Blog

Apr
2017

 Jan Schafer has only stepped foot in a few electroplating shops, but she knows a lot about how the most efficient and profitables ones operate. Schafer is the market research manager for Gardner Business Intelligence, a division of Gardner Business Media, the parent company of Products Finishing. She’s been poring over stacks of data from hundreds of plating shops in North America that took part in the Products Finishing Top Shops Benchmarking Survey in late 2016. Each year, Schafer uses data from shops to compute scores and run algorithms that determine which shops place in the top echelon of the plating industry, and thus earn status as a Products Finishing Top Shop. Schafer’s team also tabulates the data to provide a comprehensive benchmarking report given back to participating shops to examine and use in their own operations to improve efficiencies and reduce waste. This year, Schafer is looking at trends, a first-time analysis opportunity now that the program has been in place for three years. Looking at the different measures across years, she’s seeing a fair amount of consistency in how the values move over time, but is calling out some “departures” as well. “Sales growth rates, for example, decline year-to-year with the exception of shops in the top 20 percent on this measure,” she says. “Sales growth rates at the top of the range stabilize in 2017, while the average sales growth among total shops continues to decline. In fact, sales growth rates among shops at the bottom of the range have fallen to zero.” Another observation is that, as a whole, shops are increasing their capital expenditures each year, with shops ranking at the top on this measure spending at an average rate of 10 percent of gross sales. That rate of spending is up almost 2 percentage points from a year ago, and up almost 4 points from the year before. For perspective, average spending on capital equipment among all shops is just half that rate. Schafer offers a snapshot of what trends she sees in the 2017 report, which takes into account business activities in 2016. Across the board: Profit is trending up Investment rate is trending up Quality is steady Lead time is steady Focusing on shops with values in the top 20 percent on the respective measures: Sales growth rate is about the same versus a year ago, defying the otherwise pervasive downward trend. Profits increase to a marginally greater degree versus shops landing at the other extreme, the bottom 20 percent. Lead time is back on track following a downward blip the previous year. Some contrasts: Shops ranking at the top on sales growth rates are widening the gaps versus median and bottom ranked shops over time. The same can’t be said for shops ranking tops on profit. On that measure, median-ranked shops are increasing profits over time to a greater degree. Shops that completed the Products Finishing Top Shops Benchmarking Survey will soon receive a series of reports that separate the survey data into categories, including type of finishing business (job shop, contract shop or captive operation), number of employees and number of parts produced. In addition, we send an Executive Summary comparing responses between the Top Shops benchmarking group and the rest of the survey participants. This benchmarking group represents the top percentage of electroplating shops determined by totaling the points assigned to select business- and technology-related questions. These reports not only serve as a baseline “report card” of sorts, but also provide hard data that will eliminate the need to rely on gut feelings as a method of identifying and prioritizing improvement efforts. The survey for liquid and powder coating shops starts May 1.

Article by Tim Pennington, Editor, Products Finishing Magazine 4/1/2017 PFonline

 Shared April 17th, 2017

 Here's our 2017 Top Shops list of electroplaters: