It’s A Tough Market
By Dave Wooldridge
Is this a tough market to do business in? You bet it is. Will business ever be what it once was when small block Chevy engines fit into almost every GM car, and machine shops had an abundance of both work and customers? Not likely.
Will the quality of engines continue to improve, lengthening the lifespan of a motor before it needs major machine work or "refreshening," as some engine builders tell me is the case, with more late model motors rebuilt with standard size parts? No doubt about it.
Is competition from production engine rebuilders, retailers, wholesalers selling direct, and aftermarket OEM reman programs going to increase over the coming years? Yes.
Is every machine shop owner singing the blues? Not hardly! In fact, recently I have spoken with many shop owners who say they have evolved with the market; they are doing quite well.
What have these shop owners done? What does evolving with the market mean? In short, it means recognizing what businesses you can serve and what products and services you must offer to be profitable enough to continue to invest in employees and equipment necessary to build today’s and tomorrow’s engines – whatever markets they may be found in.
There’s a common thread running through the thinking of these successful and profitable shop owners. They include the following:
•You have to make a meaningful connection with your customers;
•You have to know what business you are in, what services and products need to be provided;
•You must deliver the most value while consuming the fewest resources;
•You must differentiate value from waste. Eliminate everything that adds no value to your products or services;
•Collect the right data, e.g., customer volume, frequency of orders, variation in products, your time and costs to meet customer expectations. What gets measured gets done, and continuously improved; and
•You get more of the behavior and thinking that you reward!