Precision machining is a complex balancing act—a unique blend of high-tech machines and complex software and low tech but difficult manual operations such as deburring. Becoming and staying competitive is tough. Customers have become more demanding of price and quality as well as timely delivery. There is no standing still. There is only moving forward or falling behind.
This article will offer some suggestions on how to be competitive and if nothing else should at least prompt some debate on the topic.
With the machinery, there are some givens. The industry demands being up-to-date with equipment and software. This becomes a continuing process of investment in new machinery and software along with the appropriate training. For some shops, this could mean a substantial leap. CNC machines are expensive and so is the software to run an efficient shop. But not staying current means the gap widens until the day where it is too wide and too expensive to overcome leading to business failure. The best approach is to plan for incremental changes, bit-by-bit but constant so the gap never gets too wide. This does involve planning and keeping up on industry trends—a difficult process at the best of times but not to do so means your competition may undercut your business with lower prices or faster delivery because they have more efficient equipment and processes.
Then there is quality assurance. Getting it right the first time is difficult enough but what happens when you don’t get it right the first time. There will always be mistakes. But mistakes represent what a former airline CEO, Jan Carlson called the moment of truth. For an airline one example of this would be what happens when a passenger spills spaghetti sauce on his tie and has an important business meeting following arrival. A flight attendant goes to work immediately, even before the passenger can request help and with a cloth and some cold water removes almost all of the stain. The outcome is actually better for the airline than if nothing had ever happened, an opportunity to impress the customer with how quickly and effectively you can recover even though it might have been the customer’s mistake. Moments of truth are not about getting things right but about getting things right when they’ve gone wrong even if it isn’t your fault.
To a precision shop, a part made with an error or not to spec offers the same opportunity to replace the part quickly and accurately and perhaps even improve on the reputation of the shop. And reputation is everything with long term customer relationships and long-term relationships are what supply chain management is all about. Gone are the days when a shop could exist on day-to-day orders. Now customers build relationships with suppliers and although the suppliers may be tougher on pricing or delivery, the shops know that in the end there will be future orders.
Diversification of Services
Controlling all the processes in fulfilling an order is another key element of competition. The more aspects of the job that can be completed in-house the greater control you will have on job completion, quality and on-time delivery. But don’t stray too far from core services or you risk getting it wrong.
Ingadale Industries provides full service for most orders which includes certified welding in both aluminum and steel, painting, honing, grinding, passivating as well as painting to defense industry standards. This list of services that Ingadale can provide in-house also includes welding for both steel and aluminum. It wasn’t so much that they decided to do all of this. It was a query about getting a part painted that started them down this path. Eventually painting was an additional service offered by Ingadale who recognized the opportunity for value added and greater control and now are adding other services that are not just machining.
One of the hardest parts to get right for any business is managing the workforce in a delicate balance of recruitment and retention. Greg Holdsworth, General Manager of Ingadale Indsutries says, “Out greatest asset goes home every night and the hard part is to ensure that it returns the next morning.”
Smaller firms need to pay particular attention to employee retention. You can hire workers at entry level and train them and face the challenge that they might leave your business as skilled workers and join a competitor or you can hire at the top end and bite the bullet on higher wages. There is, of course a middle ground. Pay attention to aspects of compensation other than salary. Ensure your benefit program is reviewed regularly and kept current with competition. Be generous with praise and reward employees for referrals even if it isn’t about cash.
Ingadale has a very homogeneous workforce because current employees don’t hesitate to recommend the shop to friends and family. As a result, almost everyone knows everyone else. Holdsworth said, “Our founding partners believed in treating people fairly and were receptive to employee complaints and suggestions. If I had to start from scratch to build a machining business I would have to design employment practices that replicated what happened here as a result of the founders’ values.”
One of the first things a prospective customer will want to know about your shop is what certifications you have. At a minimum, you’ll need the appropriate ISO 9000 series, approved supplier status and preferably welding to standards set by the Canadian Welding Bureau.
Getting and Keeping Customers
There is a danger in neglecting the process of business development. At a bare, minimum shops must have some visibility on the web including both a website and some presence on social media. The reason for doing this is that when a prospect first hears or reads the name of your business, the first place they will go to learn more is the Internet. This will be important if and when orders start to fall off and you’re beginning to reach out. Assume your competitors will also be there. No presence means invisibility. If prospects don’t find you, you risk that they will draw the conclusion that if you are not keeping pace with the times that perhaps your business is not up-to-date as well.
The first step in business development is to build and maintain a company website and this can begin with a check to see if a domain name incorporating your business name such as: www.yourbusiness.com is available. Any of the large domain name registrars such as Goddady can do this and it takes only seconds on their websites. If the “.com” suffix is taken for whatever reason the registrar can suggest alternatives. In Canada, an alternative to “.com” could be “ca”. The next step after nailing down the domain name, usually with an annual fee, is to begin to construct a website. Godaddy, or some of the other registrars can help with this as well, providing a template to build the site with components of a site consisting of text and images. Godaddy or other registrars can also lead you through the process of matching your domain name with the server location of your completed site and then you are ready to take the site live.
The next essential in web visibility is a Facebook (FB) business page and this is only slightly more complicated than a personal Facebook page. Some of the content from your website can be used on the Facebook page and then you are visible on Facebook as well.
A little more complicated is establishing a Linkedin business page and once again you must first have a personal page. Personal pages are easy. Business pages a little less so but easily available instructions can be found on the Internet on how to do this.
It might make sense to get some help to do all this and there are many services and individuals who will do so for a fair price. The more important factor is keeping content up-to-date. Again, if you engaged a service or individual to build your website, they can might also provide an ongoing flow of content. You must of course bring them up-to-speed on the essentials of how your business works.
All of this assumes that you have some form of consistent graphic identity incorporating the name of your business so there is never any confusion with prospects as to who you are.
The whole process of getting and remaining competitive may seem overwhelming. The key is to attend to all of the above on a regular basis and incorporate it into your business practices.