Days, weeks and years go by, and it is so easy to focus on the things that need to get done to meet the urgent deadlines of the day, that you stop improving or refining your business. One thing all successful pallet and lumber companies seem to have is an ability to identify waste and work to eliminate inefficiencies. Otherwise, you would cease to be in business in such a competitive industry.
The April issue of Pallet Enterprise features a number of articles that cover areas of continuous improvement; from an article on lean manufacturing strategies used at Kamps Pallet to research from Virginia Tech on ways to improve lumber inventory management to ideas on how to improve safety meetings. Also, the cover story of the Lumber Pages focuses on a sawmill that has worked to improve operations and has become vertically integrated to ensure quality.
Increasingly, we are focusing on ways to help you improve your operations and save money. If you want a good way to cut energy costs, you should read the article by our energy consultant Ralph Russell on page 46 about energy savings involving air compressors. These are real practical solutions for your everyday challenges.
More than just making money, most pallet and lumber company leaders also want to create a business that makes the world a better place for customers and employees. Two pallet companies share how a chaplaincy program has helped them improve workplace culture and change lives. No matter your field or industry, all companies are somewhat in the people business. Please read this article on page 32 and consider what you can do to improve your company by focusing on the care of workers.
So, my letter this month is on some thoughts on continuous improvement. Included here are a few of my favorite quotes on the subject from business, science and cultural leaders.
Bruce Hamilton, a retired professor emeritus from Johns Hopkins University and an applied microeconomist, stated, “Continuous improvement is not about the things you do well — that’s work. Continuous improvement is about removing the things that get in the way of your work. The headaches, the things that slow you down, that’s what continuous improvement is all about.”
Henry Ford made an interesting comment, “Time waste differs from material waste in that there can be no salvage. The easiest of all wastes and the hardest to correct is the waste of time, because wasted time does not litter the floor like wasted material.” I could not agree more because time is one commodity that we all have the same amount of each day, and how we use it determines how productive we are. And yet it can be hardest to measure and truly identify wasted motion.
How important is the system within which our people function? W. Edwards Deming, who many may know was a famous management consultant in the field of quality management, stated, “A bad system will beat a good person every time.” Many of the efficiency drains in your operation are due to the process not just the people. You can have the best staff, but if your processes are inefficient, you will never reach your full potential.
Peter Drucker, another famous management consultant, put an interesting slant on operational improvement when he said, “What gets measured, gets managed.” This points to the importance of having and regularly monitoring Key Performance Indicators (KPIs) in your operation. KPIs differ for each company. But you need to know what yours are and look at them monthly if not weekly. And you have to know what they represent and look for the reasons behind the numbers.
Everybody is familiar with the old adage that “statistics never lie.” As a statistician I can tell you that is not always true. You have to be careful with numbers. They have a way of looking definitive, but they should be taken with a massive grain of salt. Their apparent precision is exactly their biggest fault. You need to understand the drivers behind the numbers and the conditions that may skew the results. Numbers should help identify the places that you need to investigate and further scrutinize. Be careful jumping to conclusions without some extra analysis.
Albert Einstein put a perspective on how important our actions are when he said, “The world we have created is a product of our thinking. It cannot be changed without changing our thinking.”
These thoughts may give you a lot to think about. But just in case you need some more inspiration, consider that not all lean efforts are successful. Some barriers can prevent you from creating a culture of constant improvement.
Continuous improvement is somewhat of an umbrella term and encompasses a variety of management concepts. Some of the best known include business process management, performance management, quality management, just-in-time, business process management, performance management, compliance, lean manufacturing, Six Sigma and more. These all differ in some ways while sharing the same focus to continuously improve operations and reduce waste.
All too often companies are their own worst enemies when it comes to process improvement. In an article for The Wall Street Journal last year, for instance, Dr. Satya Chakravorty, a professor of operations management at Kennesaw State University, claimed that nearly 60% of all corporate Six Sigma initiatives fail to yield the desired results, comparing process improvement to weight loss programs that “start off well […] but all too often fail to have a lasting impact as participants gradually lose motivation and fall back into old habits.” Unfortunately, I know all too much about both changes in the business landscape and failures at weight loss.
So what’s happening? If continuous improvement is so critical to the health of an organization – why is it so difficult and why are so many projects doomed to failure? Here are some main barriers to continuous improvement.
1) Buy-In from both Management and Production Workers – It is difficult to garner collaboration between a wide variety of people involved in and affected by any improvement. When you roll out a change you obviously need to consult and involve major management players involved. But don’t forget the list of employees who are affected by the change. What do they think about the change? Are they willing to cooperate? After all if the people in the trenches do not make a management change work, it is doomed to problems, and likely failure. With multiple management changes that are likely to be at different stages of implementation at the same time, how do you get your people involved and functioning in unison?
2) Prioritize the Right Thing – It can be difficult to prioritize improvement steps. There’s no shortage of good ideas for what could be improved at any organization. But how do you prioritize them? For some of you the corporate strategy may be clear, for others you may have a barrage of urgent priorities. You have to be careful to avoid incorrect or vague KPIs. If you measure the wrong things in life or in business, then how can you expect to make the right decisions? Do you pass the right information on to others in your organization?
3) Selecting the Right Management Tool – You have to choose your process management software and tools carefully. I know how easy it can be to make what seems like a logically sound decision about what tool to select only to see it sitting on the shelf after some futile efforts to make it work. Maybe the tool is just not adequate to fit the job. Often it can be too complicated. If it looks like it will do everything that your imagination had ever dared to hope for, then you had better examine it carefully. Keep in mind that any management tool has to be used for it to be any good, no matter how much it caught your attention initially.
4) Leadership Sets the Tone – Realize that when you launch a new improvement initiative, some of your employees will be skeptical, particularly if you have a habit of setting new policies and never sticking to them or enforcing them. They might think, “The boss has gone to another seminar again.” You need to be consistent to keep improvements going and to create a culture where future initiatives are taking seriously.
5) Simple Changes Work – Remember the old adage “keep it simple stupid!” The harder a change or initiative is, the less likely it will succeed. Some employees may act like they get it when they really don’t. You need to be able to explain the core concept in a simple paragraph, and if you can’t you may need to redesign the initiative.
If you sit in the management chair, you have to be the one to ultimately drive improvement in your organization. And when it doesn’t happen, you can’t blame anybody else but yourself. I am preaching to myself here as I know that I haven’t always lived by that mantra. We are always looking to improve the Enterprise for both advertisers and readers alike. If you have any ideas, please do not hesitate to contact me at edb@ireporting.com or Chaille at chailleb@gmail.com. Some of the articles in this issue came from questions or issues raised by readers and advertisers. We want every issue to make you think, “I sure am glad that I get the Enterprise.” Speaking of receiving the Enterprise, please thank our advertisers and tell them you see their advertisements in the Enterprise. They are the ones who make each issue possible.
