Words of Wisdom and Inspiration for the aspiring entrepreneur from Frank Covich, Founder of the National Association of Independent Business Brokers (NAIBB)
by Frank Covich
A Business Consulting Story
Years ago my consulting pals and I swooped down on this company named McCabe Powers. We did so in an effort to study manufacturing processes, management training, inventory control, production planning, scheduling and a host of other business issues, all with the goal of reducing costs and improving profits. The corporate financial people had become aware that if they did not do something drastic their business of 42 years would tank.
Around 1973 the company’s new president, Ed Powers III, was lost as to what to do about his managers, a number of whom, though they had worked all of their lives, had little supervisor training, while a number of others were related to the owner and wandered around each workday like sheep in the field. Ed had problems in every area of the business, everything from order bidding and inventory control production to training and human resources and more.
A sharp representative of our consulting group had actually found the owner of this amazing company. The founders were the first to make horse-drawn funeral wagons, and there expanding products went on to become much more elaborate. Our sales expert made an introduction and then a proposal to have us study the issues, look into solutions and report back to him and his Board.
Unfortunately, the whole concept of “How can we make things better?” was not in the purview of their current management team. Machines were breaking down, but no one in a supervisory capacity even understood how to correct many of these failure problems. Additionally, operators oftentimes bullied the supervisors because the supervisors did not know how to run very old machines, let alone know how to fix them, especially when they broke down for “unknown reasons.” All of these factors and more meant we needed to take a serious look, and we needed to consider the fact that just maybe the machines were not breaking down as everyone thought.
I was assigned to the production floor, which included more than 200 machines. We studied what was going on and within a week we had a game plan. One thing I noticed as I stood on a second-level deck over the production floor was the absence of many sounds coming from the area. These were noisy machines and what I noticed was that many were not operating. I took the president to the deck and said, “This is the problem. More than 200 highly paid production workers should produce more noise, it’s that simple.”
I said, “I will fix this in two weeks.” He was in shock.
I then gathered the supervisors and gave them a clipboard to put on each machine, and we asked the workers to check off when the machine was down and why and for how long. One at a time we got the analysis on each machine and soon discovered some of the big reasons things were not working properly. Number one was each operator was required to constantly check a “size tolerance” on each production product as the product came out of the cutting oil, and each piece needed to be wiped clean.
The discovery was that the operators would turn the machine off and walk around trying to find a rag. We discovered rags came from a tool cage and the lowest paid person in the place ordered the rags sparingly. They would constantly run out of simple cleaning rags. Highly paid machine operators would just wander around and try to see if anyone had an extra rag. Many times they would be down for over an hour trying to clean off a milled item before they continued.
My solution to this critical issue was so simple. I had the president call the manufacturing manager to his office, and he was instructed to purchase a large inventory of grease rags. Then we had the tool/supply worker come in two hours earlier each day and put a bag of clean rags at each machine.
The amazing result was that production grew instantly because the operators had no excuse to turn the machines off and wander. We went back a week later to the platform overlooking the production floor so we could show the president the amazing difference in shop noise. The machines were pumping out parts and production grew quickly. In fact, the production over six months grew by 37%! Keeping the business going using this one cost-saving measure alone earned us Ed’s eternal gratitude, and we became great friends. This issue had been taking a toll on productivity for years, and we fixed it.
I stayed there for over a year and became well respected, and I had a great project for our business consulting organization under my belt as a result. My cost-saving ideas got me a promotion and propelled my career in manufacturing consulting.
Given this experience, my message for today is that even if you have a small business, little things can make a huge difference. Look at the steps you take every day that may be costing you money. Make the jobs involved easier and more efficient where you can. People want to be productive. Get someone to look at your business and audit your practices and procedures once in a while. It will be money well spent. Get opinions. Make a list. Try new ideas and approaches, and help your business to stay lean and mean, running like a top determined to waste no time.
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All the best,
January 11, 2019