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Does Your Truss Plant Have Thousands of Dollars in Off-Line Obsolete and Unused Equipment and Parts? Do you have excess Plate Inventory?
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January 1st, 2016 #09198 Page #20
Todd Drummond Consulting LLC.
Overcoming Obstacles and Profiting with a New Perspective
www.todd-drummond.com Phone: 603-763-8857 todd@todd-drummond.com January, 2016 Copyright © 2016 Industry’s averages for net-profits-to-sales ratio: • Below average – 0% to 9% • Average – 10% to 12% • Common to see – 13% to 19% • High return more common than most know – Greater than 20% (No B.S.)
Todd Drummond Todd Drummond Consulting www.todd-drummond.com
Do you know how well your company did in comparison to the average? Perhaps you are not privy to such information, but maybe you know that things need further improvement. If improvement is actually your goal for this new year, maybe you should consider doing something different instead of repeating the same processes and expecting different results. Everyone should ask, “What are some of the things that prevent serious improvement from happening within my group?” Time and/or money are excuses many offer as the main reasons for not trying something different. Others say, “I need to find the right individual(s) to move us in the right direction.” If you feel these are your main obstacles, your company is more than likely going to continue repeating the same patterns and garner the same results it has always achieved. So what is preventing any company, department, or individual from making real, positive changes to garner better results? There are two main obstacles that must be overcome: pride and admitting you don’t have all the answers. According to psychology studies, “Modern cognitive theory states that people tend to perceive reality in light of pre-existing expectations and will ignore large amounts of contrary data before finally changing their minds.” In other words, we perceive the world the way we want regardless of the evidence showing it differently. Why is this so often the case? The answer is simple but hard to overcome. In one word, it is pride. We cannot see that change is needed, or if we do indeed recognize the changes needed, our pride blinds us and prevents us from admitting it. We allow our pride to perceive everything as being right or wrong, as if by admitting that a change is actually wanted or needed, we are saying, “We were wrong and they were right.” This is an absurd way of viewing life in general. What worked in the past was a good thing, but evolving to meet the challenges of today does, in fact, require us to make changes and see things from a new perspective. To embrace better ideas, one needs to set aside pride and actually listen to others with a different perspective and experience. I can tell you from experience that I have seen the results, time after time, and that making positive changes garners significant net-profit gains that many are simply blind to. Had they implemented the changes without an outsider making the suggestions, they would indeed have gotten the same results, but they had roadblocks of simply not knowing and/or pride that prevented them from admitting that the changes were needed. What are some good resources to start educating yourself and learning new ideas? Reading or listening to audio books is always a good starting point. Examples: The Goal by Goldratt covers theory of constraints, any of the Dale Carnegie publications covers better management practices, and any books covering lean manufacturing will assist process improvement. Also, seminars at your local colleges and online training on the above topics can help. In other words, start by looking outside our industry for better practices! An all too common, repeated mistake everyone seems to make is to only listen to the equipment and plate vendors, but how effective has that been going for you? Yes, many of you feel that you have developed a close and trusting relationship with them and they have witnessed many different operations. But be honest with yourself and ask, “When the last time any of the vendors told you that you were making serious mistakes and really challenged your current practices?” The answer is never. The last thing they want to do is possibly threaten a future sale. Also, they tend to go with the latest popular practice that some of the so-called industry leaders are embracing without truly understanding the pros and cons. A disheartening example of this is witnessing clients explain how their three-man assembly team easily outpaced their very
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