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What Old-School Manufacturing Can Teach New-School Entrepreneurs

credit: Cory M. Grenier

A Short Essay on the Value of Your Time and Attention

In order to make a living, I work a day job in a decidedly un-sexy industry that is not the tech industry. In fact, I work in an industry that could not be more of an opposite of the industries that I see people posting about all over the internet. I work in the industrial manufacturing and distribution space — as a mid-level manager/salesperson for a firm that supplies hardware to manufacturers — two thousand miles from Silicon Valley.

It is an interesting space to work in, because it straddles the line between the new, data-driven, fast-paced, technology-loving workforce, and the old-school, structured, antiquated industry that is industrial manufacturing. It has also taught me a lot about value, costs, and good business practice — more than the tens of thousands of words I’ve read about startups and entrepreneurship have ever pretended to teach me.

Part of my job consists of placing orders with parts manufacturers for parts that our customers (also manufacturers, but of complex assemblies) need in order to build their products, and ensuring that the customer gets those parts in time to build. Time is of the essence. Space is of the essence. Costs are tracked relentlessly. And those costs are as well understood as can be.

The Break-In Fee

Which is why when I call a parts manufacturer to expedite an order we placed with them, one of the things I can expect to hear from them is that there is a break-in fee. The break-in fee is a fee that manufacturers charge when they have to interrupt the job they’re currently doing in order to start another one at an accelerated rate on the same machine.

The reason for the break-in fee is that there are only a finite amount of machines with which they can build, and only certain machines can make certain products. There is also a finite amount of available labor that is non-overtime labor. Because of those restrictions, manufacturers have to be very strategic in scheduling their production, and once they have a workflow and schedule, every interruption has knock-on effects to other orders to which they’ve committed. Every knock-on effect has a cost.

I’d like to make that more abstract, in order to convey the lesson that I think people doing knowledge work can learn here. Establishing a workflow and scheduling work enables better quality work, and for that work to be done more efficiently. When workflows and schedules are interrupted, quality, efficiency, and timeliness are degraded and costs to those doing the work mount until the normal workflow and schedule resume.

Why the Break-In Fee Works

In most cases, when a parts manufacturer quotes me a break-in fee, it’s expensive. When I pass that cost along to my customer, most of the time they don’t see the cost as worth it, and they adjust their production schedule to ship later. This often happens after I have received emails and calls telling me just how urgent and critical it is that we deliver parts much sooner than the original promised date.

So what does that tell us? It tells us two things:

  1. People will try to interrupt the workflows and schedules of others, so long as it costs them nothing to do so.
  2. When people understand the costs of their demands, they are far less likely to make unreasonable ones.

For those of you who work for yourselves — whether you own a business or you freelance — remember that interruptions in your workflow and schedule cost you. Attention and focus are your machinery, and your materials. As with machines in a manufacturing facility, your mental capacity is limited — as is your time.When you your process and machinery gets interrupted, that costs you.

So when demanding clients drop you “urgent” emails that they claim require your immediate attention, remember that even looking at the email costs you. Then ask yourself if you are being compensated by this customer for that cost. If a client tries to drop a project on you that disrupts your other work, ask yourself if you are being compensated by them for the cost of that.

Now, you will not go far by quoting a break-in fee to clients left and right. That’s not good for building relationships. However, you should try to take into account the kind of disruptions you can expect, and quote your services accordingly — from the beginning. This way, when you are being disrupted, you can rest assured that you are being compensated for your true costs.