Written by: Adrian Sansonetti
In an age where every second counts and attention spans are fleeting, the age-old concept of the elevator pitch is seeing a resurgence in its importance. But what exactly is it?
The Genesis of the Elevator Pitch:
The "elevator pitch" draws its name from a hypothetical scenario: imagine stepping into an elevator with someone influential in your industry, be it a top executive or a potential client. From the time it takes for that elevator to reach its destination, you have an extremely limited window to present an idea or sell your business's value. That's roughly 30 seconds – the length of a short elevator ride. Historically, the elevator pitch was a staple among salespeople and startups trying to catch the attention of investors. Today, it's a tool used by professionals in every industry to communicate efficiently and effectively.
Why is a 30-Second Elevator Pitch Important?:
In today's fast-paced environment, attention spans are limited. Whether you're at a networking event, industry conference, or even in a casual setting, being able to succinctly convey the essence of what your CNC machine shop does, and its unique value proposition, can open doors to fruitful opportunities.
Do’s of a Winning Elevator Pitch:
Don’ts of a Winning Elevator Pitch:
Leveraging ProShop ERP to Validate Your Competitive Discriminators:
ProShop ERP stands as a testament to the efficiency, quality, and management of your CNC shop. Here's how
In conclusion, the art of the elevator pitch, rooted in a tradition of seizing opportunity in the briefest of moments, is more critical today than ever before. But it's not just about what you say – it's also about being able to back it up. With ProShop ERP, CNC machine shop owners have a powerful tool that can validate their competitive discriminators and help them stand out in a crowded market.
Dale Carnegie was quoted as saying, “An hour of planning can save you 10 hours of doing.” and I believe that can be especially true of procurement planning. It’s not uncommon to forget a material purchase or purchase the wrong tool for a job, resulting in days worth of delays all because of a sloppy process. It might not be obvious at first glance, but procurement might be one of the most impactful functions of machine shop operations. Mistakes made in purchasing could impact profitability, on-time delivery, customer satisfaction, throughput, spindle up-time, and cash flow. This is why having a rock-solid procurement process is so very important.
Challenges pertaining to machine shop procurement are common. It doesn’t matter if you’re working in a large organization with dedicated procurement personnel or a small shop where purchasing is one of your many different hats. When managed well, good procurement practices contribute to your overall success. When managed poorly, it can cause a world of hurt. What kind of hurt? Let's run through some scenarios:
You could apply those same scenarios to the procurement of tooling and other consumables too. There is no shortage of places where missed details can place a job, or the business as a whole, at risk. That being said, those risks can be mitigated when you embrace a reliable system to simplify your procurement process.
Procurement planning really starts at the estimating stage of the job, where materials pricing, BOM items, outside process, and all other out-of-pocket costs need to be defined and estimated as accurately as possible along with all relevant lead times so that long lead items can be identified and planned for. When done properly, these estimations will set the stage for proper purchasing decisions to be made once the work has been awarded, so long as there is a means of disseminating that information from estimating to the procurement team during the job planning process.
The Pitfalls of Poor Procurement Practices
While there is a substantial list of possible procurement pitfalls, let’s talk about some of the most common ones to look out for. Solving these would be a great place to start if you’re serious about improving things.
1. Reactive purchasing: Reactive and unexpected purchasing is bad for several reasons. For one, you are probably reactively purchasing something because it wasn’t until you were mid-process that you realized you didn’t have what you needed. This means that you are likely already behind the 8-ball and probably paying added fees for expediting in order to minimize lost time. If you find yourself often purchasing reactively, then it's time to put an end to it. Incorporate some steps into your job planning process whereby a planner reviews all purchasing requirements for tooling, materials, and other consumables like we’ve incorporated into ProShop’s Pre-processing Checklist. This would include a review of existing inventory, and if needed, making a purchase request.
2. Over/under ordering: Ordering the wrong quantity is another common issue. In some cases, over-ordering material can lead to having too much cash tied up in inventoried materials. Under-ordering could mean not having enough quantity to fulfill active customer projects, resulting in missed due dates. This problem usually stems from missing information regarding current inventory levels along with total shop demand for materials based on all active orders. ProShop’s COTS module shows both pieces of information at a glance and ProShop’s cart purchasing system allows purchasers to see economic order quantities, total demand, and current inventory levels so that an informed decision can be made when issuing the PO. ProShop’s BOM management functionality similarly allows you to quickly and easily evaluate current inventory levels of BOM items so that allocation from inventory or a purchase request can be easily made.
3. Lack of visibility: Procurement issues can also stem from a lack of visibility regarding what needs to be purchased for certain projects, what the status is of outstanding vendor purchase orders, and which open purchase orders are time sensitive. Knowing this information allows you to act quickly where needed such as following up with a vendor about late vendor orders that are needed for critical jobs. In ProShop, we’ve solved this issue by leveraging a centralized purchasing dashboard where all purchase requests are summarized and categorized by type of purchase. This allows the purchaser to have a singular point of focus for all the purchasing needs of the organization. From here, purchase orders can be processed individually, or in bulk. ProShop’s receiving dashboard and watch lists for late vendor purchase orders provides instant visibility regarding critical items needed for jobs and when they can be expected to arrive.
Procurement and the bigger picture:
Approaching your purchasing needs with a spirit of “We’ll figure it out later” will only lead to increased frustration and decreased job performance. ProShop’s procurement and job planning tools help to facilitate procurement processes that increase business performance. That means having exactly what you need when needed, minimizing excess inventory, experiencing improved cash flow, and increased profit margins! Avoiding the pitfalls listed above will increase your rate of success while minimizing the wastes that result from poor procurement practices.
What kind of waste? In a recent case study with East Branch Engineering and Manufacturing, Chris estimates that within a year of implementing ProShop, he had realized a $20,000 reduction and expediting fees and $12,000 reduction in shipping fees because of ProShop’s job planning and procurement tools. Better visibility and job planning means no more frantic expedited orders due to overlooked details.
Tools that support proper procurement processes are another component of operational excellence that we’ve baked into ProShop ERP. If you’re ready to reduce frustration and increase the performance of your manufacturing business, get in touch today to learn how we can help!
Written by: Adrian Sansonetti
Crafting a legacy is more than filling a managerial seat; it's about storing and protecting years of institutional knowledge. With ProShop ERP, that wisdom is housed in a digital environment, giving your successors the roadmap they need for success.
🛡️Safeguarding Your Operational Assets❗
Your legacy is built on more than just the physical machines in the shop. It's about the operational strategies and methods that make your business unique. With ProShop, those are kept intact for the next generation. On top of that, having a cybersecurity strategy—like that offered by ProShop SAFE™ (Secure Access File Ecosystem)—ensures that your valuable operational details are well-protected.
📚Institutional Wisdom: The Unwritten Manual❗
Your unique skill set and years of hands-on experience aren't things you can easily pass on through a mere manual. ProShop captures this knowledge, so those who follow can build on a sturdy foundation of know-how.
👥Team Retention: Ensuring Continuity❗
Maintaining a strong team is crucial for sustaining your legacy. ProShop includes training modules to help ensure the existing team is prepared for any transition, thereby holding onto the human capital that makes your business tick.
⚖️Balancing Personal Goals with Business Objectives❗
Legacy planning isn't a one-size-fits-all endeavor. Maybe you have other business ventures or perhaps even personal milestones you want to reach. ProShop is flexible enough to accommodate these aspects into your overall planning.
🔄🚫Adapt or Perish❗
Last but not least, the CNC industry is ever-changing. Your legacy should not be a snapshot in time but a living, breathing entity. ProShop is scalable and adaptable, ensuring that your business can pivot as technology and market demands change. In essence, building a legacy in the CNC machine shop industry is not a one-off effort; it's an ongoing process. And with ProShop, you have a tool that's designed not just to help you manage today's challenges but to help you secure a lasting, prosperous legacy for the future. So, let's get planning. Cheers to a legacy that stands the test of time. 🍻
Are you guilty of over-promising and under-delivering? Have customers become accustomed to your inability to meet due dates as promised? Earning a reputation for being late isn’t going to propel your business forward, and its effect on customer perception of your business could be catastrophic.
Does managing shop floor scheduling and on-time delivery leave a pit in your stomach? The dynamic nature of the shop floor can make scheduling jobs and achieving on-time delivery feel like a constant battle. This can be a source of stress for so many manufacturers today. If you’ve been feeling this way, know that you aren’t alone.
Being consistently late makes life difficult for you, your team, and your customers, and unfortunately, this problem isn’t uncommon. It’s one of the main reasons manufacturers inquire about ProShop ERP in the first place. They’re tired of the mayhem that results from managing late jobs. Can ProShop help with that? Absolutely. That being said, the “how” might be a little different than what you were expecting.
Some among you might be tempted to say: “But every shop has issues with on-time delivery. That’s just how it is!”
Good luck with that approach. While it might be a fairly common problem to have, ask yourself this: If a customer had to choose between your shop which has a track record for shipping late, and a competitor shop who consistently achieves over 95% on-time delivery, who would they pick, all other things being equal?
Customers aren’t the only ones negatively affected by the shop floor pandemonium. You can only push your employees so hard. When racing around the shop trying to get late jobs out the door becomes the “normal” mode of operation, their job satisfaction will suffer. Building an excellent company culture with great employee retention relies on systems and processes that minimize chaotic situations like this.
Perhaps many shops DO struggle with on-time delivery, but that doesn’t make it ok. Customer relationships are based on trust. That trust gets damaged every time we promise a delivery date, and miss the mark. If you’re looking to make your manufacturing business stand out from the rest, focus on being trustworthy and reliable when it comes to meeting customer requirements like lead time. You’d be surprised by the impact.
Had enough of managing late jobs? If you’re looking to solve this problem for good, then it’d be worth observing some of the typical reasons why this problem exists in the first place, and we how solve them in ProShop:
1. Agreeing to a defined lead time without actually checking if you have the capacity to meet the requirement.
Saying yes to a lead time requirement in an effort to win the work without actually checking to see if you have the bandwidth to make it happen is a bad choice. Time and resources are, unfortunately, finite. It's time to stop agreeing to lead times that you know you can’t meet.
ProShop’s schedule and phantom job placement can help you account for the time the job would take, and see its impact alongside other jobs in the pipeline. This can help you determine if you have the capacity to meet the lead time.
2. Missing details during the estimating phase.
When building out a detailed estimate, it can be easy to miss things that have a large impact on lead times. This might include not accounting for the round trip lead time of an outside process, being too optimistic about process times, and missing long-lead tooling requirements. These factors alone could add up to weeks worth of delays. ProShop’s detailed estimating module allows you to make note of these details so that they can be planned for.
3. A lack of communication and planning.
You need a planning process in place for incoming new orders. This might include your contract review, job planning, and war-room planning process and planning meetings. This ensures that the right people are in the room to review all project details.
The pre-processing checklist built into the digital work order ensures that planning details like purchase requests for materials and tooling are completed for each job.
Regular scheduled production meetings can be helpful to discuss any WIP which might be held up for various reasons. This meeting might include discussion regarding open NCR’s, late vendor purchases, expediting, scheduling issues, and other blockers.
4. Inaccurate target times.
Since estimated set-up and cycle times are used to calculate job duration on the schedule, being too optimistic about how long the job will take can have a huge impact on achieving on-time delivery. It is important to be realistic about how long things will take during the estimating phase. Programmers can edit and update target times via the simulated time values from their CAM software. Later, the machinist can then also change the target time based on ACTUAL times achieved in getting a first part completed. When the target times become more accurate as information becomes available, the schedule becomes more accurate as a result.
5. Lack of shop floor visibility.
Knowledge is power, as they say. When you have visibility regarding your operations, you are better equipped to make decisions. ProShop provides that visibility with dashboards and reports that provide you with the needed information..
The machine schedule can provide a view into your existing pipeline, order of priority for active jobs, job status, and capacity planning features.
Dashboards for shipping and inspection can provide teams with a summary of jobs that are awaiting their attention, so that jobs aren’t sitting idle any longer than they need to. The receiving dashboard can alert teams to any outstanding vendor PO’s for materials or tooling that haven’t yet arrived, which may impact on-time delivery as well.
A summary of jobs that are late or scheduled to be late can help you make decisions of where to allocate resources to avoid late delivery.
How ProShop can help
If you’re ready to make a change, we’re here to help. While you might have been thinking that this blog would pitch the benefits of ProShop’s scheduling module on its own, it’s really the steps preceding the job’s placement on the schedule that cause most on-time delivery issues.
Chances are, your problem isn’t a lack of sophisticated job shop scheduling software, and that’s good news! ProShop provides an integrated system for manufacturing operations that allow you to systematically plan and process jobs so that consistent on-time delivery IS possible.
“ProShop was one of the best business decisions we’ve ever made. We’ve seen huge improvements in places we never expected. We’ve gone from spending 8 hours a day to achieve 50-60% OTD, to less than an hour a day to achieve 95%+ for over an entire year! It’s been a total game changer for us!” - Kody, Coastal Machine
Many ProShop customers like Kody have experienced a dramatic improvement in their on time delivery numbers because they have embraced a better planning and production process. ProShop ERP equips manufacturers with the tools and processes to eliminate the underlying problems that cause late delivery in the first place. In fact, clients on average see about a 25% improvement in their ontime delivery performance after implementing ProShop! Listen to several clients share this fact.
Book a call today so that you also can achieve over 95% on-time delivery and leave the competition in the dust!
Written by: Adrian Sansonetti
The machine shop industry thrives on precision, quality, and efficiency. A well-structured set of Key Performance Indicators (KPIs) can be the bedrock for your business' success. With the help of ProShop ERP , tracking these KPIs and integrating them into your operational workflow becomes effortless.
What are KPIs?
KPIs are quantifiable metrics that help organizations gauge their performance and achieve specific objectives. In the context of a machine shop, KPIs could include financial metrics, quality measures, and the invaluable metric of First Off Part Quality.
Importance of KPIs
Well-defined KPIs offer insights into what is working well and what isn't. They serve as a strategic compass, steering your operations and guiding realignment where needed.
Examples of Effective KPIs for Machine Shops
1. Gross Profit Margin
Formula: Gross Profit Margin = ((Revenue - Cost of Goods Sold) / Revenue) x 100
Real-Life Example: If your revenue is $500,000 and your Cost of Goods Sold (COGS) is $200,000, then Gross Profit Margin = ((500,000 - 200,000) / 500,000) x 100 = 60%
2. First Off Part Quality
Formula: First Off Part Quality = (Number of First Off Good Units / Total First Off Units Produced) x 100
Real-Life Example: If 5 first off parts are produced and 4 are of acceptable quality, then First Off Part Quality = (4 / 5) x 100 = 80%
Importance in Pre-Machining Processes:
First Off Part Quality is invaluable in ensuring that processes before actual machining—like design, planning, and material selection—are aligned to maximize efficiency. The ultimate goal is for your machines to produce good parts from the get-go, as defective parts cannot be sold and only add to operational costs.
3. Cost Per Part
Formula: Cost Per Part = Total Manufacturing Cost / Total Number of Parts Produced
Real-Life Example: If the total manufacturing cost is $12,000 and you produce 3,000 parts, then Cost Per Part = 12,000 / 3,000 = $4
How ProShop ERP Helps:
4. Cost of Quality (CoQ)
Formula: CoQ = Cost of Conformance + Cost of Non-Conformance
Real-Life Example: If the Cost of Conformance is $4,000 and the Cost of Non-Conformance is $1,000, then CoQ = 4,000 + 1,000 = $5,000
Metrics like Gross Profit Margin, First Off Part Quality, Cost Per Part, and Cost of Quality are instrumental in steering your machine shop towards higher performance, innovation, and growth. With ProShop ERP , you get a comprehensive tool that not only tracks these KPIs but also helps you integrate them into your daily operations for transformative results.