Remaining competitive means moving forward

Precision machining is a complex balancing act, a unique blend of high-tech machines and complex software and low-tech but difficult manual operations. Becoming and staying competitive is tough. Customers have become more demanding on price and quality, as well as timely delivery. There is no standing still. There is only moving forward or falling behind.

There are many paths forward but all have common themes.

Equipment

With the machinery, there are some givens.

The industry demands that shops be up-to-date with equipment and software. This becomes a continuing process of investment in new machinery and software, along with the appropriate training. For some shops, this could mean a substantial leap.

CNC machines are expensive, and so is the software needed to run an efficient shop. But not staying current means the gap widens until the day when the gap is too wide and too expensive to overcome, leading to business failure.

The best approach is to plan for constant, incremental changes so the gap never gets too wide.

This involves planning and keeping up on industry trends, which can be a difficult process at the best of times. However, not doing so means your competition may undercut your business with lower prices or faster delivery because they have more efficient equipment and processes.

Quality assurance

Getting it right the first time is difficult enough, but what happens when you don’t get it right the first time?

There always will be mistakes. But mistakes represent what a former airline CEO Jan Carlson called the moment of truth. Moments of truth are not about getting things right, but about making things right when they’ve gone wrong, even if it isn’t your fault.

To a precision shop, a part made with an error offers the opportunity to replace the part quickly and accurately and perhaps even improve the reputation of the shop. And reputation is everything in long-term customer relationships.

These long-term relationships are what supply chain management is all about. Gone are the days when a shop could exist on day-to-day orders. Now customers build relationships with suppliers, and although the suppliers may be tougher on pricing or delivery, the shops know that, in the end, there will be future orders.

Diversification of services

Controlling all the processes in fulfilling an order is another key element of competition. The more aspects of the job that you can complete in-house, the greater control you will have over job completion, quality, and delivery. But don’t stray too far from core services or you risk getting it wrong.

The work force

One of the hardest parts for any business to get right is managing the work force in a delicate balance of recruitment and retention.

Smaller firms need to pay particular attention to employee retention.

You can hire entry-level workers and train them and then face the challenge that they might leave your business as skilled workers and join a competitor, or you can hire at the top end and bite the bullet on higher wages. There is, of course, a middle ground.

Pay attention to aspects of compensation other than salary. Review your benefit program regularly and keep it current with the competition. Be generous with praise and reward employees for referrals, even if it isn’t about cash.

Certifications

One of the first things a prospective customer will want to know about your shop is what certifications you have. At a minimum, you’ll need the appropriate ISO 9000 series certification, approved supplier status, and preferably welding that meets standards set by the Canadian Welding Bureau (CWB).

Business development includes the internet

There is a danger in neglecting the process of business development. At a minimum, shops must have some visibility on the internet, including both a website and some presence on social media.

When a prospect first hears or reads the name of your business, the first place they will go to learn more is the internet. This will be important if and when orders start to fall off and you’re beginning to reach out.

Assume your competitors will also be there. No presence means invisibility. If prospects don’t find you, you risk their drawing the conclusion that if you are not keeping pace with the times, perhaps your business is not up-to-date either.

The first step in business development is to build and maintain a company website, and this can begin with a check to see if a domain name incorporating your business name, such as www.yourbusiness.com, is available.

Any of the large domain name registrars can do this, and it takes only seconds on their websites. If the .com suffix is taken for whatever reason, the registrar can suggest alternatives. In Canada, an alternative to .com is .ca.

The next essential in web visibility is a Facebook business page, and this is only slightly more complicated than a personal Facebook page. Some of the content from your website can be used on the Facebook page, and then you are visible on Facebook as well.

Establishing a Linkedin business page is a little more complicated, and again you must first have a personal page. Personal pages are easy. Business pages are a little less so, but you can easily find instructions on the internet.

If this seems too complicated you can hire a service or individual to do if for you. Once your social media presence is established, the more important factor is keeping content up-to-date. If you engaged a service or individual to build your website, they might also provide an ongoing flow of content. You must of course bring them up-to-speed on the essentials of how your business works.

All of this assumes that you have some form of consistent graphic identity incorporating the name of your business so there is never any confusion with prospects as to who you are.

The whole process of getting and remaining competitive may seem overwhelming. The key is to attend to all of the above on a regular basis and incorporate it into your business practices.