The only cycle time that matters: From PO to paid in full

If you hang around in machine shops long enough, you will hear the words cycle time more frequently than you can count. In fact, those two words likely are used more than all of the other “times,” like lead time, setup time, chip-to-chip time, spindle uptime, takt time, and coffee time, put together.

Even the greenest apprentice knows that a machine’s cycle time is the recorded (and tracked) time required to complete all of a workpiece’s machining operations. While this tried-and-true metric is a good baseline key performance indicator (KPI), it also is affected by outside influences, such as tool indexing, offset adjustments, chips clearing, and even bathroom breaks.

More advanced versions of the cycle time metric, including effective machine cycle time and value-creating time, can give you a better idea of what’s truly happening to your part, but they still create only a relatively small amount of data.

Two closely linked KPIs that should be tracked are production lead time (also called door-to-door time) and order lead time. Production lead time is how long it takes for a part to move through the entire production process from order to completion, while order lead time is the production lead time and all of the time spent getting your parts to your customer, including unforeseen delays. In other words, it’s the time the customer spends waiting on you.

The ultimate KPI—the omega—is your order-to-payment time. This is the amount of time between getting a purchase order and getting paid.

Reducing this time begets machine-hour capacity, which begets more part production, which begets more cash in your Levis.

Newly found machine time opens the door for more business, including new customers.

While getting repeat business from loyal customers is the élan vital, or vital impulse, of any business, new sales are just as important. And when you are targeting a new potential customer, it’s important to have a strategy.

In his book New Sales. Simplified. The Essential Handbook for Prospecting and New Business Development, author Mike Weinberg offers an actions-based guide for sales teams trying to win new business in a competitive marketplace.

Weinberg identifies nine strategic acts for growing new sales, including the obvious work of identifying a finite, workable list of genuine prospects and drafting a compelling, customer-focused sales story.

Your sales story should be fine-tuned until it becomes a unique pitch for each member of the prospects list. It’s used to aid in another of Weinberg’s acts: building rapport to engender trust.

The most interesting act that the author advises is overcoming, preventing even, a buyer’s natural anti-salesperson reflex.

No one likes the “Glengarry Glen Ross” sales pitch anymore. No matter how much time they have.