Efficiency Can Be the Best Path to a Better Bottom-Line

Efficiency Can Be the Best Path to a Better Bottom Line

The economy isn’t where anyone would like it to be, including manufacturers. Entire sectors of the economy remain closed, and demand at many manufacturers hasn’t fully recovered from the COVID pandemic's initial shock. As a result, the bottom-line for most discrete manufacturers has shrunk.

Usually, the path to turning around your bottom-line means "more." More machinery. More products. More people. More, more, more: it all adds up to more money in the bank, right?

Unless it doesn’t.

It’s like one of the spaceships Elon Musk will use to conquer Mars. For that rocket launch, too few rockets will keep his ship on the launch pad. Too many (or, put another way, an inefficient amount of) rockets will send Musk’s rocket into the ocean.

Musk needs to use his rockets efficiently. Simply adding more will not get him where he wants to be. When it comes to his rockets, Musk needs the right utilization rate. Adding more won’t help more earthbound manufacturers, either.

This year, stronger bottom-lines will depend on better-managed costs

Improved machine utilization rates, increased efficiency across the shop floor, reduced employee turnover, better management of raw materials, and accurately quoted jobs and contracts are more important than ever before.

Using efficiency and real-time data to improve decision-making is always important, and now more than ever. Previously, the economy was white-hot, and many plants didn't have the capacity to take on additional work. For at least the time being, that economy is gone.

Nearly every small and medium-sized business in America is in a fight for its life—and the best path forward for many manufacturers is cost containment and getting more from less.

Investing in technology that improves efficiency, increases productivity, and gives remote, real-time access to key utilization rates (KURs) isn’t a luxury that can wait until the economy recovers. The adoption of game-changing technology will drive recovery. Significant productivity increases are possible using technology and data tools already on the market today.

Access to real-time data gives you and your employees more control

The benefits of easy access to real-time data don’t just end with more efficient machines and less waste. Access to data allows employees to exert more control over their performance. Most employees want to be more productive. However, asking operators to be more productive without access to real-time data is like putting someone in a room with a book they’ve never read before—only to turn off the lights before opening the door and yelling at them for not understanding the plot.

Access to real-time data is the switch operators need that will help them turn on the light. Once that light is on, several things happen: Job and contracts previously based on estimates or outright guesses become data-driven; raw materials arrive on time, in the exact quantities needed; better data and better decision-making help inspire behavioral changes in employees.

Across the plant, an entire culture of performance improvement becomes a possibility. Employees feel as though they can make a difference and better understand how they contribute to shared goals. Management can better identify and reward top performers. The result is a stronger sense of belonging to a team and reduced staff transition in an industry known for having high turnover rates.

More is always exciting but isn't always the answer

Expanding a business by building a new plant or developing a brand-new product line is always the more glamorous way to grow—but it isn’t always the best way to grow.

Henry Ford built the foundation of a multi-generational, multi-century, multi-millennium company on cost control. You could purchase a Model T in any color, according to Mr. Ford, so long as it was black. Entire empires can be built on better cost management and improved efficiency.

Fortunately, access to real-time data and the benefits of improved KURs—including accurate contracts and better materials management—is available with Alora and JobBOSS. After they implemented Alora, one aerospace manufacturer saw a 177% increase in their key utilization rates (KURs). That increase resulted in $228K to the manufacturer’s bottom-line in the first 90 days.

Another $15M family-run discrete manufacturer saw $750K in annual savings using Alora. The increased efficiency and bottom-line profitability were equivalent to adding $3M in sales to the top-line annually.

Your company can’t meet its goals by simply adding more. This year, it has to do more with less.

And using Alora, it can take the opportunity to do more with less and build a company and a culture that will thrive for generations.

To learn more about increasing efficiency with Alora, visit this page to check out resources or contact a sales rep.

Duane Clements

About the Author

Duane Clements founded Data Inventions in 2014 to make manufacturing companies and their people more successful. Data Inventions’ Alora product was designed with manufacturers to utilize their existing resources more effectively and provide the tools and information people and companies need to perform their very best.