“In just 30 days, profits increased by $50,000.”
Management articles are almost always about problems. But, this real-life event showcases how problems can be turned into opportunities. Owners and top-level management can sometimes be held captive by their limited experiences and training. However, there are many enlightened leaders who understand there is always something to learn.
Indeed, learning from the mistakes of others is a wise strategy, but too often ego gets in the way.
Until there is acceptance of a problem and a resolution to fix the problem can real learning take place. The following is a true story that demonstrates how education can quickly turn a problem into a long-term tool for success.
The Business Problem
A Chicago, Illinois-based steel fabricator, supplying a global market with wire product displays, store fixtures, point-of-purchase (POP) displays, and custom wire frameworks, realized their profits were trending negatively.
They had tried a series of initiatives, but their efforts were actually having a negative effect on employee morale as they tried to push for more productivity.
In fact, the new initiatives put forth by management were starting to divide employees into groups-
- those who blamed the management, and
- those who wanted the company to succeed and do whatever it would take to stay competitive (and keep their jobs).
Admitting There’s a Problem
The business was family owned and had built a solid brand in the industry. The owners decided they were not equipped to solve the problem; indeed, their attempts to fix the problems had only created more problems. After an open and honest meeting between owners and managers, it was politically postulated that the owner did not know what they were doing. When owners asked for suggestions on what their managers would do, there was nothing but shrugs and silence.
Reluctantly Looking for a Solution
Well, both ownership and managers felt the company was worth saving, if only they knew what to do. Reluctantly, a suggestion was made to bring in consultants to help solve the problems.
At least, if things continued downward, they could blame the consultants, a few managers suggested. Ownership agreed to give it a try.
The owners contacted their national association to find out if they could recommend a consulting firm familiar with the industry. They were provided with several association members who had used consultants and ownership called some of the association members to discover if consulting might help.
One particular association member sang the praise of a consulting group that helped them solve their problems. Enter MetaExperts.
After making contact with MetaExperts, a preliminary meeting was set up. The first consultant came in for a few days to analyze the company and recommend a project to help the company solve its problems.
After several meetings with key employees, reviewing the financials and long discussions with the owners, the consultant proposed a project to resolve the problems as well as presenting an estimated cost-benefit analysis. At first, ownership was skeptical. After all, who could know their company better than them? However, the consulting company understood this natural concern and structured their services in such a way that the risks to the company were limited and subject to an immediate stop if ownership was not happy with what was being done.
OPEX Consulting Actions Taken
The very next day after signing the agreement for the project, two consultants showed up at the factory and were introduced by ownership as a team of experts here to help the company.
Both consultants immediately took charge and laid out how the consulting would unfold and that it was a collaborative affair in which employees play a vital part. That said, the consultants went to work:
- They performed an opportunity appraisal and using the results to train owners and key managers to understand and use specific methods in Operational Excellence (OPEX).
- The consultants quickly developed a customized approach to engage the entire workforce in multiple “quick-win” process improvements including:
- Redesign of the plant layout, and
- Adoption of one-unit flow and pull systems to improve inventory controls, increase quality, minimize handling costs, and slash lead times.
- They set up coaching and mentoring of the organization’s supervisors and management to deploy advanced skills for practicing High-Performing Team methods.
OPEX Consulting Project Results
Hallmark results of the company's transformation were an increase in their profit by $50,000 in just 30 days due to the upfront 'quick-hit' innovations, ultimately increasing their annual profit performance by $700,000 in the first full year. The sum of their transformation also included:
- Improving productivity by 30% across their workforce,
- Decreasing lead times for large orders by 50%,
- Seeing a reduction in order lead time standards of 12 weeks to as little as two weeks, and
- Obtaining record sales in the second year after the OpEx implementation.
Measurable Benefits-Post Project
- $50,000 profit in 30 days
- $700,000 profit in one year
- Record sales the next year
- 30% improvement in productivity company-wide
- 50% decrease in manufacturing lead times
Client Skills Required: OpEx understanding and deployment, agility in incorporating quick fixes, SOP (standard operating procedures) improvement, continuous process improvement, leadership and development in the practice of High-Performing Teams.
Contract Length: 30 days
Operational Excellence is not a mystery and almost all top companies have an ongoing program of OpEx. However, if you do not have an ongoing OPEX program in place in your company, it is most likely costing some eye-popping lost opportunity profits.