How to Lower Costs and Eliminate the High-Price of Doing Nothing

Profitable revenue growth and increasing the bottom line is the goal of every business. Any company, especially a manufacturer, not focused on growth is dying (even if they don’t know it yet).

Many manufacturing companies ignore the problems and inefficiencies hindering revenue growth. By embracing a “wait-till-next-year” solution-strategy the company ends up doing nothing, losing money and sacrificing revenue.

Ignoring problems is not a business strategy.

Analyzing the Cost of Doing Nothing

Let’s take a look at the cost of “doing nothing” for manufacturers.

Many companies struggle to ship on-time. Problems with production control and management leave the business vulnerable to late shipments. Without shop floor visibility or accurate production data, shipping estimates are guesswork. Without production control, a single problem can leave the shop floor behind schedule.

The result is late shipments. Companies might rush ship the order or discount to “fix” the late shipment, but the real cost is much deeper and more painful.

For example, paying operator overtime can double labor costs. As the exhausted shop floor rushes to complete work, errors and scrap increases. Pushing machines increases repair and maintenance costs. Without production control, accommodating a rush shipment leaves a tight production schedule in tatters, further adding production costs.

If you can’t guarantee a ship date to a customer, then the customer will find a manufacturer who can, further eating away at the bottom line.  

The cost of doing nothing, measured by the impact of late shipments and a lack of production management and control, is lost revenue, fading profitability and a tarnished reputation. Doing nothing isn’t a viable option.

The Benefit of a Solution

Eliminating late shipments through manufacturing software like Quantum will not only capture the lost revenue and increase profitability, but deliver additional benefits.

For example, providing accurate shipping estimates makes it easier to secure additional business. The shop floor can better handle this increased business by maximizing shop floor uptime and OEE with schedule accuracy. Accuracy leads to better bids and lower costs as you identify opportunities for sustainable process improvements. By maximizing your workforce and labor, the company can minimize the need for skilled labor, solving a problem many companies struggle with today.

The True ROI of a Manufacturing Solution

The ROI for Quantum is the elimination of obvious costs, like late shipments, and the hidden costs of problems and inefficiencies in production. With the solution in place, companies realize a rapid ROI for the production software solution.

Over time, benefits continue to increase; allowing the company to further invest in the business. The shop floor can better handle the change and increased output that comes with a growing business.

Companies need to stop seeing problems as a cost center, but a potential source of revenue. Solving problems will not only cut expenses but will add to the bottom line. Quit accepting errors, scrap and inefficiency as the cost of doing business.

Contact CIMxWant to learn more, or see how manufacturing software can help your business, then contact CIMx Software today to talk to an Application Specialist about Quantum.

Topics: How can software improve production?

Written by David Oeters