Constant, Never-Ending Improvement Builds Net Worth
by:
Don Morrison
Background
Gordon manufactured two styles of fiberglass boats: one for water-skiing and pleasure, the other designed specifically for bass fishing. Both boats were manufactured on the same production line, switching between the two models as orders and demand shifted.
Problem
Business was booming. Obviously, that's the goal of any business so long as you can fill orders promptly. They were selling boats as fast as they could make them, about two boats per eight-hour shift. So they added a second shift running from 4:00 pm until midnight. At first, this second shift was unable to finish two boats per shift but caught up after several weeks. Nonetheless, production was still not meeting demand.
The Solution
Eventually, the night shift needed a new foreman. Gordon hired a rough-hewn character who came with high praise from his last boss. After getting acquainted with the process, he asked his night crew to think of ways to do the job easier - not faster. The men volunteered several ideas for doing the job with less hassle.
About this time I was retained to assist with the production lag time. Using The Profit Process, we met with the two shift foremen and explained the need for a simple means of communicating productivity to the workers. The next day, the new night foreman spread a large length of butcher paper across the wall in the factory. When the night shift came on duty he asked the day foreman how many boats they had made that day. The answer was "2." Without a word to his night crew, he scrawled a large '2' on the butcher paper. That night his shift completed two boats and he marked that '2' opposite the first one. The following day he again asked the day-shift foreman for their production total and noted another '2.'
After several days of logging in 2's for each shift, the night shift workers announced that thought they could complete three boats that evening. They did just that and a large '3' was marked on the wall. The day shift then logged another two-boat day, but the night shift topped it with another three-boat evening. But after a week of being outdone by the new shift, the day workers began producing three-boats as well.
The men developed more ideas for improving both the manufacturing process and the products. Gradually, over just a couple years, production grew from two boats per shift to six boats - all duly noted on the wall chart!
The Result
Due to the continual increase in both product quality and productivity, the business thrived. Eventually the business built a larger factory and added another line of boats. Finally, the business was sold to a national firm to fill in a geographic gap in its coverage and Gordon retired. In two short years, increasing his productivity had increased the valuation of his small business beyond his expectations.
Commentary
Having a visible and simple metric for product and process improvement is a powerful stimulus. Given an opportunity, line workers and foremen working together know best how to improve the product, the process and Leadership Development of Small Business.Constant and never-ending improvement is the key to prosperity in all businesses and the ultimate key to customer satisfaction and financial rewards.
About the Author:
Author Bio
Don Morrison of The ProfitProcess consults small business owners on making a business more profitable,
Business Valuation Resources,Valuation of Small Business,
Small business development,Small business value development, Leadership Development of Small Business, Working Capital Generation Improvement.
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