Expanding the manufacturing capacity within the component manufacturing (CM) industry for wood trusses and wall panels is at a fever pitch. The overwhelming majority of CMs have the same limited capacity issue trying to keep up with sales, which led to excellent record-breaking sales volumes and profits last year (see my January article, “Record-Breaking EBITA Exceeded Mid-Twenties for Many Component Manufacturing for 2021.”) Currently, this need for expansion has now pushed most equipment vendors’ sales for new equipment orders to 2023. Sadly, many CMs are making costly errors in their planning and investments.
New Equipment and Building Facilities, the Dark Side – From the moment the contract is signed, TDC can foresee many CMs having unnecessary capacity constraints within the overall processes because of the equipment selected, the equipment set up, and the design of the new building facility.
In the past, more than one client has told me they thought their vendor misled them about the capabilities of the new automated equipment they purchased. From my perspective, I could see why they were not achieving the results they were promised. The same complaints will happen to many when the new equipment does not meet expectations. It is not enough to purchase new automated equipment. The entire material process system also needs to be upgraded, along with different methods of processing the work being done. What appears to be simple, such as upgrading a truss assembly table with auto-pucks, creates many other issues that need to be addressed. Here is a hint, when adding any new equipment into the manufacturing process, start in the design department and work your way through the entire manufacturing process—the little details matter. Too many CMs overlook all the other equipment, material flow, and processes that need to be upgraded or improved upon when adding new equipment to achieve the desired results.
New manufacturing buildings are being built with severe limitations and absolutely no ability to expand in the future. Too many CM professionals with decades of professional experience are mistaken about what is best for new manufacturing building designs.
Case Study from Recent Client – A CM requested from their equipment vendor a new building design with an equipment layout for their pending new production expansion. Please keep in mind the client was about to be spending millions on the new building and new equipment. He wanted the best possible overall system. The vendor was all too eager to provide this new building layout, and at first glance it looked straightforward from the CM’s perspective. However, I explained how the new manufacturing building could not be expanded in the future for additional capacity beyond the current request. And quite frankly, the design of the building was certainly not the best in many aspects. I could see many inefficiencies that could have been easily avoided, such as material flow and unnecessary congestion in work areas. The client was shocked and had never been shown how industrial engineering principles would create a better system and manufacturing building, which would meet their current and future needs. Lean and Six Sigma training is not enough. When designing a new manufacturing facility, you should always seek advisement from those with an industrial engineering background and experience within the CM industry. Spending a few thousand dollars to get it right can easily save you millions.
Example of Good Intentions Gone Wrong – Just-In-Time (JIT) is one of the most misunderstood and misapplied lean manufacturing tools. When JIT is appropriately used, it is very effective for saving money and improving processes. But when misused, I cannot emphasize enough how detrimental this one tool can be to any CM operation. For example, please see my December article on what more than one equipment vendor is recommending to their customers, “How to Lose Millions of Profits with Linear Saws and Two-Person Crews.”
Regardless of their good intentions, many of the CM decision makers’ assumptions and vendor’s recommendations will cost millions in future lost revenues and inefficiencies of labor. One should be very cautious of the so-called “free” advice, which may not be so free. For the comparable minuscule investment, perhaps an unbiased 3rd party review of your expansion plans that has no emotional attachment or financial gain for the choices your group is making might be very well worth the investment.
Are you ready for spring? Next month, the building industry pending price wars will become all too familiar again. Will it impact you sooner than you’re ready? Have you planned ahead? Has someone evaluated your company’s position looking from the outside in to see if your plans will measure up to your intentions?
The team of TDC is your best source for learning about proven and practical lean manufacturing best practices combined with industrial engineering principles to keep your company at the leading edge of competitiveness. No one is better at providing your team with proven results for good employee practices, pricing, truss labor estimation, and so many other best-in-class practices. TDC’s tailored solutions are for the client’s specific needs. Go beyond the typical software and equipment vendor recommendations for your operations and do what many have dared to do. Embrace the Drummond Method, and your company can experience cost savings, and net profit gains that usually take months or years can be accomplished in weeks or months, resulting in an average of 3 to 6 point net profit gains for CMs. All areas are addressed, not just the manufacturing. 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/.
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