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[av_heading heading=’2023 Summary: Expectations for 2024‘ tag=’h1′ style=’blockquote modern-quote modern-centered’ subheading_active=’subheading_below’ show_icon=” icon=’ue800′ font=’entypo-fontello’ size=” av-desktop-font-size-title=” av-medium-font-size-title=” av-small-font-size-title=” av-mini-font-size-title=” subheading_size=’20’ av-desktop-font-size=” av-medium-font-size=” av-small-font-size=” av-mini-font-size=” icon_size=” av-desktop-font-size-1=” av-medium-font-size-1=” av-small-font-size-1=” av-mini-font-size-1=” color=’custom-color-heading’ custom_font=’#0a3054′ subheading_color=” seperator_color=” icon_color=” margin=” margin_sync=’true’ av-desktop-margin=” av-desktop-margin_sync=’true’ av-medium-margin=” av-medium-margin_sync=’true’ av-small-margin=” av-small-margin_sync=’true’ av-mini-margin=” av-mini-margin_sync=’true’ headline_padding=’,,10px,’ av-desktop-headline_padding=” av-desktop-headline_padding_sync=’true’ av-medium-headline_padding=” av-medium-headline_padding_sync=’true’ av-small-headline_padding=” av-small-headline_padding_sync=’true’ av-mini-headline_padding=” av-mini-headline_padding_sync=’true’ padding=’10’ av-desktop-padding=” av-medium-padding=” av-small-padding=” av-mini-padding=” icon_padding=’10’ av-desktop-icon_padding=” av-medium-icon_padding=” av-small-icon_padding=” av-mini-icon_padding=” link=” link_target=” title_attr=” id=” custom_class=” template_class=” av_uid=’av-lq3lksg7′ sc_version=’1.0′ admin_preview_bg=”]
It’s always a time for numbers, especially at this time of the year. Soon, we will be taking stock of 2023 and also taking a peek into the beginning of 2024.
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The year 2023 has proven to be a remarkable one for us. Our sales figures have exceeded last year’s results and approached the goals set in the budget. The financial bottom line has been positively impacted not only by our ability to control costs but also by higher margins than originally planned. At the same time, we have reduced inventory in line with our plans and, additionally, generated ‘money in the bank,’ far beyond our expectations. “So far so good,” as they say, but as always, there are areas where we can strive for improvements.
In relation to the budget, we face a challenge regarding labor hours. This is due to several factors, but most notably, there is a shortage of materials. Whether it’s a direct shortage or irregular access to materials, it results in costs for planned production, especially labor costs, that we are unable to execute. This situation is reflected in our conversion cost per hour, which unfortunately has not decreased as we had hoped.
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[av_image src=’https://gknposten.no/wp-content/uploads/2023/12/GKN_ansatte-21.jpg’ attachment=’6694′ attachment_size=’full’ copyright=” caption=” image_size=” styling=” box_shadow=’none’ box_shadow_width=’10’ box_shadow_color=” align=’center’ font_size=” overlay_opacity=’0.4′ overlay_color=’#000000′ overlay_text_color=’#ffffff’ link=” target=” animation=’no-animation’ animation_duration=” animation_custom_bg_color=” animation_z_index_curtain=’100′ parallax_parallax=” parallax_parallax_speed=” av-desktop-parallax_parallax=” av-desktop-parallax_parallax_speed=” av-medium-parallax_parallax=” av-medium-parallax_parallax_speed=” av-small-parallax_parallax=” av-small-parallax_parallax_speed=” av-mini-parallax_parallax=” av-mini-parallax_parallax_speed=” hover=” blur_image=” grayscale_image=” fade_image=” appearance=” css_position=” css_position_location=’,,,’ css_position_z_index=” av-desktop-css_position=” av-desktop-css_position_location=’,,,’ av-desktop-css_position_z_index=” av-medium-css_position=” av-medium-css_position_location=’,,,’ av-medium-css_position_z_index=” av-small-css_position=” av-small-css_position_location=’,,,’ av-small-css_position_z_index=” av-mini-css_position=” av-mini-css_position_location=’,,,’ av-mini-css_position_z_index=” transform_perspective=” transform_rotation=’,,,’ transform_scale=’,,’ transform_skew=’,’ transform_translate=’,,’ av-desktop-transform_perspective=” av-desktop-transform_rotation=’,,,’ av-desktop-transform_scale=’,,’ av-desktop-transform_skew=’,’ av-desktop-transform_translate=’,,’ av-medium-transform_perspective=” av-medium-transform_rotation=’,,,’ av-medium-transform_scale=’,,’ av-medium-transform_skew=’,’ av-medium-transform_translate=’,,’ av-small-transform_perspective=” av-small-transform_rotation=’,,,’ av-small-transform_scale=’,,’ av-small-transform_skew=’,’ av-small-transform_translate=’,,’ av-mini-transform_perspective=” av-mini-transform_rotation=’,,,’ av-mini-transform_scale=’,,’ av-mini-transform_skew=’,’ av-mini-transform_translate=’,,’ mask_overlay=” mask_overlay_shape=’blob’ mask_overlay_size=’contain’ mask_overlay_scale=’100%’ mask_overlay_position=’center center’ mask_overlay_repeat=’no-repeat’ mask_overlay_rotate=” mask_overlay_rad_shape=’circle’ mask_overlay_rad_position=’center center’ mask_overlay_opacity1=’0′ mask_overlay_opacity2=’1′ mask_overlay_opacity3=” title_attr=” alt_attr=” img_scrset=” lazy_loading=’disabled’ id=” custom_class=” template_class=” av_element_hidden_in_editor=’0′ av_uid=’av-lq3lr490′ sc_version=’1.0′ admin_preview_bg=”][/av_image]
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The Key to Success in 2024
Conversion cost per hour will be the key in 2024, especially in the upcoming first quarter. We are facing a significant examination period in the first quarter of 2024 as part of the conclusion of the Nordics project. I have high expectations that if we achieve our set goal, it will not only provide a significant marketing effect internally in the group but also open the door to new and rewarding contracts.
Our ambitious goal is to reach the coveted $158 per hour. However, this figure will be escalated to $190 per hour in accordance with the Consumer Price Index. This represents a significant reduction for us. To reach this aggressive goal, we depend on continued good cost control, as demonstrated in 2023. But we must also focus on generating more productive hours. Many have already worked intensely to ensure sufficient materials for the first quarter. Even though we haven’t reached our optimal material levels, I hope that, as a united team, we can maximize production time given our current assumptions.
To showcase the actual production capacity we possess, we now have the opportunity to be more flexible than ever. Increased flexibility in raw material inventory, increased safety stock, and ordering larger quantities than before give us the ability to ensure the availability of raw materials when needed most. This also helps the startup go as planned. Additionally, we can be more flexible regarding finished goods inventory and, to a greater extent than before, produce goods for inventory, such as Leap 1B LPT-cases. This increased flexibility gives us the opportunity to maintain a steady production and optimize the production rate in line with the best LEAN practices. I am firmly convinced that the most expensive thing we can do is not to produce hours!
Together Towards Success
My great New Year’s wish is that we, as a unified unit, stand together to produce everything that can be produced in the first quarter of 2024. I truly hope that we have the pace set right from the first working day of the new year, in a unique harmony between people, machines, and materials!
Meanwhile, I wish you and yours a Merry Christmas and a Happy New Year!
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