"Benchmarking" is simply a comparison of your company results versus industry averages for other companies like yours. Which categories are compared are up to you. Each company desires particular information. For example, you may wish to know how you compare with others in the percentage of defects molded versus the number of acceptable parts produced. But another company may be more interested in knowing how they compare in number of sales dollars versus the number of employees on hand. Both are meaningful numbers but each company may place varying degrees of importance on them.
You must first determine the categories for which you wish to expend time and money for benchmarking. Some category suggestions for a molding facility are listed here. The industry averages mentioned are based on facilities running 24 hours a day, 5 days a week, 50 weeks a year, and are taken from survey results of the top 50 , full-service molding companies in the US, unless otherwise noted.
1 - Machine Utilization = Number of hours run to produce acceptable parts divided by number of hours available on an annual basis. Industry average is 75%.
2 - Scrap (Internal) = Number of parts scrapped divided by the number of parts produced. Industry average is 3%.
3 - Scrap (Delivered to customer) = Number of parts scrapped or returned by customer divided by the number of parts shipped. Industry average is less than 1 %.
4 - Employee To Press Ratio = Number of employees, company-wide, divided by number of molding machines on the floor. Industry average is 9.
5 - Sales Dollars Per Press = Total sales generated (includes tooling and secondary operations) divided by the number of molding machines on the floor. Industry average is $1,023,360.00, annually.
6 - Sales Dollars Per Employee = Total sales generated as above, divided by the number of employees company-wide. Industry average is $116,918.00, annually.
7 - Material Waste = Pounds of raw material "lost" to handling procedures, short shipments, and waste, divided by the number of pounds purchased. Industry average is 5%.
8 - Press Size = Range of molding machine sizes based on clamp tonnage. Average industry range is 100 tons through 1,000 tons, but the single average machine size as of this writing is 300 tons.
9 - Mold Change Time = Total number of minutes needed for a mold changeover as measured from the last acceptable part molded on the removed mold to the first acceptable series of parts molded on the set mold. Industry average is 114 minutes.
10 - Average Machine Hour Rate = Total amount of annual operating costs based on machine size, divided by the number of available hours for production on that machine. Industry average is $45 for the average 300 ton machine.
11 - Average Operator Starting Wage = Average hourly wage paid for a molding machine operator at entry level. This is widely variable depending on geographic location, ranging from minimum wage to $18.00 per hour. Industry average is $8.95.
12 - Average Operator Wage (All Levels) = Average hourly wage paid for a molding machine operator with average experience and average length of service. Industry average is $14.60.
13 - Training Hours = Number of training hours provided annually divided by the number of employees receiving the training. Industry average for full-time employees is 6-1/2 hours.
14 - Average Number Of Machines = This average is taken from surveys applying to all molding companies, not just the top 50. Industry average is 30.
15 - Total Annual Revenue = Again, this average is taken from surveys applying to all molding companies, not just the top 50. Industry average is $30,700,800.00.
16 - Return On Assets = The total annual profit margin of each molding machine investment. Industry average is 7.9%.
How do you compare?
Depending on your location and degree of automation, you could be on the small end or the large end of any of these categories. But, where should you be? It is not possible to make that determination from a single benchmark report. Benchmarking is a process that requires 3 to 5 years to really determine its impact. The more you benchmark, the more accurate and meaningful the results.
Should you benchmark?
There is one school of thought (I am included), that believes internal benchmarking is just as meaningful as benchmarking based on other companies. Internal benchmarking can be performed without divulging operating procedures and costs to other companies, and can be an eye-opening experience. To perform internal benchmarking, it is simply a function of recording and compiling information, and then comparing the results on a regular basis. But, it also entails attempts to improve existing processes and methods to reduce scrap, improve productivity and efficiency, and maximize profits. With these goals in mind, internal benchmarking can be just as productive (if not more so) as external comparisons.
Worldwide Copyrights Reserved by Douglas M. Bryce