A good topic.
As a smaller shop over the years I found that you should try to bid the same way every time. Setup time, tooling cost, material cost, machining time, QC time, paperwork and shipping cost. Then use a
factor to adjust your bids. If you calculate jobs at $75/hr and don't make a profit or are not getting the work, first look at you expenses, if they are covered then you are just bidding your time wrong. How to fix that? Don't. Just multiply by a correction factor easing it up or down until you do make profit or get the work. If after doing so, your work or profit is dropping off… then is the time to learn how to do things faster or find what is missing in your shop to give you that edge. I could be could be your shops work ethic. The employees and yours!
Here is an example were the ethic of myself and my employees was lacking.
Years back I wanted to cut back and not work so hard so I had to look for ways to LEAN out my company. I did three things, I had five employees. Three where really good workers, one was so,so and the last guy was being carried by everyone else and sucked. I laid that guy off thinking he was the drag on the profits and I was running things fine. I had a meeting with everyone else the next day and said that I was tired of working 24/7 and going to only put 10hr days, 5 days a week from now on and they needed to help me do so because if we started to lose work or couldn't finish our work on time I might decide to do something more drastic. That same day I individually told the top three guys we were not a sinking ship, but I wanted to have a life outside the shop. I also told each of them I was proud of their work and that they were the best employee that an owner could ask for. Further, I gave those three each one quarter of the money I was paying the guy I let go, as a raise. I said that we had to look for ways to crank it up by improving how we do things during our nomal hours and I wanted their input as to how to do it.
BTY - All three made the comment that I did the right thing by thing getting rid of the non-producer and that they had for a time, been getting tired of carrying him. It dawned on me I was too soft, and was letting them down by keeping that guy! It was my fault, I realized, even if they didn’t come out and say so.
The so,so Worker… I told him that he needed to learn how to work better and that I and the other three who worked for me were going to help him to learn how to do so and, if we, as a group, were unable to get him up to speed in a month, I would have to let him go. He got the point, worked hard changed how he did things, asked and took advice and became a good worker. I even felt justified in giving him a raise 3 months later.
The second thing we did was move to a less expensive building, the image it gave, as good as it was, did not justify the overhead and was eating directly into the profit margin. That move, including the down time and expense of it, was paid off in about 5 months in the amount it saved.
The last thing we did was have biweekly 3/4 hr (maximum!! No matter what no side tracks!!)meetings to come up with ideas as to how to improve work flow and fix the bottlenecks. Each employee was required to come up with one topic. I was required to come up with two. At first it was hard for all of us to come up with and write a suggestion or topics, but after a time it got easier because the topics were about progress or lack thereof on ideas we were trying to put in force. Some of the things that came out of these meetings was the purchase of another CNC mill, and over a period of a year, accumulating more vises and tooling to speed setups. We also developed a setup worksheet and traveler system.
The end result was I learned how to better run a business, and my employees learned how to talk to me and each other in a productive way and be the person always in demand. We also increased our production capacity, profit, and improved the existing employee's benefits and pay.
Profit is king in a business...the challenge is how you go about making that profit. I'm still learning that all the time.
Steve