Another year has come and gone, and what an invigorating year it has been for most companies. Net profits after taxes for most component manufacturers were in the high teens to mid-twenties—at least for those who do not allow for never-ending excuses. Once again, it is time to reevaluate the game plan. Here are three key issues component manufacturers are dealing with this coming New Year.
Do not let your ego or others’ egos get in the way of implementing the best ideas. Time and again, too many of us use yesterday’s logic to blind us to what could be possible today. When we allow our egos to get in the way, we all get the same results. Many talk a good game about how they are making improvements, yet the same problems keep coming up. Do the solutions to the following problems continue to elude you?
- Employee Hires – You cannot find enough skilled and reliable people to staff all the needed positions.
- Equipment Investment – It looks like you need to make heavy investments in expensive equipment to meet expected growth and drive down your manufacturing costs.
- Making Changes – Implementing new ideas and improvements seems to take forever and often never happens.
The idea that one can fill all the positions with talented personnel and have a low turnover even in areas with a low unemployment is a blind spot for many companies. If your company is constantly hiring, has high turnover, and never seems to have enough skilled and reliable people, this a definite sign that employee relations need to be changed and improved. You will only get the same results unless you are willing to change your practices, and change will only come from listening to and learning from others. Consider the example of one company’s manufacturing employee practices. The ownership placed a great deal of decision-making authority in the expertise of people within sales and design groups and ignored the opinions and desires of the employees in the shop. In other words, this was a classic case of fiefdom syndrome, in which the so-called experts in the office always knew better than those in the shop. By elevating one group over another, you lower the other group like a teeter-totter to satisfy individual ego and self-interest. Everyone in the shop felt they were second-class employees, and they had every right to feel this way. The results were predictable to a guy like me, who spends a great deal of time on this subject during consults. This particular company’s productivity output and net profits were marginal at best, but they felt the results they were getting were on the high end of the spectrum. These so-called experts did not know how poorly their company was performing because their belief in their own greatness blinded them. Please do not let your ego blind you, and do not elevate yourself above all others. It is a rule of mine to always learn something from each new client and not allow my ego to blind me to better ideas. Just because a company hires the number one guru in the truss industry—yours truly—does not mean this guru cannot learn something from each new client. Every one of us must set our egos aside, listen, and learn from others to constantly improve. Companies with a very low employee turnover consistently have higher net profits and productivity.
Many companies fall into the trap of thinking they must spend a ton of money on the so-called latest equipment to get top-of-the line results. The ideas about best-in-class equipment setup and performance are always a hot debate, and I seem to have a mixed reputation among vendors because I bring up too many ideas that do not fit with what they would like me to push. Salespeople will only give you what they think you want to hear to convince you their services and equipment are the best thing since sliced bread, but throw in some of Drummond’s ideas, and—lo and behold—it could kill the sale because the ideas may not reinforce what was presented, which upsets many vendors. However, Drummond works for the client, not the vendors. Consider this recent case. A client was seriously considering a new investment where each build truss workstation would be set up with a linear saw with an automated lumber feeding system to the linear saw and to each of the tables. This was a one-million-dollar investment, so I asked them about their current practice for material movement and whether any were lacking the proper and timely material. They claimed that they were very good at making sure none of the workstations lacked proper and timely material, which I verified, so I asked them how their million-dollar investment would get more trusses built when they already had enough proper and timely material at each table. They were stumped. The fact is that it would not have improved the output of each of their tables. They were focusing not on the end results, but on the shiny new investment and smooth-talking equipment sales representatives. In their case and many others, that million dollars could be spent on other equipment that would actually get more trusses built and improve their overall profitability. If you are wondering when you should do a consult, it is always best prior to making big changes, including equipment investment.
Fixing problem areas always takes longer than intended, and people get frustrated with the lack of positive change. Too many companies have areas that seem to be stuck in neutral and unable to improve. These areas might be any department, but they always seem to follow the same pattern. People talk about wanting change, and they talk about new ideas, but these new ideas never seem to get implemented. They tell everyone change is coming at a later date—but it never arrives. There are two major causes of this. First, change may require realignment of responsibilities, so people who will lose influence fight the change with everything they have. Second, sometimes the change is desired, but they simply do not know how, and they need to be taught. Leaders who truly want to implement change have to address these two issues. Show them how and remove the people who hinder change. Create a drop-dead date and use it as a pointy stick. Whatever is going to be implemented, you can bet your bottom dollar it is not going to be perfect and will require further refinement. Also, people will get upset, but you cannot let this stop what needs to happen. Just keep in mind that real change always comes from the top down. If your company is struggling with change and you are the top dog, the solution starts with you.
Cost savings and net profit gains that usually take months or years can be accomplished in weeks or months with Todd Drummond Consulting (TDC). Whether you are a new or a longtime operation, save your company a great deal of time and money by getting professional help and training for effective implementation of lean manufacturing and time standards from the number-one expert on reducing costs and improving productivity in all departments of the wood truss and wall panel manufacturing industry using proven and practical lean manufacturing practices combined with industrial engineering principles. Before you buy equipment, get TDC advice! TDC does not receive referral fees from any equipment or plate vendors, so you can trust TDC for unbiased vendor and equipment recommendations shaped by the vendors’ customer experiences. Don’t take my word about TDC’s services, though. Read the public testimonials that so many current and past clients have been willing to give: https://todd-drummond.com/testimonials/
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