Benchmarking: An Invaluable Business Tool

In difficult and uncertain business conditions, it’s important for manufacturers, especially small and medium-sized enterprises, to know where they stand and take every opportunity they have to improve, but gathering this information requires cooperation. Modern Machine Shop’s Top Shops program is designed to help shops understand, measure and assess how their business compares to similar manufacturers.

It starts with an online survey (open now through April 30) that covers four business pillars: operations, technology, business strategy and human resources. Participants answer in-depth questions on a variety of metrics, including scrap rate, order lead time, capacity utilization, on-time delivery rate, quality, capital spending, customer retention, sales per employee, sales growth, profit margin, inventory, machine uptime, wages, labor turnover, supply chain practices, marketing practices, certifications and more. The survey also asks, among other things, profile questions like industries served, as well as materials, processes, tooling types and inspection technology used.

Participating companies will receive a custom benchmarking report containing the company’s responses to the questions, along with aggregated responses from other participants. This is powerful information that shows shops how their competitors are performing, what their own areas of strengths are and opportunities to improve their business.

Select questions on the survey are scored and summed per participating shop to determine which participants are designated as “Top Shops.” These businesses typically represent the top 20% of scorers in a given year. Additionally, shops that complete the survey are eligible for consideration in the Top Shops Honors Program. Four shops, one representing each business pillar (operations, technology, business strategy and human resources), will receive special recognition from Modern Machine Shop, including coverage in the pages of the magazine, online and in our e-newsletter. 

“We hear at industry events, association meetings, and shop visits that Top Shops data makes for a key tool that is regularly considered in the development of shop strategies and action plans,” says Jan Schafer, director of market research for Gardner Intelligence, the research and analytics division of Gardner Business Media, publisher of Modern Machine Shop. “An inherent bonus is that any shop participating in Top Shops may be designated a Top Shop or selected for special recognition. That is because questions are designed to create a level playing field so any shop can stand out on performance.”

“In every way, Top Shops is designed for you,” she continues. “It is yours to leverage. Keep the feedback coming and we will continue to address the ways you tell us to make Top Shops optimally relevant and useful.”