Read the Transcription
Hi I’m Bruce Hendrick, President and CEO of RBB. Thanks for joining me today as we talk about how to make more money with small batch custom electronics. Before I reveal our secrets, I want to talk a little bit about why people are buying in small batches already and why that's happening more and more these days.
When we buy in small batches, that means less cash is tied-up in slow or non-moving inventory, which is really important. Small batches provide the ability to update or change our designs more easily. Small batches allow us to extend the lifespan of products out in the field that are not going to be upgraded. By synchronizing your production with small batch arrival of finished product, there's a lot less inventory underfoot allowing you to be more efficient on your shelf floor. For products that don't have a forecast and it's very difficult to understand what you're going to need. By only ordering in small batches you’re able to take exactly what you need and still get them quickly. Finally, by ordering in small batches we greatly reduce the risk of a large-scale quality problem. So now you’ve decided to order your products in small batches, the question becomes how do we get there with the greatest profitability? It comes down to four major categories.
One: create a specialized business internally or partner with someone like RBB that does nothing but small batches. When a business tells you that they are running both small and large batches over the same equipment understand that both are running at higher costs than they should.
Two: Optimize your manufacturing operation as a complete work cell. See we’ve tried lean here for unique products and it didn't work. And the reason it didn't work is because we didn't build them very often. What you really want to do if you're building a wide variety of small batch assemblies is to optimize the entire shop in one work cell so you can get as many small batches through the shop all at once.
Three: Relentlessly reduce product change-over time. Rarely in a small batch operation does the speed of the equipment determine how fast or cost effectively you are going to get your product. Instead it is how fast you can change over the product in these ever changing batches that will allow you to get an optimized operation.
Four: Get really good at pulling new assemblies quickly into your operation. In RBB's case we bring in over 4 new assemblies every week and by doing so we’ve learned disciplines that we could have learned in no other way.
I realize that this video has only scratching the surface as we explore making more money in small batches. If I can be of further assistance please contact me directly. Thanks, and have a great day.