Ayn Rand is quoted as saying “We can ignore reality, but we cannot ignore the consequences of ignoring reality”. Every project has constraints. It is a fact that resources are not limited and a positive ROI is expected within a given timeframe. Every project that our team undertakes we seek to know immediately the goals and constraints are as they are fundamental to ensuring success. Within our manufacturing division this is no different. However, we have repeatedly witnessed within the industry a tendency to believe that boundaries exist where there are none and it creates a situation where strategic assets are not recognized or employed.
When we began Newcastle Manufacturing I wanted to know two things: what were the limits of our assets and what were the limitations of the team. These are two different constraints. We can’t internally go beyond our current equipment capabilities, but we can train ourselves beyond our current limits to fully utilize our equipment. It is a simple concept to understand: whatever part of a piece of equipment that is available but not used due to a lack of skill or rejection is not an asset, and it may be a very expensive unused portion both in terms of missed revenue and operating costs. It is an avoidable situation merely by taking stock of what is owned vs what is used, closing the gap and deciding to generate a return on the full use of the machine.
When a client walks into our shop they will not see wall-to-wall machinery, and that is by design. We have determined that we will purchase additional equipment when it is needed, but we have also decided that we will maximize what we have with the intelligent use of our assets, commercially available add-ons and increasing our knowledge base. This is the key to our agility and yields more return than an unnecessary increase in equipment. Additional output from more machines to cover inefficiencies only adds cost to us and our clients with no real benefit. Intentionally seeking optimization of our programs and machines, however, opens up additional time on our equipment, foregoing the need for additional assets and ongoing expenses.
The reality is that the major driver within the manufacturing sector is cost reduction with quality and speed. We no longer get to dictate the choosing of two by the client: fast, cheap or good – the customer base has stated they want all three or they will find another who can provide it. Simply by using the tools available to us we have accomplished this with many of our recent projects; in some cases we have been able to reduce machining times for single components by hours. As I write this blog entry I have beside my keyboard a widget for a customer that was estimated to take 2 hours and multiple operations by another shop; we have been able to produce it to spec in 26 minutes.
Are we among the most competitive or innovative in the industry? I would answer that by saying I believe that we are some of the most intentional ones and that alone generates very tangible results. We are deliberate about correctly identifying constraints and assets because that allows us to get a much clearer picture of reality. In doing so we are able to consistently deliver on time and at a lower price point.
Constraints are normal and should be expected. We should strive to understand where the boundaries truly are and take action to move our capabilities to the edge of those constraints. Expansion then can be easily identified as a true necessity to meet demand or growth strategies. But correct data must come first.