Significant Financial Benchmarks for Joinery factory , giving you Additional Dollars- Factory Productivity in Dollar terms

In my view , following?are the financial benchmarks which?must be used?for?joinery factory?, and in your business where the core?area is joinery?furniture.?

??1)??How to?judge if?your factory?is?#Productive ?on financial?terms or not :?

?According to me to judge if the?#factory ?is productive or not,?the financial benchmark??generally used of comparing?the actual sale value of shipment?as??factory production /?productivity?is?not correct.

?The reason is factory needs to be judged??on its own , regardless of the gross margins?and when we compare with the billed?value/ shipped value with?production schedule??, we give unnecessary consideration to Margins, which vitiates the whole?analysis.

?The factory?productivity has nothing to do with?the fact??if the gross margins is 15 % or 20 % or?5 %?as per the estimated BOQ?or actual margins.?

?In this industry , the best financial benchmark / tool is to work out the quantum of factory?produced goods?and divide??the same by?productive labour?hours.

?Factory produced goods will?????be total of actual costs incurred on material and labour in the factory and should exclude bought out items, sub contracting costs, hired labour at site?and other places.

?We need to look at the costs incurred by factory?and work out?work in progress on this basis.

??We need to establish standard benchmarks, and then give the targets to factory??on the above basis.

?If the factory?does better than?the per USD?target?hour , factory?has been productive.

?Another very strong financial benchmark is to consider ,?on actual usage of mat and labour hours against estimate and assessing?where there is excess usage.

?To me, these financial tools/ benchmarks will truly reflect if the factory is productive.

?2)??Labour recovery?rate ( LRR)-?Pricing mechanism?, very relevant for?joinery???business is?the labour recovery?rate?( LRR).?

If?LRR?is used effectively?and in align with?your current profit and loss account,?you cannot lose money.

?Please have?a look?, and if?you are not following these financial benchmarks?for?your joinery?business , and factory , it is worth considering as it can?and will?give?your additional?Dollars .

?Further there are other tools on?how?pricing?needs to be done??considering the above?tools?and?other?financial benchmarks?as well..