The sixth-annual Top Shops benchmarking survey is now live. Participate to see how your shop compares with others while identifying potential areas of improvement in 2016.
Article From: 1/1/2016 Modern Machine Shop, Derek Korn,
Historically, benchmarking data has been difficult for machine shops to come by, especially those shops that are small or medium-sized. This is the prime reason why we introduced our “Top Shops” benchmarking survey in 2011. Our annual survey aims to identify optimal shopfloor practices and performance levels, as well as operational and business metrics that define world-class competitiveness in discrete parts manufacturing. That way, you can see how your shop compares to the best in the business.
The 2016 survey edition, our sixth, will remain open through the end of February. As with previous editions, it is divided into four primary sections: machining equipment, shopfloor practices, business strategies and human resource practices. We do not ask for specific financial figures such as gross sales or net income. Instead, we ask you to supply financial measures as percentages, including net income per gross sales, annual sales growth rate and capital equipment expenditure per gross sales. Our thought is that this will encourage greater participation from shops that aren’t inclined (or allowed) to provide specific financial data. Nonetheless, all survey responses will remain confidential.
The survey can be completed online, or by printing and filling out the questionnaire, and then faxing or mailing it to us. In fact, I’d suggest first printing the survey before entering your information online so you can see all the questions that you will be prompted to answer. A PDF file of the survey can be downloaded from the survey website.
After the survey closes, we’ll generate and provide a series of free data reports only to those who participated. These reports will separate the survey data into categories including type of machining business (job shop, contract shop or captive operation), number of employees and number of parts produced. In addition, we’ll create an Executive Summary that will compare responses between the Top Shops benchmarking group we establish and the rest of the survey participants. This benchmarking group represents the top 20 percent of machine shops, determined by totaling the points assigned to select business- and technology-related questions. These reports not only serve as a baseline “report card” of sorts, but also provide hard data that will eliminate the need to rely on gut feelings as a method of identifying and prioritizing improvement efforts.
Participants also have the chance to have their shop profiled in our magazine and online if it is chosen as an Honors Program winner for 2016. The Honors Program highlights successful participating companies in each of the survey’s four aforementioned sections, identified by responses to select questions and follow-up interviews by me. Those shops will be profiled in an upcoming issue of Modern Machine Shop and online. If you’d like to be considered for the Honors Program, I ask that you provide as much detail as possible in the survey to give your company its best shot at winning the award.
In addition, to celebrate the survey’s fifth edition last year, we provided 2015 Honors Program winners (and all past winners) with a prize package to show our appreciation for participating. We’ll continue to do that moving forward. The package includes a large Top Shops banner that can be displayed in their shop (like the ones shown in the photos in this article), T-shirts, toolbox magnets and so on. We’ll also provide a press release template that they can modify and send to various press outlets to get the word out about their award.
I try to stay in touch with past Honors Program winners as best I can. In fact, I recently asked some to comment about past survey results they found interesting or surprising, how they’ve applied what they’ve learned from the results, etc. Here is some of the feedback I received (and I’m paraphrasing these folks here):
Doug Wetzel, vice president of Protomatic (Dexter, Michigan), says his shop analyzes the survey data and compares that to its own specific data. Even though most companies know their weaknesses, and likely have a plan in place to address those, the survey helps support a shop’s vision and confirms business direction, he says.
Matthew Wardle, president of JD Machine (Ogden, Utah), says some of the survey information he and his management team closely review include profit margin, sales per employee, spindle utilization and the lean manufacturing practices leading shops apply. But he also notes that being an Honors Program winner in 2013 led to his shop winning a new customer. Representatives from an aerospace company who read about JD Machine’s award eventually awarded the shop a multi-year contract. In fact, the contract spurred the shop to add capacity with a high-torque VMC to machine some of the program’s challenging titanium components.
Brad Bohnet, project manager at Applied Engineering (Yankton, South Dakota), says he was amazed that one-third of all shops surveyed in 2015 do not have a carbide recycling program. His shop does. In fact, Applied Engineering saved its recycled carbide for approximately three years and sold when it was priced at $13 per pound. It used that “free” money to purchase a tool heat-shrink device and balancer.
Frank Burch, vice president of Southern Machine Works (Duncan, Oklahoma), finds it interesting that more shops don’t have five-axis-machining capability. His shop has purchased two five-axis machines in the past year and has had success with them. Even though Southern Machine Works often doesn’t perform full-five-axis machining, 3 + 2 positioning is extremely helpful in reducing setups, he says.
Finally, Art Santana, machine shop operations manager for Hoyt USA (Salt Lake City, Utah), reminds people that although a fine piece of equipment purchased 20 years ago still functions fine, it will never beat modern technology. “Replace often,” he says. Survey data supports this notion, because the median age of a machine tool in Top Shops is less than those used by other shops (7 years versus 9 years, per the 2015 survey).
Don’t Forget to Join the Group
Our Top Shops Zone at mmsonline.com/topshops includes numerous articles detailing key findings from past surveys. You can also learn more about our Top Shops LinkedIn group, which now has nearly 1,900 members. This group is for decision-makers in North American machining facilities, including shop owners, managers, engineers, programmers and other senior personnel. We currently are limiting the group to only these people because we believe this exclusivity is part of what makes this group different and helpful. Feel free to email me at firstname.lastname@example.org if you’d like to join the group or have any questions about the 2016 Top Shops benchmarking survey.