Top Shops Executive Summary


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Executive Summary bUSInESS STRATEGY & PERfoRMAnCE I 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 are likely more disciplined in the type of work they go after, quoting only jobs that look to be a good match in terms of their capability and capacity. n terms of absolute spending on capital equipment, Top Shops and other shops outlay similar amounts. However, a comparison of capital equipment spending per gross sales reveals that Top Shops spend much more of their revenue on capital equipment than other shops. In 2012, this value was 10 percent (median) and 13 percent (average) for Top Shops, compared to just 2 percent and 6 percent, respectively, for other shops. The data is similar to previous surveys, demonstrating that Top Shops continually make signifcantly larger investments in the latest machine tool technology. The table below shows that many leading shops have adopted a business model in which they strive to provide more than just accurately machined parts. For example, some operations offer assembly, customer inventory management and design for manufacturability (DFM) advice. In applying DFM, shops review customer designs and suggest modifcations that would simplify manufacturing while lowering costs. Top Shops' investment in advanced equipment and focus on establishing processes to leverage that capacity is refected in their fnancial performance. Their proft margin is nearly double that of other shops. Their growth rates are signifcantly higher, too. The median growth rate for Top Shops is approximately 100 percent higher, and the average rate is 50 percent higher. Top Shops also have higher gross sales per machine at $266,123 versus $152,000 (in median values). 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 for YouTube. This has grown to more than 16 percent. Similarly, nearly 23 percent of this year's Top Shops use social media—Facebook, Twitter, LinkedIn, etc.—compared to only 11 percent in 2011. Clearly, an increasing number of leading shops are testing these waters in an effort to get their message in front of additional customers. Top Shops are more effective at quoting, too. The quote-to-book ratio is a metric tracked primarily by job shops, but it's interesting to note that the median values for Top Shops and other shops 0 10 20 30 40 50 60 48.4% Access to customer forecasts 27.6% 29.2% Certifcation of major suppliers 27.8% 29.2% 45.2% 32.3% Collaborative design with customers (DFM) 23.5% 24.2% 35.5% 10.5% 12.5% Collaborative design with suppliers Which of the following practices are used with your supply chain? 48.4% 28.1% 29.7% Customer-satisfaction surveys 38.7% 18.6% 20.2% Just-in-time deliveries from suppliers 58.1% 30.8% 32.9% Just-in-time deliveries to customers Top Shops 25.8% Sharing forecasts with suppliers 16.2% 17.0% Vendor-managed or -owned inventories 16.1% 16.8% 16.7% Other Shops All Shops 35.5% Vendor-managed or -owned inventories for customers 13.0% 14.7% 6.5% 12.7% 12.2% None of these 0 10 20 30 SPONSORED BY 40 50 AMT 60 | IMTS 13

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