They both do physical machinery manufacturing, but the development of the two types of bosses is completely different.
One type of boss stays in the workshop for more than 12 hours a day, all year round, but the revenue is stuck at around 50 million yuan all year round; the other type of boss implements the six major reconstruction systems of cognition, strategy, model, organization, culture, and capability, has a regular work and rest schedule, can go out for inspections in leisure time, and the revenue has steadily exceeded 100 million yuan.
The gap does not lie in resources and customer sources. The core lies in whether the independent operation system has been restructured according to growth.
The vast majority of manufacturing bosses are trapped in the three ineffective internal friction traps, and their hard work leads to stagnant growth.
1. Three ineffective weaknesses that bring down physical manufacturing
Trap 1: Cognitive solidification and strategic laziness
Adhere to the mindset of the early years of making goods, focus on production and running orders, have no track planning, accept all orders, cannot distinguish between high and low gross profit products, are deeply involved in low prices, and shout to increase revenue every year but have no way to achieve success.
Trap 2: Emphasis on results over process, old model
Only focusing on the end-of-month financial statements, squeezing overtime work in the workshop and deducting commissions for losses, and not knowing how to optimize the profit model; making money by selling parts in one go, without a repurchase service system, and profits are constantly eroded by production losses and after-sales costs.
Trap 3: The organization is governed by people, and the boss becomes the only engine
Purchasing pricing, production orders, and customer quotations are all decided by the boss. Employees have to work with mentality, problems and other instructions. When the boss leaves the job, the factory runs in chaos, and the development of the company is blocked by personal energy.
2. Relying on six major reconstructions to build a full-link operation closed loop
1. Cognitive reconstruction｜Break the inherent business thinking
Breaking out of the old path of “just make a single order”, the boss changed from a business-oriented to a strategic operator, jumped out of the cost involution thinking, clearly saw the dividends of the subdivided engineering supporting track, and set a long-term development direction focusing on high-end precision processing.
2. Strategic restructuring | Locking in the precise profit track
Cut off the messy low-priced general spare parts and focus on precision supporting processing of engineering machinery; abandon scattered small trading retail investors and deepen the development of engineering equipment manufacturing enterprises; rely on unique processing technology to create differentiation and get rid of price competition.
3. Model reconstruction | Upgrade profit structure
Abandon the one-time sale of a single product, create a product chain of “equipment accessories + annual maintenance + customized technical modifications”, broaden the profit entrance, use continuous services to increase customer lifetime value, and get rid of relying on single product price reduction to grab orders.
4. Organizational restructuring｜Split units and implement division of labor
Break the rule of man model in which one person coordinates the entire process, divide sales, production, and technology into independent small units. Each unit is independently accounted for and implements a commission + profit sharing mechanism. There is no need to go to the boss for approval for everything.
5. Cultural Reconstruction | Change of Work Mentality
Establish a results-oriented corporate culture, from dawdling and working hours to one that targets production capacity and profit. Employees actively optimize processes to reduce losses and proactively follow up with customers to increase repurchases.
6. Capacity Reconstruction | Building Implementation Closed-Loop Capabilities
The goal is no longer simply divided by 12, but reversely breaks down the new customer, repurchase, and conversion rate indicators from annual revenue to daily samples, docking, and production scheduling; establishes daily morning meetings, weekly review, and monthly optimization mechanisms, controls the process in real time, and rectifies problems in a timely manner.
3. Examples of Machinery Manufacturing Implementation in Zibo, Shandong
The original owner of this supporting machinery factory lived and ate in the factory, and was on duty 14 hours a day on average. The annual revenue was 52 million, low-priced orders accounted for more than 60%, and the employee turnover rate was 33%.
Follow the six major reconstructions and implement them step by step:
- Cognitive upgrade, break the inherent thinking of low price and volume;
- Strategic focus, cut off low-margin common parts, specialize in engineering precision processing;
- Reconstruct the profit model, add maintenance contract business;
- Organize into units, implement dividend incentives;
- Reshape the striving corporate culture;
- Build target disassembly +
Daily review of the management and control system.
Nineteen months later, revenue rose to 128 million, employee turnover dropped to 7%, the boss went out for research for 8 consecutive days for the first time, and the factory produced independently and took orders normally.
4. 4 Questions for Enterprise Self-examination
- Still using the old ideas to take orders without strategic focus?
- Profit only depends on selling products, without a diversified model?
- Waiting for the boss’s decision on everything, but the organization does not have the ability to operate independently?
- There is no regular review and you only have to wait until the end of the month to calculate losses?
Corresponding to the shortcomings, just fill in the six major reconstructions one by one.
Conclusion
The core of the boss is not to focus on the workshop and work overtime. Relying on the reconstruction of the six major systems of cognition, strategy, model, organization, culture, and capabilities, an independent operation system is established. Manufacturing companies can easily bid farewell to fire-fighting management and achieve steady revenue growth.
