Two Ways Improvements Boost Your Bottom Line
When we approach the idea of making improvements to our shops, our machines, and our processes, we are typically thinking of the bottom line. How can we increase productivity and through-put? How can we reduce mistakes, re-makes and lead times? This focus is good - and if we are diligent about taking the proper steps towards process improvement, it produces good results. However, we sometimes get so caught up in the tangible benefits of the improvement itself that we fail to notice the benefits afforded to us by seeking to improve in the first place. This is what I call the Opportunity of ContinuoUs Improvement.
Let me give an example to explain...
The Opportunity of ContinuoUs Improvement
One of our HVACDMA members was struggling with their Spiral Head change-over. At 18 minutes per change, and averaging 10 change-overs a day, their machine was effectively down for 3 hours a day. Through the process of ContinuoUs Improvement, and with some serious out-of-the-box thinking, they were able to shave 15 minutes off their head change time, completing a change-over in just three minutes.
As you might imagine, this improvement made a significant difference in their bottom line. By going from 3 hours of downtime to 30 minutes of downtime a day, they saved over $18,000 in annual labor. But that is only the tip of the iceberg; the tangible improvement benefit. Here's the revolutionary question they asked themselves:
What do we do with our reclaimed time?
When they started looking for ways to reinvest their reclaimed labor time, they realized something significant: they could put those new hours back into production and drastically increase revenues. With an extra 150 minutes of labor reclaimed each day, and the spiral machine running out 10" - 14" diameter pipe at a rate of four pieces per minute, they realized that they could produce an additional 600 pieces a day with the reclaimed time. At an average sale price of $30 per piece, and with a 50% margin, they could increase gross profits by $9,000 per day. By accomplishing this one improvement, they opened the door to a potential increase of over $2,000,000 in annual profit!
This is the Opportunity of ContinuoUs Improvement. What would you do with more time? Would you take on new opportunities? Reduce lead times? Bring on more work? Beef up your bottom line? It's all there for you if you commit to the process of ContinuoUs Improvement.
If you are ready to start your journey towards a stronger bottom line, please Contact Us. Join the HVAC Duct Manufacturers Association and together, we will help you move towards your goals and take your business to the next level.