As 2023 comes to a close, it’s time to ask yourself, “Are we better off than we were at the start of the year?” This exercise isn’t a box to check for manufacturing improvement; it’s a cornerstone of growth for every shop. Reflecting on the past year, quarter, or even day isn’t just about celebrating victories—it’s about understanding the lessons from every outcome.
Keep reading to learn how deliberate reflection ensures that continuous improvement is effectively woven into the fabric of your company’s culture.
You Need a Holistic Approach to Internal Evaluation
When it comes to evaluating your business, a diverse perspective is crucial. Your company is a multifaceted organism, and each part must work in harmony for the whole to thrive. This means stepping beyond the isolated views of a single leader and inviting input from across your organization, from your machine shop management team to your newest intern.
For example, while one department may report soaring success, another might be quietly struggling. Only through inclusive dialogue can a true picture of your company’s health emerge. Remember, it’s not about individual wins or losses; it’s about the overall wellness of the collective. As we’ve learned at NTMA, success is a team sport, and every voice contributes to the final score.
You Are Your Own Best Competitor
Many years ago, NTMA president Roger Atkins wrote an article advising members to employ a self-benchmarking approach, comparing their shop’s metrics year over year (YOY). More than a decade later, a shop owner reached out to tell Roger that he’d done just that, regularly collecting data and assessing his shop’s current performance against previous results.
The shop’s efforts paid off. Over a dozen years, this systematic approach to self-evaluation provided a clear narrative of improvement and growth, eventually leading to the very lucrative sale of this man’s CNC business!
The shop owner’s success story highlights two critical factors: consistency and intent. By purposefully benchmarking against his past performance, he was not only able to improve his operations year after year but also present a compelling, data-driven story to potential buyers. His experience illustrates that the most insightful competitor is often your past self.
Make Deliberate Reflection a Routine
The most successful shops don’t wait for a downturn to reflect—they make it routine.
Institute a regular schedule for evaluation, and you’ll embed this crucial practice into your operational DNA. Whether it’s monthly, quarterly, or annually, set a cadence for reflection and it will soon feel as natural as any other business process.
Regular, deliberate reflection helps shop leaders identify patterns, understand the ebb and flow of the business, and make proactive adjustments. Your goal is to create a rhythm that keeps your business agile and responsive, ready to celebrate successes and tackle challenges with equal vigor.
Benchmarking Delivers Quantitative Insights for Growth
Benchmarking is much more than a glance at the financial surface of your organization; it’s a comprehensive exploration of your business’s inner workings—financial and beyond.
Identify the relevant indicators for your specific business. What does your unique shop need to track? Inventory turnover, employee productivity, and customer satisfaction are just a few examples of assessments that drive improvement when you implement a measurable, numerical perspective and refer to it during decision-making.
Who other aspects can benchmarking illuminate? Consider labor productivity, inventory management, and customer diversification. By pinpointing these metrics, you gain clarity on your strengths and areas for improvement so you can tailor your strategies effectively.
Act on Your Insights
Collecting data and insights is just the beginning. The real power lies in taking action on what you’ve learned. Taking action helps machine shop management prevent stagnation and foster a culture of progress.
Data without decision-making is like having a map but never leaving your house, so move beyond analysis and implement change! Only by taking action can you transform a good business into a great one.
NTMA’s Annual Benchmarking Survey Offers Targeted Insights
The most powerful benchmarking resources you can leverage are NTMA’s annual, members-only benchmarking surveys and reports. These comprehensive surveys provide a structured, third-party, private assessment of your business’s performance. You’ll gain access to a wealth of data comparing your CNC business against others in your region and industry. You’ll see not only where you stand but also get a holistic view of the industry at large.
Our benchmarking surveys cover various facets, including operating costs, executive compensation, wages and fringe benefits, and business conditions, offering a detailed view of where your shop stands in the broader industry landscape. This external perspective is valuable for strategic planning and identifying areas for improvement.
Prepare to invest 4-6 hours into completing your first benchmarking survey. We guarantee the results are worth the effort!
Benchmarking Is the Bedrock of Progress
By regularly asking, “Are we better off than we were yesterday?”—and having the tools to answer that question comprehensively—machine shop management sets the stage for impactful, ongoing improvement.
So, let’s enter the new year with a commitment to ask the right questions and act on the answers we uncover. Together, we’ll forge a path toward a future where our businesses—and our teams—flourish for the long haul.
Want to take part in NTMA’s 2024 benchmarking surveys? Become a member!