Top Shops Executive Summary


Issue link:

Contents of this Issue


Page 3 of 27

Executive Summary TOP SHOPS L ast year, Modern Machine Shop launched "Top Shops," a benchmarking survey enabling machine shops to compare their key performance indicators with industry peers. This year's edition saw greater participation from shops wanting to see how they measure up against others in the business of machining discrete parts. A comprehensive online survey open to U.S. job shops, contract shops and captive organizations was conducted early this year. The survey presented questions grouped in the following catego- ries: machining technology, shopfloor practices, business strategy, and human resources/employees. More than 500 shops complet- ed at least a portion of this year's survey. For analysis purposes, data was considered from only the 357 shops that answered at least one of the questions used in calculations to establish a Top Shops benchmarking group. 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 financial insights included in this Executive Summary were culled from his analysis of survey data. Results from this year's survey affirm that shops considered to be best-in-class realize both better manufacturing and financial per- formance than others. Here are a few attributes that enable them to realize higher overall performance: t 5IF 5PQ 4IPQT BSF NPSF BQU UIBO MPXFS QFSGPSNJOH PQFSBUJPOT to embrace advanced machines and tooling even though the initial cost might be higher. They also tend to spend more con- sistently on capital equipment and tooling as they invest in the continued success of their business. DEREK KORN Senior Editor Modern Machine Shop OTHER SHOPS ALL SHOPS t 5IF 5PQ 4IPQT BDIJFWF IJHIFS TQJOEMF VUJMJ[BUJPO BOE GBTUFS setup times because they put a good deal of thought into opti- mizing shopfloor processes and practices. These shops are also more likely to implement continuous improvement strategies to become more effective as well as lean manufacturing concepts to become more efficient. t 5IF 5PQ 4IPQT QBZ TIPQnPPS FNQMPZFFT TMJHIUMZ MFTT UIBO the other shops, but they are more likely to offer paid medical benefits, bonuses and profit- or revenue-sharing plans. As a percentage of gross sales, the Top Shops still spend less than the other shops on total employee costs, but are better at leveraging the skills of their employees to generate greater revenue. Not surprisingly, the average gross sales for the Top Shops in 2011 were 14 percent higher than the other shops. Plus, the Top Shops' median growth in gross sales from 2009 to 2011 was nearly 42 percent, compared to just 24 percent for the other surveyed shops. t 5IF 5PQ 4IPQT EP B CFUUFS KPC BU UVSOJOH SFWFOVF JOUP QSPmU Their median net income margin was nearly 13 percent last year, compared to just under 6 percent for the other shops. Effective use of various marketing techniques may speak to why the Top Shops have a higher quote-to-book ratio than other shops, too. The following pages focus on these and other noteworthy survey findings. To access more information about this year's benchmarking survey, visit the Top Shops Zone at 2 2012 TOP SHOPS EXECUTIVE SUMMARY

Articles in this issue

Links on this page

Archives of this issue

view archives of Top Shops Executive Summary - 2012