#14.Before You Go Manufacture(A SUMMARY)
This is a summary from the ‘subscribers only’ article of my newsletter.
I received a lot of good feedback from subscribers and thought it would be great to do a summary. So here goes!
Just finished the last exam for the term. I am currently reading a lot about Japanese Lean Manufacturing for a paper due next week. It got me thinking about all my manufacturing experiences and lessons learnt.
My first experience was at Ford Motor Company in Essex, UK. This was very insightful, and I hope to explore it in a separate article soon. The second experience was at a consumer goods manufacturing startup in Lagos, Nigeria. I came onboard the project when the equipment had just arrived.
Over the next 2month period I got the opportunity to support the installation of the machines, get involved, and kick-off production. I also participated in the sales and marketing visit to retailers and major markets across Lagos, Nigeria.
It was a profound experience.
Eventually I began to flirt with the idea of starting my own manufacturing company. Something focused on processing agricultural raw materials into finished products. Halfway into preparing a business plan I made an interesting discovery.
I discovered a number, an equation, anyone can use to succeed in any manufacturing project, called
The Breakeven Point (BEP).
Summary
In this article we learnt about fixed cost, variable cost, contribution margin, and Breakeven Point (BEP) analysis. Understanding how costs behave is crucial for effective planning.
This article is called Before you go Manufacture but then again you could have swapped Manufacture for anything: Before you go Marketing, Before you go Selling. This universal tool can be applied to anything, especially marketing.
So, next time you need to make an investment, pricing, or marketing decision, consider using Breakeven Point (BEP) analysis,
Before you go…
I hope you found this informative and relevant, and I look forward to hearing about how you apply this.
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I recently published a Table of Content to all my writing, which I would update regularly.
Stay Tuned.