Through modernization and automation, your shop can enhance its work quality while improving profits. PHOTO courtesy Humble Manufacturing.
By Justin Geach, Global Director of Marketing at Master Fluid Solutions
Job shops are an essential part of manufacturing. Due to their ability to perform small, large, or custom jobs with flexibility, job shops are a highly competitive and sought-after industry in North America.
This often makes it difficult for job shops to differentiate themselves from the competition. If your shop is one of many in your area, your product must be made better, faster, and competitively priced. But these aren’t the only attributes separating a top job shop from the pack.
Here’s how you can determine if your shop is reaching its full potential, how to improve its performance, and what businesses are looking for out of their top shops.
Industry Standards and KPIs for the Modern Job Shop
Since job shops vary in target markets and size, there is no one key performance indicator (KPI) that all job shops use to measure their success. However, there are some common metrics that businesses use to identify problem areas or opportunities for improvement. These include:
- Machine uptime
- Spindle utilization
- Cost per part
- Coolant cost per machine hour
- Actual productivity vs. target productivity
Out of these metrics, machine uptime is one of the most valuable. When machines are running and making parts, shops are more profitable. Therefore, Machine utilization is a critical KPI and machine uptime is a key contributor to your utilization rate.
While machine uptime indicates potential improvements, it is also a top benchmarking standard to measure your shop’s performance compared to competitors. Some other common benchmarking standards include scrap rate, part quality, and rework, which typically go hand in hand. If your part quality control goes up, your shop should have less scrap caused by errors or defects.
Many shops will also measure performance by improving the material removal rate (or MRR) to increase productivity. An increase in material removal rate indicates an increase in throughput, which determines if your shop is maximizing its machine utilization and profitability. New technology, such as next generation cutting tools, toolholding, workholding, and cutting fluids, can all have a significant impact on improving MRR.
What Businesses Look for in Their Top Job Shop
When it comes time for a manufacturer to hire a job shop for custom or quick turn work, they need to know the products they order will match or exceed both theirs and their customers’ expectations. Before placing their trust in a job shop, a manufacturer will have to determine if that shop meets their standards as well. Many businesses choose a job shop based on criteria such as:
- Communication level
- Part quality
- On-time delivery rate
For example, a job shop that prioritizes a high level of communication, on-time delivery, and consistent high-quality products will likely receive more business than competitors who don’t. By improving these elements, your job shop can garner trust, receive recommendations, and expand its network.
Improving Job Shop Performance
Your job shop may already be hitting many of its performance goals, but if you want to expand your business, consider upgrading some of your resources. Investing in higher-performance tooling, coolant, and workholding all allow for higher productivity and reduced overall costs.
Another major investment that can lead to significant improvements is manufacturing automation. Manufacturing is moving away from manual processes that can lead to errors, injury, and delays. Automating the areas of your job shop causing you the most trouble will increase productivity while reducing costs. Automation also allows for lights-out manufacturing, maximizing a shop’s investment in machinery.
On the other hand, resistance to change will hold some shops back. Job shops who choose to rely on outdated manual methods may find themselves struggling to secure modern manufacturing customers.
Staying Up to Date Keeps Your Job Shop On Top
Through modernization and automation, your shop can enhance its work quality while improving profits. Reinvesting these profits into your business, technology, or product diversification opens up the chance for future business and higher volume orders. By upgrading to modern solutions, your shop is likely to see a return on investment that pays off in the long term and keeps your job shop ahead of the competition.