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January 2021 #13258 Page #45
Hazards with Some Advisements for New Investments
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Todd Drummond hen looking for new opportunities for improvements in your operation, it is quite natural to ask for advisement from outside your company to give you a better perspective. Who you should trust to help you take your company to higher performance is not as clear cut as it may appear.
Costly decisions based on board-foot per man-hour (BF/MH) labor savings – One should be very leery of any sales representative using BF/MH to convince your company to purchase equipment for labor savings. There are many ways to measure productivity, but one of the most inherently flawed is BF/MH. TDC has the math to prove unequivocally improving the rate of BF/MH can have the result of reducing your company’s overall net profits. This statement warrants repeating. A company using BF/MH as the primary means of measuring productivity in wood truss manufacturing can create a system that produces less, not more, sales and net profits. The math is so clear and straightforward that most people are quite embarrassed or upset by their previous deeply held beliefs once it is explained and demonstrated. (The BF/MH math is explained during paid consultations only.) Focus on overall sales produced and don’t get fooled by promised labor savings. Damned if I do, damned if I don’t – One of the many duties I perform is giving my clients the pros and cons of vendor services for both equipment and software based on other clients’ statements and results. The purpose of this is to provide the most up-to-date information for the client to make the most informed decision. TDC does not receive any referral fees and does not have a bias preference of one vendor versus another. Still, there are times when one vendor seems to be a better fit for a client’s particular needs, and this might not be their current supplier. This then creates thorny problems for my services with the vendors when I point the client toward the other’s services. The client’s current vendor will inevitably find out that TDC had something to do with the decision process and be highly resentful because it takes away their current and possible future business. One would think that the new supplier’s salesperson would be grateful for the assist, but that is not always the case. Continued next page
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