feature
it's interesting to note that the median values
for Top Shops and other shops for this ratio
were 70 percent and 51 percent, respectively. Top Shops are able to generate more
accurate quotes because they have a better
handle on their overall processes. They
also seem more disciplined about the type
of work they go after, quoting only jobs that
look to be a good match in terms of their
capability and capacity.
Table 5 shows that many of today's leading shops have adopted a business model
whereby they strive to provide more than
just accurately machined parts. For example, some operations now offer assembly,
customer inventory management and design
for manufacturability (DFM) advice. In applying DFM, shops review customer designs
and suggest modifications that would
simplify manufacturing while lowering costs.
In fact, the article "Beyond Parts from Prints"
profiles a company that leverages its engineering capabilities to apply DFM principles
to both its own product line and the contract
work it performs for others. Working with
customers in such a way makes the company more like an essential, integral partner
than a parts supplier.
This year's survey revealed an uptick
in the use of the Internet and social media
as sales and marketing tools. In 2011, only
5.4 percent of the Top Shops created videos
and uploaded them to YouTube. This has
grown to more than 16 percent for 2013.
Similarly, nearly 23 percent of this year's
Top Shops use social media—Facebook,
Twitter, LinkedIn, etc.—compared to only
11 percent in 2011. It's hard to judge how
effective these marketing tools are, but it's
evident that an increasing number of
leading shops are testing the waters in an
effort to get their company's message in
Table 6—HouRlY WaGes In
2012 (MeDIan Values)
Top oTHeR
sHops sHops
Machine Operators
$17
$16
Set-up Personnel
$21
$20
CAM Programmers
$26
$24
front of additional customers.
The business strategy Honors Program
Winner is JD Machine, located in Odgen,
Utah. JD Machine is a manufacturer of
high-value machined parts, sheet metal
components and complex assemblies. It
is the only business for which Matthew
Wardle, now company president, has
worked. This is one reason why he feels
benchmarking is such an important part
of his business strategy. "I appreciate that
Modern Machine Shop offers its Top Shops
benchmarking survey," he explains. "The
data it provides enables us to see where
we're excelling, where we need to improve,
and what processes and technology we
should consider to enable us to become
more profitable. This type of information
can be very tough to come by, especially
for small shops like ours."
HuMan ResouRces
As shown in Table 6, Top Shops pay their
manufacturing personnel only slightly higher
hourly wages than the other surveyed shops.
However, Top Shops also use other humanresource efforts to attract and retain good
employees (see Table 7). For example, they
are more likely to offer bonus plans. This
is a win-win in that the employees are
motivated by the potential for additional
mmsonline.com/topshops August 2013 MMS 15