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Off the Shelf

The tools, machines, software, or other resources you use to do your job fall into two basic categories. The first type is the most common and contains ‘off the shelf’ resources. The second category includes custom built or highly modified tools, equipment, or even software.

Off the shelf items tend to be cheaper than custom ones with similar functions. As the complexity rises, though, the cost imbalance may flip. The added complexity means you may be paying for features you don’t need.

Off the shelf equipment does have one major advantage. In most cases, it can be obtained much more quickly than specialized equipment can be.

Some off the shelf items are fine. Paper, pens, etc. are all off the shelf items that don’t tend to cause problems. Major software packages and machinery are a different story. It is unlikely that a machine that is bought off the shelf fits a process perfectly. For example, it might have a long setup time because it is designed to do many different functions. Or, a software package’s fields may not contain all the information you want to collect from a customer.

The benefit of off the shelf products, especially for simple items, is that they tend to be cheaper initially than custom products. This savings can, however, be quickly offset by the increase in cost of having to use a less than optimal process.

Look into developing an expertise in designing and building your own equipment. Keep in mind that there is a learning curve. The first few machines you create may be expensive. Over time, though, as you tooling group becomes more experienced, the cost will drop. For example, switching from off the shelf CNC machines to small, right-sized, dedicated machines helps with flow and quickly offsets any difference in cost.

In addition to cost savings, the footprint of custom machines is generally smaller which makes it easier to fit into a product oriented flow.

The same basic principles holds true for software packages. When investing in programs, make sure that the option for customization exists. You want to make the software support your process, not have to modify your process to accommodate your software.

While the bulk of this discussion so far has been about large machines, the same principles holds true for small items as well. Custom workbenches, for example, are nearly always better for production than standard tables. Specialized tool holders at the point of use tend to trump standard shadow boards and other storage systems.

It probably bears mentioning that your design engineering staff probably already does similar analysis on whether to purchase a component off the shelf of create one from scratch for a product. They have to decide whether a readily available connector, for example, fills a need adequately, or if they need to design a specialized one. It is not a big leap to apply the same logic to the items used for production.

Large companies will find that over time, developing in-house expertise will pay for itself. Small companies will face challenges supporting the creation of customization capabilities. Their people will likely not do this sort of work often enough to get really good at it. Even if they did have the demand, they probably don’t have enough time to devote to it. Small companies can, however, hire outside experts to do the work for them as needed.

Deciding whether to develop items or buy off the shelf, and whether to do the work on your own or hire an outside firm takes some forward thinking cost analysis. Consider all the savings that can be gained from having an item match your specific needs. This will include lower inventory, less obsolescence and shrinkage, lower transportation costs, smaller floor space requirements, etc.

 

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