The ‘profit per unit’ analysis most manufacturers focus on does not address the speed of profits whatsoever. This is why having a profitability analysis that uses time-based analytics gets manufacturers and investors on the same page.
To chart the best path to reach your profit goal on time, you first need to understand the true return on assets of each item you make. The flaw in traditional manufacturing analytics is that it doesn’t provide a true picture of production cost per unit. Without precisely factoring in production time, you cannot accurately calculate total manufacturing costs.
At far too many of the manufacturing companies we’ve encountered, Sales and Production are at odds, if not at each other’s throats. Blame and resentment between those who make products and those who sell them is often at a slow boil, weakening the organization and eating into the bottom line.