Slitter rewinder : Chapter 29
How to increase net profit margins:Companies spend millions of dollars on advertising, to try to increase market share. The small converting plants can not afford to spend that kind of money on advertising. Having stated the obvious , let's look at different ways a small company can increase its' bottom line.
As I mentioned in my last post, a slight increase in production has a dramatic effect on the net profit figures. It is incumbent upon the owner to dedicate all the resourses he has on increasing production. The first place to start is by breaking down the production figures for each piece of equipment in the plant. As an example let's say Slitter no.1 produces 100 rolls per shift. This should be broken down to rolls produced per hour. Exact operating expense should also be calculated and broken down to cost of operation per hour basis. This has to be done for each and every piece of production equipment in the plant. Once these figures are calculated, it is simple
to arrive at "profit per hour" per unit.
Important:
If a machine sits idle, it is not making any profit for the plant. However, this should not become an obsession. There will be times that certain machines will not be in operation for one reason or another. The machine operators should be trained to run several different machines in the plant. In fact the best operators should be able to operate every converting machine on the floor. If your plant has "specialized operators" each dedicated to one machine only, then you could be headed for trouble. As a matter of fact you will pay dearly for this mistake.
Primma Donnas:
Every small converting plant has a few machine operators that suffer from this "primma donna" syndrome. Mostly, these are older guys who have been running the same antique winder for 20 years, plus. It is my experience that you can not change these "fixated" personalities.
Old farmers suffer from this malady as well. They will fuss and tend to an antique 1945 Ford tractor. They are in love with this tractor. It is their baby. It doesn't matter to the farmer that it takes him 2 weeks to till a field. This same field could be tilled in 4 hours using newer equipment. What's the rush?
This attitude and mindset is fine if you are the owner of the plant. However , if you are working for someone else, then this attitude will sink the whole company.
Resistance to change is the biggest stumbling block to innovation. To increase production this issue has to be addressed.
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