How Investment Bias Can Cost Your Company Millions

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Issue #16305 - December 2024 | Page #26
By Todd Drummond

It appears I may have opened a can of worms with my last article, “A Case Study for Transforming Profits Through Employment Practices.” The article was a summary of the session I led at BCMC, “Case Study —Building Material Supply & Truss Manufacturing.” The article mentioned that the equipment and employment practices of some roof truss component manufacturers (CM) are not the wisest. Although most of the feedback I received on the article was very positive, some readers were upset because the article did not align with what they thought were best practices.

Where do best practices ideas come from? — Let me state that all the information I provide my clients is not intended to promote me personally, as if I am trying to be the smartest person in the room or claim that my positions are all original ideas. On the contrary, my goal is to share the knowledge I have learned over more than twenty years spent with hundreds of clients, challenging all of them to determine whether their current practices are indeed the best. Over that length of time, don’t you think a person should have picked up best practices from all of these CMs? Suppose your profession was about learning and teaching lean principles backed by industrial engineering practices without playing internal company politics. Would you have made all the same decisions in your company? TDC’s best ideas come from combining all of the best practices that previous CMs have implemented and what I have brought into the conversation. At each consultation, TDC tries to find something new that can be added to the growing list of best practices. All of these best practices have been and are being proven daily.

Internal decision-making starts with what is considered “safe” — Whichever plate or equipment vendor your company has chosen to partner with, your employees feel much safer calling upon them to make any equipment, software, or process upgrades. Why would someone risk their job and status by taking a risk with a maybe solution from someone other than the chosen vendor your company is already working with? For example, if your current vendor insists that board foot (BF) is a perfectly acceptable method for estimating roof truss assembly labor, might it be possible the software they are providing is incapable of using more sophisticated labor estimations other than BF? Your vendor’s advisement may be biased in some cases because the solution, software or equipment, they offer is all they can provide your group, regardless of what might be best for you.

For further explanation of BF versus time standards, see my previous articles:

TDC does not receive royalties from any plate or equipment sales, so my advice is not influenced by the opinions of any other company’s vendors. That means that those companies may not always like what I have to say, but no malice is intended on anyone’s part. Each vendor has their strengths and weaknesses, and it is my job to provide your group with the most accurate information possible so that you can make the most informed decisions that lead to healthy profits for your company. And to answer the unspoken question, yes, TDC will advise a client to consider alternative vendors if your current vendor is incapable of implementing better solutions.

Invested bias can skew a decision-maker’s judgment — Once the decision-maker has invested large sums of money and time into an equipment purchase, there is little that can be said to sway their mindset and convince them they may have made an error. In my last article, “A Case Study for Transforming Profits Through Employment Practices,” I clearly stated that no roof truss roller gantry table should have more than two workstations feeding one finish roller. With millions of dollars invested in hundreds of roof gantry tables with more than two workstations across North America, how do you think many received this news? The same can be said about a two-person crew versus a three-person crew on a roof truss table. How many have allowed themselves to be so invested in the idea that BF per work-hour shows an apparent gain using two versus three assembly crews? Yet, in that same article, the numbers clearly show that two-person crews severely reduce the sales dollars produced by 1/3rd, and any perceived labor savings are lost, so in the end, there is an overall loss, not a gain. How do you think this message was received by equipment vendors who convinced so many GMs that these commonly accepted practices were the wisest decisions? The same thing can be stated about roof truss robotic automation. What is being perceived as a worthy investment for robotic automation is undoubtedly being challenged by data by TDC. Some robotic automation is worthwhile, but millions of dollars are being invested in automation that is not in the CM’s best interest. Instead of looking at the situation superficially, however, TDC always recommends gathering additional data, whether it be automation for cutting, material movement, or assembly.

Rethink assumptions to ensure smart decision-making — Unfortunately, brand-new manufacturing facilities continue to be built incorrectly with the wrong equipment, layouts, and building configuration for maximum efficiencies and capacity with the ability for future growth. It is shocking to witness how many millions of dollars could have been saved if more time and unbiased advice had been offered and implemented initially. In the end, it is not about who is the smartest or who has the best idea. Perhaps what should be considered is that just like it is always wiser to spend a little more money on a well-written and thought-out blueprint to reduce costly errors for new buildings, which designers complain all the time about poorly drawn prints, perhaps a little more time and research should be invested before deciding what will be best-in-class new processes and equipment for your business.

TDC is your best source for learning about proven and practical lean manufacturing best practices combined with industrial engineering principles to keep your company competitive. 20+ years for time standards (MM, RE, or SU) development and refinement for wood trusses. No one is better at providing your team with proven results for best-in-class practices. Please do not take my word about TDC’s services, though. Read the public testimonials many current and past clients with decades of expertise and experience have been willing to give: https://todd-drummond.com/testimonials/

Website: www.todd-drummond.com • Phone (USA): 603-748-1051
E-mail: todd@todd-drummond.com • Copyrights © 2024

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