How Competitive Is Your Business Performance?

BY: GEORGE SINGOS

Many times, small and mid-sized manufacturers are focused on getting product out the door rather than managing the business. Often, this means underlying issues in operations go unnoticed, ultimately affecting the bottom line in significant ways.

Have you ever wondered where your manufacturing performance stands compared to similar companies? Most manufacturers would be surprised to discover how they fare against competitors on a few key metrics, including scrap and rework, equipment up time, schedule bumping, employee turnover, inventory turns, on-time delivery and days receivable. A full assessment of these and other metrics can be attained through The Center’s Transformation Planner.

To receive an objective and insightful assessment of their business, manufacturers can have The Center, an outside organization with experience in all types of industries and business ownership (from family-owned to private equity), come in to evaluate their most critical performance metrics. This complimentary tool assesses performance compared to similar manufacturers (for example, comparing high volume/low mix companies, low volume/high mix, service industries and other industry sectors) and provides future-state performance improvements with annualized savings and one-time cash conversions.

Let’s consider an example of annualized savings that could be achieved with the Transformation Planner. A typical company that has $10 million in revenue could increase its equipment up time by 10% (from 70% to 80%), which would yield an annual benefit of approximately $250,000. This would move the company from the 50^th percentile in our database to the 70^th percentile, going from average to best in class. Or, here’s an example of a one-time cash conversion: if the same company improved their inventory turns from five to seven, that would move the company from the 40^th percentile to the average 50^th percentile. This also would result in a one-time cash conversion of approximately $350,000.

So, why does this matter? If manufacturers know where they stand compared to others in the industry, it will enable them to focus on the areas where they are relatively weak. Importantly, it also enables them to understand the financial impact of these under-performing areas in their business, ultimately providing companies with a customized roadmap to improvement.

To learn how your company performance stacks up against competitors, contact The Center at inquiry@the-center.org to schedule your free Transformation Planner assessment. For a more in-depth look at your business practices and potential innovation opportunities, The Center also offers a complimentary Technology Opportunity Assessment. Learn more about this assessment here.


MEET OUR EXPERT

George Singos, Business Leader Advisor
George Singos is the Business Leader Advisor for the Michigan Manufacturing Technology Center. He has more than 30 years of manufacturing experience in various capacities. For the past 20+ years, he has focused on sales and marketing management both domestically and internationally. Prior to joining The Center, George spent the previous 10 years working in International Business Development. His primary focus was growing International Sales in Europe and East Asia while supporting North American, South American and ASEAN operations.  

Since 1991, the Michigan Manufacturing Technology Center has assisted Michigan’s small and medium-sized businesses to successfully compete and grow. Through personalized services designed to meet the needs of clients, we develop more effective business leaders, drive product and process innovation, promote company-wide operational excellence and foster creative strategies for business growth and greater profitability. Find us at www.the-center.org.