Is Large Scale Production the Right Move for Your Company?

  • By Susan Burns
  • 07 Apr, 2016

One of the ways in which your company can expand -- and reduce production costs at the same time -- is by implementing a large scale production model.

Large scale production, or mass production, is a vehicle that provides many advantages to a company, as long as it’s done correctly.

The primary advantage is that large-scale production provides economies of scale, and that results in the following more specific benefits:

Better use of equipment and other assets

It's more cost-effective to implement up-to-date and more efficient machinery because the cost is spread over a larger number of units produced. Also, as a big producer you can have machines running 24/7, or at maximum capacity, which lowers the cost per unit even more. Likewise, the cost for ancillary items such as electrical cord, or a higher gauge wire, or a bigger pipe, that could increase production capacity, becomes insignificant over time.

Access to specialized workers 

In a mass production scheme, specialized workers are in charge of each specific step of the production process, becoming more efficient as they spend more time doing one specific job. As workers become more specialized, their salary increases. This expense is off-set by the fact that one single machinist, technician, or operator can handle a machine that will produce more units.

More efficient selling systems

Implementing a large scale production model, allows you to streamline order-fulfillment and to increase sales because you won’t be faced with product shortage or pauses in the production process. This allows for clients to create a steady demand that is efficiently filled, and a continuous revenue stream for the company.

Lower rent costs

When a facility is used at full capacity, the cost of rent is lower than if it were used for a smaller quantity, thus lowering cost of production.

Investment in experimenting and researching

Moving your existing line into large-scale production gives you breathing space to invest in experimentation and development of new products, new materials, or more efficient production processes that may lower even more the production costs even more and, also, expand your product line and market share.

Other benefits

There are some other collateral benefits of large-scale production that we don't often consider. A factory or production company requires good transportation services, reliable internet and other services and, of course, skilled workers. Additional educational opportunities may also result as a side benefit many people. And, as a customer, you have the ability to positively impact working conditions by insisting on only doing business with facilities that have fair and favorable employment practices. These are important factors that favor the workers of large scale production companies and the cities or towns in which they are located.

These are some powerful pros of large scale production. But, at the beginning we mentioned this strategy was favorable “if done correctly”, remember?

The thing is, there’s a delicate balance between the maximum number of units produced, and the minimum cost per unit possible. If the company grows beyond this “ideal point,” costs start to increase. As an example, an industry could exceed the available supplies of raw materials or saturate the local market, which may create higher cost of goods and higher transportation costs.  

So, before making such a massive move, it’s always advisable to consult with an experienced business advisor . A good business strategist will be able to analyze your company, and help you create a step-by-step plan, so your company expansion is made at the right moment, the appropriate pace, and to the right level.

Ready to bring your company to the next level? Let’s do it!


WORK WITH ME!

More Posts from Susan's Blog

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By Susan Burns 26 Oct, 2017
P.S. There has been a lot of discussion on social media about my post on reading fine print  when installing apps, specifically focused on the Grammarly app. Some people have responded with the interpretation that Grammarly can only use your content to correct your grammar and not for anything else.

I disagree. This is not a correct interpretation, in my opinion.

Even though that interpretation may be based on a provision in the TOS that states you keep ownership of
your content, they still have an unlimited, perpetual, royalty-free right to use it. I won’t repeat the prior
post, but do urge you to read it .

Others have suggested that Grammarly’s TOS are typical of SaaS (software as a service) agreements and,
somehow, that makes it okay. The TOS may be similar, but the products aren’t. Grammarly, in my
experience, crawls through everything you type. Everything.

The other argument proposed by someone is that because this is typical SaaS language, they don’t really
mean that they are going to use your content. Really? Then say so in a clearly-drafted, user-friendly
contract a/k/a TOS.

I have not heard of someone successfully arguing in court that even though they agreed to a license of
their product, they didn’t think the person was really going to use it … and therefore, they shouldn’t be
allowed to use it. If you know of such a case, send it my way.

Again, legal ethics prohibit me from using the service. That aside, I don’t choose to give Grammarly
access to everything I type.

As one person put it, “everything ever typed on the computer, so while it runs in the background, it
gathers password, credit card data, shopping habits, text conversations from Facebook, messenger
services, anything you do... recorded and stored.”

Finally, my posts are my opinion and my legal analysis. I am not your lawyer. And, I am not telling you
what to do.

One of my major focus points with clients is clarity. Fabulous decisions come from clarity. Make a
decision that’s right for you.

I love a great discussion! Keep the comments coming.

MSB
By Susan Burns 24 Oct, 2017

Recently I was engaged in a Facebook exchange among a group of successful business women. Someone asked for opinions on using Grammarly—an app that is marketed as “A FREE, ACCURATE GRAMMAR CHECKER BUILT FOR EVERYONE.”  

The comments started rolling in: “love it!” “best thing I have used in a long time.” “Cuts my writing time significantly.” And more like that.

I actually had installed the free app a few weeks before to give it a test run. I found it to be a nuisance because that little app was popping up and sticking its grammar-nose in every single thing I wrote. My emails. My blog posts. My word documents. That spelled danger to me, and I immediately deleted it.

My curiosity piqued, I checked the Terms of Service (which, admittedly, I should have done first). Here is what I found:

By uploading or entering any User Content, you give Grammarly (and those it works with) a nonexclusive, worldwide, royalty-free and fully-paid, transferable and sublicensable, perpetual, and irrevocable license to copy, store and use your User Content (and, if you are an Authorized User, your Enterprise Subscriber’s User Content) in connection with the provision of the Software and the Services and to improve the algorithms underlying the Software and the Services. (emphasis added)

Here's what you need to know:

  • Grammarly, Inc. is a Delaware corporation. They include in the definition of “Grammarly” not only the corporation, but also all of its subsidiaries AND other affiliates.
  • The definition of “Software” is “the software.
  • The definition of “Services” is … wait for it … “services.” 
  • And, although it is poorly drafted, it seems to be attempting to include any future Software and Services provided by Grammarly, which you recall also means any subsidiary or affiliate.

What does this mean for you?

It means that if you install Grammarly, whether it’s a free service or a paid service, you are specifically giving an unlimited perpetual license to your content to Grammarly and any company they affiliate with and any of their subsidiaries basically for any service they provide now and decide to use in the future.

That means that if you use Grammarly, instead of your own brain or a copy editor, you are no longer the exclusive owner of your content. That means they can republish, provide to third party affiliates, and use your data and materials any way they see fit.

The bottom line is that Grammarly has access to—and the unlimited, forever—right to use your content. Period.

And, once you install Grammarly, it is everywhere . It pops up in every document you create. Every. Single. One. If you don’t believe me, try it yourself.

Of course, lawyers and other professionals with a confidentiality responsibility to their clients are ethically prohibited from using Grammarly. (And, I hope they read the fine print.) But even if you don’t have an ethical responsibility to keep information confidential, do you really want to give up the right to your content?

Think about it! And next time, read the fine print. … or call me, and I’ll read it for you.


​*This post has been updated here .

By Susan Burns 28 Feb, 2017

The driverless car industry is hot and super-competitive. That’s a given. Here’s what’s not hot if you are Waymo, the self-driving car business that was spun out of Google’s parent company:

By Susan Burns 19 Feb, 2017

Recently, there was a trademark spat between Adidas and Tesla. The story piqued my interest because   the big players make mistakes that are instructive for small businesses (only on a grander scale)—and because it illustrates the importance of brand identity and underscores why it’s smart to register your mark.

In a nutshell, here’s what happened: Tesla filed with the US Patent and Trademark Office (USPTO) to register its Model 3, three-bar logo as a trademark. If the registration had been for the purpose of using the mark on a car, there would not have been a problem. BUT, Tesla registered to use its three-bar “E” on clothing. Adidas, a company known for rigorous policing of its brand identity, challenged Tesla’s right to register the mark as confusingly similar to the Adidas three-bar logo. Tesla withdrew its application. Adidas protected its three-bar brand identity.
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