BENCHMARKING YOUR MACHINING BUSINESS
Benchmarking Value
By Derek korn
S
hop owners and managers rarely get
a chance to see others' machining
processes. Therein lies the value of our
magazine's application stories, which the
other editors and I create after visiting a shop.
Benchmarking data offer the same benefits
because that information provides insight
into lead-ing shops' performance, processes
and practices.
Matthew Wardle, president of JD Machine,
uses benchmarking to help guide change at
his Ogden, Utah shop. (JD Machine is the
2013 Business Strategy Honors Program
winner.) Mr. Wardle took over as company
president from his father in 1992. JD Machine
is the only business for which he has worked,
so he understands the importance of comparing his shop's per formance against
others and considering the business- and
technology-related strategies successful
companies are leveraging.
This is why Mr. Wardle and his management team try to obtain as much benchmarking-related information as possible. He says
this is one benefit to being a member of the
National Tooling and Machining Association
(NTMA), which conducts an annual survey
of its members to provide data related to
operating costs, executive pay, wages/
benefits and so on. In addition, Mr. Wardle
participates in the annual Top Shops benchmarking survey, which he says nicely complements NTMA's survey.
Some of the Top Shops benchmarking
information he and his team closely review
include profit margin, sales per employee,
spindle utilization and the lean manufacturing
practices shops apply. They also look at pay
rates for shopfloor personnel as well as the
common benefits that shops offer. There are
a number of shops in Utah, but not many of
them are as big as JD Machine. Therefore,
the company oftentimes has to look outside
the state to find new employees. The human
resources benchmarking data helps to ensure
it is offering a competitive wage and benefits
package, Mr. Wardle says.
Overall, benchmarking data show where
JD Machine is performing well and where
there's room for improvement. In addition,
the shop uses benchmarking data as part of
its strategic planning and SWOT (strengths,
weaknesses, oppor tunities and threats)
analysis as it set goals for each new year.
VIDEO
JD Machine employs a variety of advanced
machine tools at its facility. This video shows
a five-axis machining operation with multiple
parts on one fixture.
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