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What follows is the first of three articles we will be running on ISO 9000 and what it means for the gear industry. This first article will cover what ISO 9000 is, what some of its benefits - and problems - are, and whether your company should be a candidate for this certification process. In our next issue, we will consider the important question of how, when, and if to hire an ISO 9000 consultant. The final article in this series will discuss ways to save money while streamlining the certification process in your company.
What can be done about the rising cost of labor? Mr. Robert Reich, U.S. Secretary of Labor, has already indicated the administration's intention of pushing the minimum wage from $4.25 to $4.50 per hour and indexing it for inflation. That means that every jiggle in the inflation chart will push the minimum wage higher.
Putting one's best foot forward is important for successful business communication. And successful business people know the "rule" of the game, what it say and do in business situations, to make the best impression. However, these rules change from country to country, and what is appropriate behavior here may appear rude to someone from Latin America, Europe or Asia To help you become more familiar with some of the different rules of engagement in other countries, Gear Technology spoke with three businessmen who have had extensive contact in various part of the world.
The object of any business transaction, be it foreign or domestic, is making a profit. That's why you go through all the effort of making and selling your product in the first place. Getting paid in a timely manner is crucial to making profit, but when your customer is in another country, this "timely and convenient" payment can become complicated; hence, your need for a banker with expertise in international markets.
Much about ISO 9000 is the subject of noisy debate. But on one thing almost everyone, true believers and critics alike, agrees: Getting ISO 9000 certification can be expensive. Companies can expect to spend at least $35,000 for basic certification and six-month checkup fees over a three-year period. These figures do not include hidden costs like time and money spent on internal improvements required to meet ISO 9000 certification. But the really big-ticket items in the process are employee time and the cost of bringing in outside consultants. Many ISO 9000 consultants charge upwards of $1,800 a day.
The two reports referred to in this article, "The people wise Organization" and "House Divided: Views on Change from Top Management - and Their Employees," crossed our desks some weeks ago. They stimulated a fair amount of discussion here, and we hope they do the same in your offices. We welcome your responses. How do you view the corporate/competitive environment of the next few years? How do you see yourself and your company fitting in? Can these ideas work in the gear industry? Let us now what you think.
You get calls and letters every day from people wanting you to use their ad agency, their direct mail program, their p.r. or marketing firm to promote your business. It seems everyone wants you to spend your money to communicate to your prospects and customers. But what's the best method for you?
Heat treating is a critical operation in gear manufacturing. It can make or break the quality of your final product. Yet it is one that frequently gear manufacturers outsource to someone else. Then the crucial question becomes, how do you know you're getting the right heat treater? How can you guarantee your end product when you have turned over this important process to someone else?
Business ethics are like apple pie and motherhood. Few people are willing to come out agin'em. But in reablity, apple pie is full of fat and refined sugar, motherhood is not what it was when June Cleaver ran the kitchen, and business ethics? Well, it's always been easier to talk about them than to actually practice them, and things certainly haven't improved in the last few years.
One of the key questions to be answered when exporting is how you are going to get your product to your customer. All the time, effort, and money you've spent to make a sale in the first place can be wasted if the shipment is late, damaged, or lost, or if delivery becomes an expensive bureaucratic nightmare for either you or the buyer.
On of the key questions confronting any company considering ISO 9000 certification is, how much is this going to cost? The up-front fees are only the beginning. Dissect the ISO 9000 certification procedure with an eye for hidden costs, and two segments of the process will leap out - the cost of consultants and the cost of making in-house improvements for the sake of passing certification. Most of these costs can be controlled by careful selection f the right consultant in the first place.
At the next meeting of your association's marketing committee, notice what happens. The rate of taking notes increases dramatically when the market analysis and international trade trends reports begin. Even with the handouts to match the overhead projections of numbers, the audience's pace is furious. This is vital, apparently hard-to-come-by information, and no one wants to miss out. Almost all of the information comes from one source, yet the data offered is only one small dip from an enormous treasure chest - the U.S. Government.
It's every gear manufacturer's nightmare. Your company had been named as a defendant in a product liability suit - one involving serious injuries and death. You're facing endless court appearances, monumental legal fees, and, possibly, seven figure settlements our of your coffers. The very existence of your business could be on the line. The question is, how do you prevent this nightmare from becoming a painful reality.
Dictatorships can be stifling. In an autocratic organization, employees seldom participate in decisions that affect them. By establishing a collaborative environment, you allow everyone to play a role in making your organization a success.
Exporting. It's one of the hot strategies for helping boost businesses of all kinds, gear manufacturing among them. With domestic markets tight and new markets opening up overseas, exporting seems like a reasonable tactic. But while the pressure is on to sell overseas, there is equal, justifiable concern about whether the move is a good one. Horror stories abound about foreign restrictions, bureaucratic snafus, carloads of paperwork, and the complications and nuances of doing business in other languages and with other cultures.
Cost cutting. It's the aerobics of the 90s for businesses large and small. More than just the latest buzzword or 90-second flash-in-the-panacea, it's a survival technique. Companies that aren't trimming the fat now may not be around in five years to regret that they didn't.
Countless research studies confirm this fact: Companies that advertise aggressively during a recession will flourish after the economic tide turns. Regardless of company size, effective advertising generally requires the services of an agency, and under current economic conditions, you may need one now more than ever. The question is, how do you go about getting the right one for your company.
Have you ever been confronted by a thorny business problem, only to discover - belatedly - that it has been creeping up on you for months, or even years?
The whole point of a trade show is to get leads that will turn into sales. No matter how attractive your booth was, no matter how smoothly the setup and the show ran, no matter how many visitors you had at your booth, if your presence at a show didn't net you any sales, then your considerable investment of time, money, and effort has been wasted.
Organizing a successful trade show exhibit is not unlike running Operation Desert Storm. The logistics can be a nightmare; the expense, horrendous; the details, mind-boggling. About the only thing you won't have to cope with is having someone fire SCUD missiles at you.
Given the current economic and legal climate, matters of hiring and firing are cause for considerable concern among managers. In addition to all the other factors to be considered, employers must be wary of exactly how these procedures should be carried out, so that the company is not left open to lawsuits based on charges of discrimination of one kind or another. The reasons given for a particular employment decision may be as crucial to determining liability as the decision itself.
To ensure profitability and avoid losses, accurately quoting jobs is the first line of defense.
It's the New Year, and with it comes the opportunity to take a fresh look at your business objectives. Because business development is such a vital part of running a company, I'd like to present some guidelines I have found beneficial for securing new work and new customers.
What is a quality product? This is not an idle question. In the Darwinian business world in which we operate, knowing the answer to this question is key to our survival. A whole library of standards and benchmarks is available to help us gage how we're doing, but they don't really tell the whole story.
The presidents of two manufacturing companies were having a drink in the lobby before the start of their trade association's annual meeting...
A fundamental characteristic of the gear industry is that it is capital intensive. In the last decade, the gear manufacturing industry has been undergoing an intense drive toward improving and modernizing its capital equipment base. The Department of Commerce reports that annual sales of gear cutting equipment have increased nearly 60% since 1990. While this effort has paid off in increased competitiveness for the American gear industry, it is important to remember that there is another capital crucial to manufacturing success - "human capital."
At first, monitoring the energy I use at my plant or the energy for each individual machine seemed trivial. Isn't this just an overhead cost I have to pay? I'm certainly not going to turn off a machine that costs too much to run when I have to get a job out for that month. Then, I realized how much savings there was for monitoring power consumption and the ROI was timely.
In this issue's column, Joe lays out the basic truth for most manufacturing companies: If you're not moving forward, you're falling behind.
I'm sure it comes as no surprise that finding skilled people to work in your manufacturing facility is no simple task. But after finding them, and investing in the development of their abilities, what happens when one of them - an employee your company really needs - becomes a troublesome employee? This is among the trickiest situations a manager can face.
Recently I had the pleasure of having dinner with Frank Sinatra, Jr. He was here in Chicago for a benefit concert for Roosevelt University (my wife is co-chairperson of the benefit). Our conversation ranged over a wide variety of subjects, including a small gem of an HBO television movie, "Truman" with Gary Sinise in the title role.
In manufacturing, we all know that tracking statistics on your operation is essential for understanding how you're doing, as well as identifying areas for improvement. But what does the efficiency metric actually tell you?
Once upon a time there was a computer. This computer served as a conduit to waste a great deal of time through social networking and online video games. Still, there was always potential to turn these rather sedentary activities into something more positive and useful to mankind. Siemens may have stumbled upon such a concept.
Going to IMTS? Beware. It's easy to make any number of common mistakes that can turn your productive buying trip into an expensive bomb.
Bankruptcy filings have not noticeably declined despite the economic recovery of the Reagan years. Businesses continue to receive notices that their customers have filed bankruptcy. Many of them are writing off significant losses each year as a result. despite the frequent use of bankruptcy by debtors, many business owners and managers have little or no idea of the pot-bankruptcy remedies available to them.
"Competitiveness" is the newest corporate buzzword. It is being offered as the solution to all our economic problems. Newspapers, magazines and legislation are pushing us to be more "competitive."
How can a company grow its business or plan for growth when its niche area only accesses the smaller part of the pie?
It used to be that a shop with hustle and plenty of big, fast machines could thrive using a manual system. But no more. Today's economic environment requires more and more in the way of topnotch service and quick turnaround - which frequently means a completely integrated shop floor control system.
Arrow Gear Company of Downers Grove, IL, has implemented a computer system that fully integrates exchange between all of its computer applications. The ELIMS (Electronic Linkage of Information Management Systems) project has increased manufacturing productivity and reduced lead times.
Knowing the right thing to do isn't hard. Most often, it's very obvious. Actually doing it is something else again. For example, we all know that we probably eat too much refined sugar and fat, but when the double chocolate cheesecake come by, it's easy to convince ourselves that one piece won't hurt.
"Values" is one of he buzzwords we hear everywhere today. Family values. Traditional values. Alternative values. Along with a balanced budget, less government and more fiber in our diets, "values" - and their practical counterparts, "ethics" - are being promoted as one of the simple, obvious solutions to what ails us as a country and as individuals.
You're already a veteran of the computer revolution. Only you and your controller know how much money you've spent and only your spouse knows how many sleepless nights you've had in the last ten years trying to carve out a place in the brave new world of computerized gear manufacturing. PC's, CNCs, CAD, CAM, DNC, SPC, CMM: You've got a whole bowl of alphabet soup out there on the shop floor. Overall these machines have lived up to their promises. Production time is down, quality is up. You have fewer scrapped parts and better, more efficient machine usage.
Okay. You've been convinced. You've gritted your teeth and decided to spend the money to launch a company Web site. Everybody from your teenage propeller-head to the girl in the mail room and the salesman in the flashy suit who gave you "such a deal" on Web site services has promised that your site will be the best thing that's happened to your business since the advent of CNC machines.