Capacity overload! Help.

[Customguy]

Hi folks.

I'm new to this forum and in need of someone who might be able to point me in the right direction. I've recently taken over running a fairly small workshop, making bespoke kitchen doors, panels, shelves, etc - mostly out of 18mm ply, veneered front and back. The company has been growing steadily and has plans in motion to upscale to a larger warehouse in the next 12 months. However, sales are currently outstripping our capacity, so we are starting to build much longer lead times than we are comfortable with. Obviously, we don't want to have to start turning away work, so I've been tasked with investigating the possibility of outsourcing some or all of our processes to help with controlling capacity. Unfortunately, I'm not native to this industry so I lacking a bit of knowledge in this area. Can anyone give me any pointers on companies who do this sort of thing or any similar companies who might have the capacity to take some of the load? Also, any other hint's from people who may have been through something similar. Any help is appreciated! Thanks.

 

[Sideways]

Lesson from John Harvey Jones back in the day (he was talking about the 20 year waiting list to buy a Morgan sportscar). If you can't or don't want to expand to take advantage of the opportunity, put your prices up to limit demand to what you can fulfill.
2nd lesson, don't forget to keep an eye on your cashflow / working capital when you're growing quickly. Growing too fast has its hazards. Cash tied up in stock (you mention a new warehouse) is a classic danger sign.sign.

 

[Jacob]

Take advantage of the opportunity: put your prices up. More profit, shorter waiting list, better quality, afford better facilities/machines etc.
Expansion itself isn't necessarily profitable, in fact can be the end if not done cautiously.
Very few businesses ever lose by putting up prices, being too cheap is the bigger hazard. You could even review some of you jobs and amend the price, with suitable apologies of course! If they pull out you lose nothing while you still have a waiting list.

 

[artie]

I have about 12 weeks of orders even after being picky and only taking the "handy" jobs.

Problem is I don't have the raw materials that I will be using in a months time never mind 3 months time, so I have stopped quoting prices.

I tell them what it would cost today but don't give a fixed price, that will come later when the wood is delivered.

Do you have enough stock so you can fix a price for the far end of your order book?

 

[RobinBHM]

Hi Customguy, I've sent you a PM as I may be able to help.

As you are a new member here, I'm not sure if you can get private messages or not.