Top Shops Executive Summary


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Executive Summary Top SHopS ALL SHopS oTHer SHopS he most effective way to measure your shop's performance is to compare its key metrics with those achieved by the upper echelon of similar businesses. Modern Machine Shop magazine's "Top Shops" benchmarking survey enables you to do that by examining optimal shopfoor practices as well as operational and business approaches that defne world-class competitiveness in discrete parts manufacturing. T • Machining Technology—A higher percentage of Top Shops have horizontal machining centers (HMC). Although costlier than a vertical machining center (VMC), an HMC offers the potential to achieve the productivity of two or more VMCs. Top Shops also leverage advanced cutting tools for improved production and cutter life as well as quick-change workholding devices for faster setups. 2013 marks the third edition of our Top Shops survey. The comprehensive survey was made available to North American job shops, contract shops and captive organizations early this year. The survey presented questions grouped into categories including machining technology, shopfoor practices, business strategy and human resources. More than 450 shop principals participated in the survey. For doing so, we provided them with reports that compared survey responses based on the type of shop (job, contract or captive), number of employees and number of parts produced last year. • Shopfoor Practices—Top Shops place greater emphasis not only on developing effective processes around advanced machining equipment, but also continuously improving upon those processes. In addition, they do a better job of providing employees with the needed tools in the correct location. In addition, a Top Shops benchmarking group was established after compiling the survey data. This benchmarking group represents the top 20 percent of machining businesses—a group that is determined by totaling the points assigned to select survey questions. This Executive Summary compares responses from that elite benchmarking group with the other shops that participated in the survey. Survey data was processed by Steve Kline, Jr., director of market intelligence for Gardner Business Media (the publisher of Modern Machine Shop). A number of the fnancial insights included in this Executive Summary were culled from his survey data analysis. Results from this year's survey affrm that shops considered to be best-in-class realize both better manufacturing and fnancial performance than others. Consider these snippets from the survey sections that follow: • Business Strategies—A comparison of capital equipment spending per annual gross sales reveals that Top Shops spend much more of their revenue on capital equipment than other shops. The data is similar to previous surveys, demonstrating that Top Shops continually make signifcantly larger investments in the latest machine tool technology. Many also strive to provide more to their customers than just accurately machined parts, such as assembly, inventory management and design for manufacturability. • Human Resources—Hourly wages for shopfoor personnel do not differ much between shops, but Top Shops use a wider variety of human-resource efforts to attract and retain good employees. This includes bonus plans, review/raise programs and teambuilding exercises. They're also more apt to have formal training programs. As you review the information in this Executive Summary, consider which practices the Top Shops are leveraging that might be appropriate to implement in your operation. Additional information about this year's benchmarking survey can be found in our magazine's online Top Shops Zone at Derek korn Senior Editor Modern Machine Shop 2 2013 TOP SHOPS EXECUTIVE SUMMARY

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