This might be happening in your organization and you don't know it, but if you knew, you could do something about it.
And add some extra money to your company's P&L.
This is a quick story of a middle size manufacturing plant where they make metal panels. In a real quick summary, they stopped losing $ 220,800 per year, that in the beginning they didn't know how they were losing them, but that is not the biggest point though.
Last year we worked with an organization that manufactures metal panels and other parts, located in Pittsburgh PA.
The plant produces 72,000 panels each day, it employs around 200 employees on a three-shift operation, with 30 supervisors, and 7 shift superintendents, and a plant manager.
When we were brought into the situation, they shared the following issues that they wanted help with:
a) The Low quality of the panels was being a frequent topic in their quality meetings.
b) Preventable accidents were appearing on their monthly reports as a rasing issue.
They had done all that their leadership had told them to do:
Reviewed and implemented procedures and work instructions
Held meetings to tell people what they had to do
Reprimanded people that was not following instructions and tried enforced commitment to them
But yet, no results were happening
It took some high dedication to observe their way of following processes, and see from a different perspective, looking for the invisible but critical. It takes time to do that but it had some amazing benefits.
Assessments and observations on performance effectiveness showed that much of the poor staining of panels was caused by machine operators who were not closely watching their machines or were careless in the setting of the machines. Although most operators knew how to operate the machines properly, they had developed some poor work habits.
The second one was a little easier. Many of the preventable accidents occurred because of poor housekeeping. For example, carelessly stacked panels and boxes would fall over onto an employee, or an employee would slip on a floor that had not been properly cleaned.
It was clear they needed their employees to gain a better understanding of how their work was related to all these problems.
Based on our workshop's tools, we designed for them a transformative training program around the following key topics, and developed their supervisors and managers to have better interpersonal skills for their job:
Discussing quality problems with employees
Recognizing improved performance
Conducting follow-up discussions
Mentoring employees on the job
Discussing poor work habits and attitudes with employees
Recognizing above the average performance
All participants developed an awareness of values and beliefs that they did not have before, resulting in improved work habits, attitudes and behaviors that applied in all critical problems impacting in a positive way all of them.
Summary of the Financial Impact After the Program
This is how their Profit & Loss statement changed after all this experience:
a) Quality of the panels improved from 2.0% to 1.2%, generating an extra $172,800 per year
b) Housekeeping policies were implemented and Preventable accidents reduced the expense in this concept in $48,000 per year
Total savings: $ 220,800 per year
No business nor organization has perfect operations, this is idealistic and far from real life.
You like everyone else, also have "quality issues" and "preventable accidents", you just refer to them in different ways, depending on the nature and industry of your organization.
My question to you is:
These middle size company was losing around $ 18,000 every month.
How much would you say you are losing for a similar type of issues?
Take a quick minute to think your answer through, it might be a huge benefit to your organization.
And the major final lesson in this experience could be this:
Not only the workers but also many executives and leaders in this company were careless and had also developed some poor work habits, thinking these loses were somehow "the cost of doing business".
After some structured conversations and an eye-opening workshop, they learned how to see their operation from a different perspective, what used to be "the cost of doing business" for them, now could be wastes and expenses that can be avoided if addressed properly.
Could a change of mindset like this be of help to you and your organization too?
*For more detail on how these issues were resolved, you can read our executive report clicking in: