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Component Manufacturing dverti$ dverti $ er
Don’t Forget! You Saw it in the
Adverti$$er
December 2022 #14281 Page #26
Proof That Even the Largest Wood Truss CMs are Not Immune to Losing Tens of Millions of Dollars with Outdated Reporting espite the fantastic profits these past few years, some of the largest wood truss component manufacturers (CM) are losing tens of millions of dollars hidden in plain sight. Talk to any of the executives at these CMs, and they will be able to rattle off the EBITA or other P/L results, yet they are blind to simple basic production accounting numbers they see daily. In this article, I will prove that some companies are losing tens of millions because of outdated, standard industry-accepted productivity reporting methods.
Todd Drummond
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An interesting fact from studying zebras in Africa is very applicable to this topic, and it has to do with what happens when someone stands out from the crowd. For their study observing the behavior of single zebras within a herd, the zoologists quickly discovered they would lose sight of individual zebras because their stripes rapidly blended in with those of other zebras as they moved around. The researchers used a paintball gun to mark the zebras they wished to study more closely. This marking of individual zebras, however, proved detrimental to the painted zebra’s health as the lions quickly chased them down and ate the marked zebras. By making the animals stand out from the herd, the lions easily singled them out, focused the pride’s attention, and encircled and captured the marked zebras. Any Ph.D. Organizational Behavior trained person will tell you this is the same behavior for human beings—don’t stand out from the crowd unless you are willing to risk being eaten. When someone is involved in sales long enough, this is one of the most troubling factors to learn about the decision process. Too often, the decision for a person to agree to a sale (purchase) is not based on the best decision for a company but on the choice considered the safest. The person may feel that another vendor has a much better service or product, but they cannot take the chance and must protect themselves from being called out for taking an unnecessary risk. The larger the company, the more these practices or making the “safe choices” are in play. The same thing applies to stupid, repeated practices mandated within a company. Everyone will follow what is required, no matter if it costs the company millions of dollars and is counterproductive to the profit of the company. Only those willing to risk losing their jobs would dare to speak up. Please keep the “standing out from the crowd” and “risk decision process” factors in mind as you continue reading. Other people have witnessed the same thing I have for many years but have failed to make the needed changes. As an industry process expert, I can attest that I have witnessed very large corporations losing tens of millions every year based on standard industry-accepted productivity reporting methods year after year. Here’s the proof. Continued next page PHONE: 800-289-5627
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