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You’re never alone in the marketplace. Your customers always have the choice to buy from someone else. And if your competition is more competitive, reacts faster or provides shorter leader times than you – there is most definitely a risk. Sometimes you won’t know you are losing orders and market share until it is too late.
But it’s not always obvious to see why your sales have taken a sudden dip, but lead times are often a big factor, so here are three common reasons why you might be too busy to offer the best lead times.
It might seem contradictory, but a growing company can sometimes be its own worst enemy. As your reputation increases and your sales go up, you’ll need to make more machines and you’ll have to make them faster to cope with demand. But there’s a problem. You’ve hit your maximum production capacity. In other words, you can’t work any quicker with the resources you have. With the orders coming in fast, there’s no choice but to make more machines with the resources at hand. Of course, that means you will be frustrating customers with longer lead times – you may be lucky and they are prepared to wait , or they may not be prepared to and they turn to your competitors.
The natural reaction to the above problem is to invest in improving your resources. Expanding factories, buying more equipment or hiring more people. But these are significant risks that can be as damaging as they are profitable. Not only will they add significantly to your overheads, but that surge in orders might not last forever. When there’s a dip, suddenly you’re paying for expensive space, equipment and labour that you won’t always need. A major and damaging effect on your profitability.
It’s tempting to try and take control of everything. But you can’t be masters of every process – it’s physically and financially impossible. You know what your business is good at and you should put as much of your energy and investment into that as you can. Equally you’ll be inefficient in some other areas. Areas that are probably preventing you from breaking through that production ceiling. The answer? Outsource those areas to a competent partner that let’s you focus on what you do best.
If you can offer market the best available lead times in your market place – your customers have no reason to look elsewhere.
The best option, rather than investing in expensive facilities or people, is to outsource.
By passing some of the manufacturing load onto a competent partner, you will improve your production times and get to market faster. Now you can cope with that surge in sales, and make more money without being constrained by your own facilities and resources.
Your outsource partner can put the time, effort and investment into improving the processes you were handling inefficiently, and you can focus on what you do best.
And if your sales do take a dip, you don’t suffer from the increased overheads associated with additional buildings, plant or people.
Your strategic partner could be one of the world’s leading providers of automation and control systems. PP Control and Automation will work with you to put together an outsourcing solution that best suits your needs. Whether it be module or assembly based, part machine build or full build. We don’t assume what has worked for one client will work for another.
See your business grow and maximize profits by outsourcing with PP Control and Automation. Click here to find out more.