.exactamerica.com/leankit1

5

Collaborate and network with your business peers The field of business is constantly shifting, and it takes vigilance to stay informed and aware of what is going on in your industry. This is what makes a good network so invaluable—it provides a way to learn about changes in manufacturing and the market. People also like to do business with people they know, and becoming part of a network will make you one of those people.

There are several ways you can network in the manufacturing world. The more avenues you take advantage of, the better off your business will be. Ways to network and collaborate: • Membership in local, regional and national manufacturers associations - Membership in an association gives multiple benefits. Not only do you get to form relationships with those you might later do business with, you also get to learn more about your industry. Some very successful people are members of these organizations, and often like to give back by mentoring up-and-coming business owners. The insight provided by someone who has been there can be incredibly useful in helping you avoid mistakes and see opportunities. Associations often offer classes and seminars as well, which will help you better understand your business.

5

STEPS TO YOUR

DREAM

SHOP

• Membership in local chambers of commerce - Getting to know your business neighbors is important. Often it is easy to form relationships with those we see every day, and the local chamber of commerce will expose you to a variety of business owners in your area. These people will know what is happening in your area of the world, and can help you find solutions and opportunities you may otherwise miss.


• Informal networking with other shop owners in your area - While it may seem like other shop owners are your competition, they don’t have to be. They know what you are going through, and can provide support when you are facing difficulties. They can also provide referrals if they see that you do good work. There are a lot of benefits to networking, some of which include: • Sharpening your business skills and acumen - You can learn a lot from others. Even if you are a great shop owner, rubbing shoulders with other business people can give you new ideas and expose you to resources you may not have otherwise discovered. • Providing insight into the latest manufacturing and market trends -Part of maintaining your business agility is the ability to see what is coming. A good network will keep you abreast of what is happening in your area of business, allowing you to make informed decisions.

RELATIONSHIPS

CORE

COMPETENCIES UNDERSTAND YOUR BUSINESS

LONG-LASTING CUSTOMER & SUPPLIER

COLLABORATE & NETWORK

BUSINESS AGILITY

UNDERSTAND

IMPROVE EFFICIENCIES

UNDERSTAND YOUR BUSINESS

& NETWORK LONG-LASTING CUSTOMER & SUPPLIER

RELATIONSHIPS

COMPETENCIES

CORE

COMPETENCIES

CORE

UNDERSTAND YOUR BUSINESS

UNDERSTAND

BUSINESS AGILITY IMPROVE EFFICIENCIES RELATIONSHIPS

UNDERSTAND

1

IMPROVE EFFICIENCIES

You want to build the kind of business that will be around long after you are gone. By following the 5 steps outlined in this guide, you will create a solid foundation for achieving what you desire. The five steps, again, are as follows:

BUSINESS AGILITY

Conclusion

IMPROVE EFFICIENCIES

LONG-LASTING CUSTOMER & SUPPLIER

COLLABORATE & NETWORK

• Supporting a “best practice” approach to running your shop - By taking the best advice from many different sources, you can have your shop running like a well-oiled machine. This will improve your profitability and efficiency. UNDERSTAND YOUR BUSINESS

BUSINESS AGILITY Understand your current CORE COLLABORATE business state and CORE & NETWORK (re)evaluate its core competencies - You must look objectively at your business to understand what UNDERSTAND

COMPETENCIES

UNDERSTAND

COMPETENCIES

works and what doesn’t. By seeking insight from sources both inside and outside your shop, you can get an accurate idea of where you are.

5

STEPS TO YOUR

DREAM

SHOP

2

Maintain your business agility - Being a small business has its advantages.

Agility allows you to adapt quickly, and is something you want to maintain at whatever cost. It will set you apart from the competition, and will give you an advantage against larger shops.


3

Focus on (re)building long-lasting customer and supplier relationships - There are good customers and suppliers, and there are bad ones.

4

Improve efficiencies from the front office to the shop floor There is always room for improved efficiency in a business. Be judicious in your adoption of new technology and automation tools, as newer does not always mean better. However, finding the right solution(s) such as a good job management software is invaluable, and should be adopted by your shop to maximize efficiency.

5

Collaborate and network with your business peers - A good

Learn to tell the difference, and to part as smoothly as possible with individuals and organizations that drag your business down.

network will give you and your business the resources and support you need to excel. Networking is a must if you want to grow your business to its maximum potential.

Now it is time for you to take what you have learned in this guide and put it into action. Consider each of these 5 fundamentals, and apply them to your business. First steps are often the hardest, but they are the only way to get where you want to go.

For each of these five fundamentals, create an action step for yourself. Evaluate your business, improve your agility, focus on building the right relationships, improve efficiency by adopting a good job shop software solution and start networking. Then you will be well on your way to building the job shop of your dreams.

5

STEPS TO YOUR

DREAM

SHOP


ACTION ITEMS:

BGDSHP021913

5 pasos para conseguir la fábrica de tus sueños  

Una guía que contiene cinco pasos ciertos y probados para construir la fábrica con la que estás soñando

Advertisement