Lost opportunity is something that every business owner must wrestle with from time to time. As a business owner, you know how to handle your fixed costs such as rent and equipment and even some variable expenses such as payroll, utilities, materials, and the like. What many business owners are not prepared to handle is lost opportunity costs. These can be harder to plan for and are difficult to measure, but they are real expenses that you will have to contend with.
What is a Lost Opportunity?
Lost opportunities can come in many forms depending on the business. Generally, in manufacturing these losses come when a factory, production facility, energy company, or the like experiences equipment breakdown that cannot be immediately remedied. Manufacturing lost opportunities can be caused by lengthy part sourcing problems that delay getting machinery back up and running again.
The issue in the manufacturing industry is that there is often a lag time in the delivery of OEM parts. They can be difficult to source for older machine components and when a dealer is found, the parts can take weeks to arrive.
When the machinery is down this leads to lost opportunity. Every minute that the machinery is not running is opportunity slipping by in many ways including:
- Products are not being made
- Orders cannot be filled
- Revenue is lost
- Future revenue is impacted
- Inventory is impacted
- Payroll is unbalanced
- Layoffs may occur
- Morale is negatively impacts
As you can see, a lost opportunity in manufacturing is monumental. While you can’t prevent all lost opportunities, businesses should make moves to help prevent them, or at least limit downtime in the future. Taking preventative steps now will benefit them later.
Why Correcting a Lost Opportunity is Important
Lost opportunity happens, even to the most well-regimented companies. The important thing is for a business to learn from the loss so it can be avoided in the future, saving the business valuable time and money. This can be done by understanding what caused the loss and then looking ahead and seeing what can be done to avoid the same issues in the future.
Taking steps to avoid the lost opportunity in the future will require the business to look at what happened. Simple questions can be asked to help identify where the breakdown occurred:
- What caused the lost opportunity?
- Was there something that could have been done to prevent the loss?
- Would regular maintenance or inventory help avoid this problem?
- If parts sourcing delay was the issue, is there a more reliable or timely source?
Asking these questions will help to determine where things went wrong. In investigating this and finding the answers, more training or preventative measures can be put in place to help eliminate the chance of experiencing the same lost opportunity in the future.
Avoiding Future Lost Opportunity
Avoiding all lost opportunities is difficult, but as a business, you can enact change to help avoid the same types of losses, such as downtime due to machine part failure. After an investigation has occurred and the source of the loss has been found, you can work to avoid it again the in future.
The first goal should be to find a source for parts that will provide the necessary parts promptly. Facility downtime should never be the rule, it should always be the exception. When you have machine failure, and you will, knowing you have a parts dealer who can get you exactly what you need as fast as possible will help to avoid losses.
Next, you need to ensure that you have a maintenance schedule that will ensure that all parts are being cleaned and inspected on a routine basis. Knowing that the machines are cared for regularly can help to find parts that are fatigued and will require replacement soon. This will allow for as little downtime as possible as the part can be on hand before breakdown occurs.
Finally, ensure that all employees know that failure to report issues with the machinery or do regular inspections can impact them personally. Downtime can mean temporary layoffs and reduced moral. Driving home the point that every employee needs to do their part to maintain equipment will benefit the business and help avoid future losses.
ROC Carbon Can Help You Avoid Losses
If your manufacturing business has been suffering continued losses because you are waiting for OEM parts, ROC Carbon can help! Our custom carbon graphite parts can be made to your exact specifications, with an emphasis on quality and fast delivery. We will even get you a quote within two hours of your parts request, provided we have all your service requirements!