"You can shrink your shop, or you can grow it. But you can't stay still." These were the words spoken at a business coaching session that our shop went through a few years ago.
At first, our production manager and I thought the coach was joking. We thought we had it all figured out at our shop. The workload was pretty even and we had a good, stable staff in place. The machinery had been updated, and we'd embraced new software and technology. Give us a break, we thought. More change?
Then, things started to happen: the outrage and tragedy of September 11, 2001; an economy in a downturn; spiralling insurance costs; more challenges, more change.
We realized we needed to stay as flexible as possible to deal
with all of these transformations. We began to look at our
operation from a different perspective the ability to expand and
shrink more easily.
I recommend taking a new look at your operation. For example, many shops have brochures of their work printed ones that show what they do, complete with glossy photographs and references. We did it for years. It's great, but it's expensive and a pretty static way of showcasing your work.
Try some changes. A Web site has become a very accepted place to illustrate what it is that you do. And, depending upon where you're located, you may find your clients actually prefer checking you out online, from their own home; they don't have to come to your showroom or place of business. What's more, you can change the content of your Web site a lot more easily than a pile of printed brochures or postcards.
You may want to consider creating personalized brochures, where you tailor-make each one depending upon the potential customer's needs. You could scan photos of your work into your PC and use a basic publishing program to create a simple page or more of shots and some brief text. A $150 printer will produce decent copies (if you use the right paper).
While these approaches require a little more set-up, once in place, they may be easier and cheaper to try. Plus, they can give you more flexibility to change as needed.
In pre-production and at the office, my advice is to keep it lean. Computerizing your shop drawings, layout and cutlisting can help, but be aware of the learning curves both in the office and on the shop floor with this. It's fair to say that the shops that have embraced CAD (computer-aided drawing) are more equipped to deal with changes to field conditions, architects' corrections, etc. Against the down side of finding people who are skilled at this work are the advantages of speed, consistency and accuracy. You can draw and detail more with fewer people.
You might want to consider subcontracting some of this work, too. Your shop may be more at the mercy of a particular detailer's availability, but you won't have to maintain that constant payroll burden.
In your office, try to outsource certain activities payroll for
instance. Many shops, especially small operations with less than
five employees, find that outsourcing for this service can free up
office management. Larger operations can also outsource tasks such
as human resources and financial analysis, among others.
On the shop floor, it all begins with machinery. The constant demand for "faster, better, cheaper" is here to stay, I'm afraid, so get used to it.
You need to focus on the three core machines of the modern cabinet shop: the saw, the edgebander and the drill/router These are where you can now make or lose money.
A beam saw used to cost a small fortune, but it's more affordable now and it can cut an awesome amount of parts quickly and accurately. Yes, it takes up more space than a regular saw, but it can save your shop lots of time. With one operator and a trained back-up person, it can give your shop the flexibility to cut fast as the need arises.
A good edgebander may also not run constantly, but when it does, it will give you the speed you need. If you can build this adaptability into your shop, you'll have a better chance of dealing effectively with change.
Buying a point-to-point machine, or a router, is arguable. Here, too, you may find that, if your shop reaches 10 or more employees, this type of equipment is very justifiable. It, too, is fast and accurate, and has that built-in repeatability factor.
Consider outsourcing, too. Look at door and drawer manufacturers. They've come a long way in the last few years, and, in general, are very motivated to look at new cabinet shop accounts, since they want to be operating at full capacity.
You may also want to look at subcontracting other tasks. Today, many shops are not doing finishing and painting themselves. Others are looking at delivery companies to ship the work. Some of these firms have warehouse space available, as well.
Some shops also hire outside installation firms to install their work. Care is needed here, as it's your shop's name on the work. Know with whom you're dealing.
Your physical plant is worth questioning, as well. Do you have too much space? Could you rent out storage more cheaply or on an as-needed basis only? Are you over-improving your shop with fixtures or storage racks that could be purchased for less? How flexible is your lease?
The last area to examine is often the most difficult: dealing with changes on a staff level. You need to look at who and how to hire and fire, which jobs to take and decline. There are no easy answers here. Sometimes your shop will keep people around too long in the hope that the workload will improve. After all, you know how hard it is to find good employees.
There may be other times when you may have to take on projects at a lower price point to pay the overhead that you have in place. Here, you need to ask the question: "Is some work better than none?"
I also recommend getting out of the shop for an afternoon on a regular basis. Go to the woods, the beach, the lake, etc., and relax for a while. That way, you'll be better prepared to embrace those changes that will continue to come at you every single day.