How To Monitor Your Business And Keep It Safe: Production Efficiency and Marketing
Managing and monitoring a business is always a difficult task, from market influences to staffing issues, keeping one’s business on track to succeed and grow is a true balancing act.
Sometimes, however, despite best efforts, things don’t go to plan and the balance tips towards uncertainty for the business. It is essential therefore for early warning signs to be recognised and acted upon.
Usually business owners, especially those that maintain close links to good quality external advisers, will spot the symptoms themselves and take early corrective action. It only becomes a problem when any issues are not noticed or, even worse, ignored and that symptom turns into a potentially fatal illness for the business.
We will be highlighting the triggers to watch out for in a series of news items to be published over the coming months.
In the latest in the series of ‘ How to monitor your business and keep it safe’ we examine the importance of Production Efficiency and Marketing.
A company becomes at risk if its’ output per unit of time or cost is significantly lower than that of its competitors.
The indicators of inefficient production are: –
- Old fashioned or poor-quality plant and machinery
- Untidy, disorganised production areas
- Idle time waiting for materials or orders
- Poor material flow through work areas
- Quality and training of employees is low
- Production bottlenecks
- High stock levels
- High proportion of orders in arrears
- High levels of waste
- Slow moving or obsolete stock
- High levels of rectification work and warranty repairs
- Components or material shortages
- Manual operations where competitors are mechanised
If the company decides not to carry out any market research, or does it badly the two main effects are:-
- The company’s’ strategic planning will be out of step with the realities
of the market
- The company becomes out of touch with its customers and will lose sales
The warning signs are:
- Inadequate level of marketing effort for the nature of the price of the product in relation to the market size and competition
- Inadequate finance to sustain the required level of marketing for the product market
These failures are most likely to occur when a small company tries to enter a market dominated by large established businesses. It may be possible to make the product without a huge investment but completely misread the level of spending needed to get sales up to the required level.
For example, a company wanting to set up a chain of fast food outlets could, relatively easily, finance the purchase, fitting and staffing of the premises. However, even if offering a near identical product to large fast food outlets it would find it very difficult to get the same turnover per outlet than they get. Their success largely results from a long and expensive process of image building.
If you have been affected by or wish to discuss any of the issues raised by this article please contact John White on 01914112468 or at firstname.lastname@example.org