Last week, I argued the need to make your mission more than window dressing so I wanted to talk today about how we track our organizational performance against our mission.
A quick refresher if you’re just joining us: Evaero is a small, low margin business in a highly competitive industry and we have to take a prosaic approach to our mission statement. That is, rather than acting as leavening for sentiment or good intentions, it simply serves as a succinct articulation of why our customers pay us:
To manage all aspects of delivering complex machined aerospace parts to our customers on time every time.
Consequently and quite logically, this is a pragmatic reminder to every Evaero employee of why they should care about our mission: If Evaero doesn’t get paid, neither do they.
Now, before I present to you the data, let me share a bit about our business model and the landscape in which we operate.
Evaero specializes in the CNC machining (see here for a behind the scenes look) of complex aerospace parts that are often made from long lead materials (e.g., investment castings, forgings, special metals) and require testing, inspection, special processing (e.g., painting, anodizing, heat treating, etc.), and assembly.
The majority of the components we make for our customers are managed to a forecast rather than to firm fixed POs and are sold on a just in time basis. Further, as previously discussed, because we’re in an industry that has been commoditized, our work is continually being shopped and moved around. Lastly, there is significant demand volatility in the aerospace industry due to the low volume/high mix type of products we make.
All this translates to razor thin margins, low to zero margin for error, and a highly complex and commoditized environment.
Given this background, how is Evaero doing with regard to its mission? Although we’re not perfect, by plotting data pulled straight from our ERP system for all customer deliveries, as you can see below, we’re doing OK.
Click here for an interactive plot (if you are receiving this via email).
The conundrum is that our customers also have to contend with demand volatility which means they often need products faster than what we promise with “standard lead times.” As a result, for some of our customers, we also benchmark our on-time delivery numbers against customer requested dates to get a true sense of how we’re doing through our customer’s eyes. Data are plotted below *.
Click here for an interactive plot (if you are receiving this via email).
Clearly we still have work to do, however, it should be noted that when we first started tracking and working to improve these data three years ago, our delivery numbers against customer requested dates were routinely below 50 percent.
Before checking out for the week, how about some music?
When I was a kid, I used to be a big fan of country music. Although my love for Johnny Cash and Elvis already primed me for the music, my interest in the genre was initially inspired by a crush I had on a girl named Bonnie in elementary school. Our school had a country swing dance competition and I asked Bonnie to be my partner. I left the competition with a second place ribbon (always second place – dammit) and a love for the music.
Some time after elementary school, I stopped listening to country music when it transformed into the commercially successful, too big to fail, heaping pile of shit it has become. Although there were always exceptions and the musicians and producers behind the music are amazing, it’s one of the few genres of music that for many years I went out of my way to avoid. Which is why, when I happen upon a country artist that I like I get really excited.
Sturgill Simpson is such an artist and in the theme of today’s blog I leave you with his song “The Promise,” (written by the 80’s UK band When in Rome). It’s the song I sing every time I learn that components we’ve been making and delivering without fail for a long time are thrown up on a reverse auction:
If you need a friend
Don’t look to a stranger
You know in the end, I’ll always be there
But when you’re in doubt
And when you’re in danger
Take a look all around, and I’ll be there
Simpson appears to be out promoting his excellent new album A Sailor’s Guide to Earth; unfortunately, the closest show to Tucson will be at The Wiltern in Los Angeles. Bummer. That said, if you live in the greater LA area the Wiltern will be a great venue to see him play.
Cheers…xian
* In general, we expect our OTD data to be better than our OTTR data. However, because we don’t currently track OTTR data for all of our customers, occasionally that is not the case.
Special thanks to James Spezeski for the help with the reporting and data analysis.
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