Service
Analysis and figures
Which job pays and which one costs you money. Where the scrap comes from. What happens when the one man who knows everything is off.
- Data source
- Your figures, not industry averages
- Format
- One page with what matters, an appendix for the rest
- Purpose
- Decisions, not reports
Which job pays
The question sounds simple and is almost never answered properly in a small company.
- Job costing (Nachkalkulation)
- What was planned, what actually went in — hours, material, travel, rework. Without hours booked per job this cannot be done; that is why this work often depends on the digitalisation.
- Contribution margin (Deckungsbeitrag)
- Revenue minus the costs that only arise because of this job. What is left covers the building, the office and the profit. A job with a small contribution margin can still be the right one — but only if you know that beforehand.
- Full-cost hourly rate
- The rate many companies use covers the wage and forgets the building, the vehicles, the office, holiday and sick leave. We work it out properly once. It is regularly twenty to forty per cent above the rate the company was using.
- The point where it pays for itself
- How many jobs or hours a month are needed to cover the fixed costs. That one figure calms you in bad months and warns you in good ones.
Where the scrap comes from
There is no shortage of theories. They are rarely wrong and almost never complete.
- Count first
- A simple tally sheet at the machine, for two weeks: what, when, how often. Without that sheet every analysis that follows is guesswork.
- The eighty-twenty rule
- Usually a few causes account for most of the damage. The Pareto chart shows in one picture where to start.
- Collecting the causes
- Sorted by people, machine, material, method, environment — the Ishikawa diagram. The value lies less in the picture than in having the people from the machine in the room.
- Five times why
- Ask again after every answer. The first answer is usually a symptom, the fourth is the reason. In a metalworking company the chain ended at an instruction session that had never taken place.
- Watch instead of inspect
- If a dimension is measured as you go, you see it drifting before scrap is produced. In manufacturing this is called statistical process control; day to day it is a sheet with a chart next to the machine.
Capacity and deadlines
When the plan says it will just about fit, and it never does.
- Capacity against the order book
- How many hours are available, how many are planned in, and how many go on set-up, travel and rework. The third figure is missing from most plans.
- The bottleneck
- Every company has one place that sets the pace — a machine, a person, an approval. Improvements everywhere else bring nothing. The idea comes from the theory of constraints and is the most useful part of it.
- Lead time
- How long a job takes from arrival to invoice, compared with the working time alone. The gap is your reserve of improvement.
- On-time delivery
- The share of jobs finished on the day promised. A figure customers care about and hardly any company knows.
What the figures are worked out in
- Excel
- Lasts longer than software vendors claim. With the data prepared properly it is the right tool for most analyses of this size.
- Where Excel stops
- When several people write at the same time, when versions drift apart, when the file name says “final v3”. Then the data belongs in a database — the analysis can still stay in Excel.
- Reporting tools
- A dashboard is quick to build and is rarely the problem. The problem is the data behind it. We build it once the figures are right.
Every figure in our reports has an origin: which file, which period, which assumption. Figures without an origin are worthless when someone disputes them.
Which figure is missing when you have to decide?
Usually it exists and is only sitting in four places at once.
Phone+49 162 495 4485
E-mailarmen.hovsepyan@armosystems.de
ArmoSystems · Armen Hovsepyan · Finnentrop