| This article reprinted from Wood & Wood Products, January 1971
COST REDUCTION: THE NAME OF THE GAME
1971 Editor's note: Wood & Wood Products is pleased to introduce a new, regular monthly feature. We hope you like it as well as we do.
To introduce the author, Jerome L. Metz was the president, from 1948 through 1965, of the Metz Furniture Co., Hammond, Ind. He has worked in every phase of operations throughout the entire plant. He holds an MBA degree from the College of Business Administration of the University of Chicago, and since 1948, has been a director and officer of the National Association of Furniture Manufacturers. Since 1966 he has been a consultant to Metz Furniture Co. and is now a consultant to a limited number of medium size manufacturers, including Wood & Wood Products, which manufacturers a medium-sized package of industry information every month. His particular interest: producing top line furniture at minimum prices in smoothly operating, safe plants.
As an industry, we have high costs, low profits or no profits and price levels that are apparently too high. No wonder our customers, like the college kids, are protesting. They want a better product for the same dollar, or less. But how?
Cost reduction is the name of the game and there's room for everyone to play!
Certainly, you have already carefully analyzed your cost of spoilage, of rejects, rework and returns, and you are aware of your loss percentage in each category. Upgrading even one of these categories means added volume, minimum rejects, avoidance of rework and its usual overtime plus additional material; it means reduced office detail to answer complaints and an appreciable drop in returns. We're certain to welcome the change, knowing the greatest result will be enhanced customer relations. Once your customers learn it is easy to do business with you and begin to extol the virtues of your product, you're in like Flynn.
For the purpose of this discussion, let's assume you have a perfect product design, excellent engineering and facilities, and you can reduce costs only via the upgrading route.
Step one requires a change in the chain of command &emdash; one significant change in the typical organization chart.
Please note that the inspection department reports directly to the plant manager, and not to the superintendent. The reason for this change is a simple one: We want production people to produce. Reporting of completed and accepted production should be done by inspectors in accordance with specifications and agreed quality standards. Reporting and all its necessary paperwork should be removed from the production office. Foremen should spend every minute on the job, not completing forms.
Now quality becomes the central issue. Experience has taught us that instead of fewer units produced, we actually receive more.
Daily schedules are set up in each department where every employee can see the requirements. They soon learn that they not only must meet the schedule, but that quality is the big word and that both production and quality means an efficient operation. Bonuses and profit sharing mean money in the workers' pockets and it's a rare bird that thinks there's something wrong with that.
The second step places the role of chief inspector in equal staff position with the plant superintendent. The salient requirements for the position of chief inspector include complete knowledge of plant, product and procedures ... and capability to handle people. A cool student of the task with full authority for quality control, he should have been a foreman or supervisor before his promotion. He should be capable, also, of suggesting changes in product design, construction, methods and anything else that will make a better, more easily produced item.
Should finish be involved, he will be required to keep a sharp eye on color control, as well as the TLC (tender loving care) that must be added to the finish after you think your finish is the best.
If plywood manufacture is involved, he will handle all checks on this department. Though adherence to part drawings and reporting of accepted production is the main duty here, he should also detect waste abuses, and count all overages and shortages and report these to the biller, so no time is lost if a significant shortage is apparent. Likewise, overage must be counted in the next job cut. Any unusual shortage should be immediately reported to the chief, with a detailed explanation of all reasons. Copies, initialed by the chief, should go to the foreman, the superintendent and the plant manager.
Do you like smart, sharp women? They're perfect to complete the inspection team, with one for each major department (except such obvious ones as machining) such as assembly, fitting, finish, upholstery and final acceptance. The women chosen should be quick, sharp-eyed and have the ability to work independently. You will soon discover that women make, by far, the best inspectors.
They should also be responsible for recording the accepted production in their respective departments. But final checking is not all of their job by any means. These young members of the upgrading gang move through the entire department, checking at each point of the operation for accuracy, complete adherence to standards, and report any shortages or problems of any kind.
Should there be too much detail in a large department such as cabinet assembly, it may be necessary to employ one roving and one final inspector.
All inspectors will be paid for their ability to keep the upgrading kick on the move, constantly stopping the making of a reject at the source. In other words, stop that mistake before it starts!
Incidentally, appropriate signs all over the plant do help.
A word about the final inspector. She should go over every unit with extra care, boosted by the chief inspector who will check with her many times during the work day. She should sign the appropriate warranty or inspection tags or certificates.
It is also a good idea to have weekly meetings of the entire inspection team with the final inspector, who should prepare a written report for the meeting. Here all problems, since the last meeting, should be reviewed in detail.
The chief inspector should regularly meet with the plant superintendent and manager and the production control manager to review the entire production and quality picture. They should personally inspect any returns or unusual failures of any kind. The sales manager may well get into the act here on many occasions and should represent the customer attitude all the way.
To sum up with a single word -- UPGRADE. Your costs will drop, your customers will find it easy to do business with you, and best of all, your product will stand out and speak out for itself.
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