Workflow as a Competitive Advantage
As the cost of machine tools drops and the Baby Boomer generation enters retirement, the nature of competition between machine shops is trending toward data democratization and shop management software.
The evidence that your machine shop is organized and efficient is not necessarily tied to the shop’s overall cleanliness or how slick your company’s website appears. As the barrier to entry for startup job shops drops along with the cost of machine tools, the ability to tightly manage the entire process chain becomes more and more critical. On top of that, as older generations of workers retire, the need to eliminate tribal knowledge at job shops becomes more critical. As this article points out in greater detail, these two points are deeply related.
At the recent Top Shops Conference in Cincinnati, Ohio, Paul Van Metre, co-founder and president of the enterprise resource planning (ERP) software company ProShop, pointed out several metrics that prospective customers will use when deciding whether to award your shop its next contract. While the ability to machine quality parts may be widespread among your competitors, these are the areas of operation Mr. Van Metre says, if controlled properly, will give your shop a distinct advantage. Here are 10 key metrics, paired with Mr. Van Metre’s presentation commentary.
1. Accurate Estimates
“You're not going to come back to later and say, ‘Sorry, we messed that up and need to re-quote this job.’ You need to have a way to make sure that, if you're quoting this amount of work and this many hours in this many machines, you can actually pull that off.”
2. Contract Review Process
“You want to show them that your process is robust but efficient, and that you can successfully manage all the details, the revision levels, the flow-downs, and confirm all those details back to them so everyone’s on the same page. I would suggest you really dig into the details of your engineering process and show them how you are going to design the process to build their part right.”
3. Work Instructions
“You need to have the ability to show your work instructions, workholding management and cutting tool management. Show that your tools are specifically chosen for performance and reliability so their parts will be successful.”
“You want to show them that your processes for managing all purchasing requirements are solid. Show that you’re buying the right material with the right specs, the proper hardware, the right part numbers. If you are digital, you can show that the status of every job is available to you at any time. You have complete traceability of who did what and when they did it. And you can be really fast respond to changes.”
“Show them how you can easily see the real-time status of all your jobs and how the productivity today is going to be reflected in your delivery time in the future. You want to show them how you manage all your machines, tools, and everything so that your shop runs like a Swiss watch.”
6. Elimination of Tribal Knowledge
“You do a lot of training. Show how employees can share their setup notes and their solutions to problems, and how there is a free flow of communication between the office and the shop employees.”
“Show how your first article reports are done and that you're not waiting to the end to inspect their parts. Be able to prove that if there's a quality problem, it will be instantly identified and contained and resolved. Use in-process run charts. Show how you can monitor the quality through each step to ensure that there are no surprises at the end.”
8. Calibration Processes
“Inspection isn't really much good without calibrated instruments. Show them that you have really tight controls on your calibration processes, whether you send it out or whether you do it in house. It’s important to have a complete history of every gage that you use in your shop. If you are calibrating your own devices, you need to have records that are traceable.”
9. On-Time Delivery Performance
“You should be able to show with great detail why were you only 98% last May. ‘Well, it was because of these two orders. This is what happened, and this is the corrective action we put in place to make sure it didn't happen again. So let's talk about some of the details of metrics.’”
10. Flow-downs, Requirements and Shipping
“Every customer has lots of flow-downs and requirements and notes about how they want to receive their parts. Show them that you have a good process for collecting their requirements. Show that you don't have to rely on tribal knowledge in which only one person knows that this customer wants UPS deliveries and this one wants FedEx. Show that you can dial that information in and make sure it works seamlessly.”
The changing demands of aerospace companies have prompted machine shops such as this one to evolve their processes and equipment to become more competitive.
New geometry-driven quoting technology lets job shops generate estimates in as little as 15 minutes. It enables them to respond faster to RFQs, drastically reduces time wasted on jobs they don’t get, and lets them focus on more profitable work.
For this small job shop, measuring and controlling everything are the keys to lean—very lean—manufacturing. Yet its management style is surprisingly open and trusting.