Recently I had the opportunity to work with a large and well established architectural woodworking company. The well-funded company is presently managed by a third-generation family member. I was called in by the chairman to look at means to vastly improve the performance of the company. Sadly the profit margin over the last decade has been dismal. Presently the company finds itself in competition with bidders from far afield, undercutting its bids by 20 percent and more.
I gladly took on the challenge to see what needed to be done. I simply informed them that I could act as a change agent by holding up a mirror to the internal blindness that is oft associated with long-lived organizations.
The company has a skilled and stable workforce with hardly any turnover to speak of. Everyone from top management to machine operators I spoke to likes working for the company. The work done for both commercial and residential contract work is of high quality and distinction. The management is both theoretical and, where necessary, well experienced in woodworking skills. Unfortunately, however, due to a lack of investments, very little attention has been paid to modern management styles as well as modern technologies regarding parts processing due to a lack of investments.
Due to its heritage, the company still suffers from a management style rooted in the past, best illustrated by the three monkeys: “Speak no evil, see no evil, hear no evil.” A change in company culture is definitely called for. What is the good of a skilled and stable labor force if the resource is not used? Since such a cultural change requires top-down motivation, once enacted it will eventually filter down to the fellow that sweeps the floor. The value of allowing each one to take ownership of the process allotted to them is incalculable. The creation of suggestion boxes and feedback loops demanding incremental improvements to both operational and systemic issues is the “lowest hanging fruit” for picking.
Once I looked at many of the operational activities and had discussions with the people involved in them at all levels, guess what? All the knowledge required for improving all aspects of the operation is in house. The problem always is where to start this process and where to find the time on a daily basis.
The lack of modern processes and equipment, as well as a huge waste in material handling and space, clearly required an investment. I could show that several stages of space consolidation due to a vast reduction in throughput times, modern machinery, paybacks of 18 month or less on the investments made are possible. Apart from that, the required costs reductions now dictated by the market could also be achieved. The market of plenty we have seen until recently is gone for a very long time if not forever. The new paradigm regarding value and cost now experienced thanks to the recession is here to stay even as things get better. The only constant is change.
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