Do these 3 things to keep your company from becoming obsolete

How not to become obsolete
Image provided by Getty Images (worac)

Numerous longtime manufacturing companies have died. Whether it’s because they failed to read the tea leaves that said their products were becoming obsolete, or because they simply couldn’t keep pace with the growing requirements of the market, they and their multiyear histories are just that — history.

Those that remain and those being born now seem to understand that standing pat isn’t good enough. Improving performance with the market is a requirement, but so is driving performance that maintains healthy profit margins as price pressures grow.

But the speed with which improvement must be made isn’t as universally understood as it needs to be, and more carcasses will dot the landscape as a result.

As Simon and Garfunkel once told us, “You know the nearer your destination, the more you’re slip slidin’ away.”

If you believe that 95 percent on-time delivery is a reasonable goal, or continue to think of AQL (Acceptable Quality Level) in defining quality, your business is slip slidin’ away.

So how do you ensure Paul and Art weren’t referring to your organization?

1. Benchmark

  • Attend industry conferences where speakers and attendees include people whose performance you admire. If you don’t know whose performance you admire, do some research.
  • Benchmark against yourself. What is your rate of improvement on all key metrics? Are you gaining or losing ground?
  • As Amazon is working on same-day delivery, the expectations of your market are skyrocketing. Benchmark against the best, not just others in your industry or geography.
  • With the information you have gained, set expectations that, if met, keep you ahead of the pack.
  • Not sure how or where to begin your benchmark efforts? Start by reviewing applications for awards in your industry, and reach out to prior winners of those awards for their insights. In manufacturing, a couple of popular awards are the IndustryWeek Best Plants award and the Association for Manufacturing Excellence (AME) Manufacturing Excellence Award. The Malcolm Baldrige Performance Excellence Program is another, less manufacturing-specific, application to review.
  • A problem is defined as a gap between what should be happening and what is happening. If the award applications seem out of your range, you have begun to size the gap.

2. Innovate

Yes, this word is almost a buzzword now, but that doesn’t make it any less critical to your ongoing success. If you are not finding creative ways to serve your markets, your employees and investors, you’re just like everyone else. That’s not the way to thrive.

Innovate products and services, certainly, but also innovate your business processes. These are what cost you money, slow you down, and dismay customers, suppliers and employees.

If you are bringing up the rear of the improvement parade, start by copying what others have done.

  • Can’t close the books each month in less than five days? Get serious. Many companies close them in less than one day. Figure out what is causing the congestion and eliminate it.
  • Don’t know performance on a daily basis? See above. The better organizations have hourly Key Performance Indicators (KPIs).

3. Problem solve

  • You can’t solve problems you don’t see. Make critical information timely and visual so that everyone can see the challenges. Peyton Manning is just another quarterback if he can’t see down and distance, play clocks, and the score.
  • Not all problems are worth solving. Some are the key to your future. Learn the difference and prioritize the focus of key resources.

We’ve all heard the joke about not having to be faster than the bear, just faster than the other guy with you. But what happens after the bear gets him? A shortsighted goal only works a short while. Don’t let the pace of your company’s improvement trick you into “…the nearer your destination, the more you’re slip slidin’ away.”