Machine Shop Tips Throw Some Labour at It!
Once in a while I come across a situation where manufacturing companies are doing things that don’t make sense in today’s competitive environment. These companies usually do well for themselves and are quite busy. But they all get to a point where they need to hire more people, or invest in equipment that is more productive.
Either decision would increase the output.
This is where, in terms of the difference between a company that has a short-term outlook and a company that has a long-term outlook, ‘rubber hits the road.’
A company with short-term plans will hire more people and need to train them; however, having new people can cause quality issues. Quality issues or defective products are very costly, even if the manufactured item does not reach the end customer. If the defective product reaches customers then it can cost even more because it tarnishes the manufacturers’ reputation. By increasing labour as the only means to increasing output, the cost of manufacturing, typically, doesn’t go down. This means there’s no gain in productivity and no decrease in manufacturing cost. This isn’t necessarily a good strategy in the long term because at a certain point the competition will undercut them by either using more inexpensive labour, or invest in technologies or equipment, which allows the competitor to make products at less cost. The competitor can then take away business that may be very difficult to get back.
To invest in equipment, especially automated equipment is in most cases the best option. Automated equipment establishes a long-term plan for a company to be more productive, and more competitive. It has an initial training period, but in the long term, if the equipment makes consistent quality parts on an ongoing basis, the company will be far more successful at manufacturing. The automated equipment will be able to meet increased output demands without adding the costs of a dramatic increase in the company’s labour force.
I really believe that the long-term viability of companies in North America or elsewhere is in automation. Automation helps manufacturers become more productive and competitive allowing them to survive the ongoing competition from other countries (that spend a lot less on labour), which allows them to maintain quality a lot easier.
It’s extremely wise to consider automation as a long-term strategy in the ongoing survival of a manufacturing company and/or the manufacturing industry. If you aren’t automating, you’re putting your company at serious risk in the future.
Your thoughts?