Last month’s article, Change Impact, talks about what impact changes at your company will have this year. Well, after 2020 and the challenges we faced, especially for the operations-intensive companies in our industry, it is important for our managers to focus on the operational challenges of 2021 and particularly how they are shaping our businesses.
The COVID-19 crisis continues to impact market ecosystems and supply chains, upending processes, organizations, and long- and short-term strategic visions. But for owners and managers, the show must go on; there’s no time for inertia or indecision. LBM/Component companies will continue to push forward, relying on operations managers and teams to navigate an environment increasingly complicated by volatile supplies, disrupted workforce availability, regulation, and fluctuating demand.
So how can operations managers prepare for what’s sure to be a challenging 2021? Let’s focus on five areas:
Workforce
I hear it many times – we want our teams back in the offices – but managers should continue transforming selected positions into remote/digital-capable positions. We have many valuable associates throughout the operation, but, where you have the capability, take advantage of the digital/remote age. Implement strategies to increase technological skills by utilizing digital tools to provide continued management while the associate is working remotely.
Health and safety must remain the top priority. Our industry must have robust health and safety procedures and systems, but more can be done. How many have walked into locations where AI-based digital technology will measure body temperatures? We have helped to implement this, and I have also been in several operations where this is being done today. By complying with health and safety rules, we show our associates how much we care, and ensure they are safe at the same time.
Cost Management
Lumber prices and now steel prices are volatile, so attention to these fluctuations is a must. Basic to any operational manager’s skill set is attention to costs – it is the company’s bread and butter. Managers may face intense pressure in 2021 to further cut costs or to raise costs with current purchasing to ensure the survival of the organization. Managing costs on all production systems and materials will be required to navigate our way through the next year. And you should think of what will be required to innovate processes and products and empower the workforce.
Processes
Processes should be redesigned to enable your organization to realize the full benefits of digital technology and automation. Our associates are still at the center of most processes, using interfaces like PCs, tablets, and mobile phones to analyze data and execute tasks and corrective measures. Managers should ensure that digital technology outputs are properly utilized. Avoiding disconnects between information and action/reaction should be prioritized.
Technology
Every year it seems that what was once purchased 3–5 years ago is now obsolete. More important is looking at the age of who we are hiring and remember, if I am trying to attract, I also want to have technology tools that are current. Operations managers should make sure they fully understand the key features, technical parameters, and value of the technology that is available to them to increase productivity, profitability, and market share. Understanding the world of industrial IoT can help identify meaningful use cases, calculate ROI more precisely, and achieve tangible benefits.
Real-time data can be used to enhance operational KPIs such as overall equipment effectiveness and asset availability. IoT computing enables the processing of data at the network edge, allowing decisions to be taken in real time at the data source (e.g., a shop floor). Cloud computing-based complex models provide scalability and can process and analyze massive amounts of data. They are powerful tools that can handle predictive maintenance or predictive quality tasks.
Waste & Sustainability
We have seen many initiatives in the past that are focused on how we use the raw materials we purchase, handle in the operation, and ultimately deliver to the jobsite. Managers need to continue to focus on how waste is being produced in the system. This waste may include lumber, steel plates, wrapping materials, etc. How we change processes to minimize the waste that is put in the trash bin also translates to increased profitability.
Along with this is looking at the footprint we leave. We do not talk enough about this sometimes, but how much electricity is your operation using? How much fuel is used to deliver products? Etc. There are a number of operations moving towards LED factory lights; although this has a large upfront cost, the costs savings are significant. Using more robust logistics software to better plan deliveries saves companies significant dollars in fuel. Again, for many of the younger generation we hire, these considerations are front and center to them.
Despite these and other difficulties, operations leaders remain under pressure to deliver outstanding results. It is important to remember that simply driving efficiency and reducing costs are not everything. Waste and sustainability, human resources development, and digital transformation are also key. Bottom line for your business: To create a truly resilient organization, it is critical to fully align technology with people and processes. If the team at 4Ward Solutions Group can be of assistance to you, please contact us; we would be honored to work with you towards your success!
Final Thought
In the last week of January, the SBCA Board is meeting in person for the first time in a year in San Antonio, TX. A key focus of the meeting will be to discuss the much-needed changes the Executive Committee and Board have made in the operational management of the organization. Last month, I shared how much I was encouraged with Jess Lohse being named the new Executive Director. He has been hiring several individuals who now work directly for the Association and all of them are really outstanding.
What is not said often is the yeoman’s work the Officers and Executive Committee have done to investigate, re-organize, and correct that now has put the organization on a sustainable path. My personal thanks go out to each of them for putting in the amount of time they have while also having to run their own businesses during the past year which included a pandemic. They have had to dig deep into a lot of information, and they have had to take a position that I can clearly see was to ensure the success and future of SBCA. Thank you, Mike Ruede, Gene Frogale, Jeff Taake, Greg Griggs, Steve Stroder, Scott Ward, Roger Helgeson, and Joe Hikel!
[Editor’s Note: We at The Advertiser second that! THANK YOU to everyone who has worked tirelessly to ensure that our Association is in good shape and good hands moving forward. Whether you’ve been involved with SBCA for 20+ years (like me), or longer (like Thom and Ben), or even if you’ve only just begun to explore what this trade association can do for you—rest assured that SBCA will continue to deliver world class service. Kudos to everyone! Anna]
Ben Hershey is CEO of 4Ward Solutions Group including Consulting, Labor, Offsite, Design, Software Development, and Back Office Solutions. When the industry needs an actual expert, they turn to the 4Ward team with more than 150 years of experience. 4Ward Consulting Group is the leading provider of Management and Manufacturing Solutions to the Structural Component and Lumber Industry. A Past President of SBCA, Ben has owned and managed several manufacturing and distribution companies and is Six Sigma Black Belt Certified. Ben has provided consulting to hundreds of Component Manufacturers, Lumber Dealers, and Millwork Operations in the past ten years. You can reach Ben at ben@4WardSolutionsGroup.com or 623-512-6770.
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