Many people, particularly in Purchasing and Accounting, see buying at the lowest cost as being a key to sustaining their business.
- Solve problems first.
- Solve the problem for good.
- Understand that lowest cost over the long term is not the lowest price over the short term.
- Spend less time and money on maintenance by actually planning it.
Solve problems first
Solving problems is the most efficient use of your company’s talent and knowledge. The effort spent on solving the problem stops the deviation from normal in your immediate operations and reduces the potential expenditures on inspection, remediation and over-processing. Do you have a culture of problem solving?
Solve the problem for good.
It does no good to solve a problem today only to see it return later. That is not problem solving. It is critical to identify the root cause and then take permanent corrective actions to prevent that root cause from ever appearing again. “What problems has your team made go away forever in your shop? can you name one? Two? More?”
Understand that lowest cost over the long term is not the lowest price over the short term.
Yes, you can buy cheaper tooling from a jobber. Many purchasing departments are incorrectly focused on cost per tool, cost per pound of raw material or cost per gallon of metal removal fluid. Cheap drills are no bargain if they only last for 60 to 70 holes instead of 400 to 500 per drill. To be sustainable, the company needs to have the lowest cost to produce a compliant part, not only the cheapest materials to make it. Does your shop reward the purchase of the cheapest inputs for the job, or attaining the lowest cost for production of compliant parts?
Spend less time and money on maintenance by actually planning it.
Our industry is focused on reducing cycle time and Setup time – as it should. Without exception every shop owner or operations manager is focused on these. But if everyone is focused on these, how does that help you? For your shop to be uniquely sustainable, why not focus on eliminating unplanned downtime and lost production time due to unexpected breakdowns? It is a truism that we get what we measure. Today most shops have rigorous systems for ERP and operations planning, but does your shop have any process at all for proactive machine maintenance?
Today, customers expect Zero Defects and 100% On Time – from every supplier. Why not make your shop sustainable by actually having a 4 point process to get there by solving problems first, solving them for good, getting to lowest cost per compliant part produced, and eliminating unplanned downtime by actually planning for it?
For more details, please see our article in October 2015 issue of Production Machining
That’s a good point about how the lowest cost over the long term is not the lowest price over the short term. Sometimes you have to pay more for a solution that will end up saving you money. I bet shop managers spend a lot of time figuring out how to save costs.