Here are a few examples of how the Profit Pillar has been used during executive Creative Meetings facilitated by Les Cowie Consulting consultants. The book, “Getting More with Less” explains how The Profit Pillar is used. CEOs set up Creative Meetings to review all functional areas of their organization layer-by-layer and examine the 20% of items and processes that contribute to 80% of performance and costs. The book provides examples of questions that lead executive teams to look at performance, cost and time from creative perspectives that typically yield stunning innovations as you will see from the examples below…
Examples of Creative Meeting Successes
Here are some examples of organizations who implemented the “The Profit Pillar” approach when faced with stakeholder pressure to improve performance. Organization names have been withheld because of confidentiality requirements.
Textile Organization
The Chief Executive Officer of a textile company was under pressure to deliver improved profit performance and increase dividend after a major venture capital investment in a company producing curtain fabrics for interior decorating.
The factory was new. It was located in an area with plentiful unskilled labor. The limitation was that this unskilled labor lacked English reading skills because of a poor, government operated education system. The technology was the latest available weaving equipment – a major investment in order to produce high quality fabric at high throughput rates and very competitive costs. The company had been operating at a break-even level for two years and stakeholders were becoming anxious about a lack of penetration in the marketplace because of high prices.
The CEO decided to try the Creative Meeting approach. He started by taking his team on a three-day retreat. On day one, the leader was an outside facilitator who provided a workshop on ‘How to Think Outside of the Box’. It was a fun session with individual and team competitions to come up with crazy creative ideas on simple topics. It lowered resistance to change and got people pumped for day two.
Day two was led by Les Cowie of Les Cowie Consulting, LLC. It started with a humorous, animated video of the The Profit Pillar. The objective of the day was to identify those functions with the highest levels of cost and the lowest levels of performance. Breaking into small groups consisting of a function executive and managers from different departments, the teams immediately got into discussions on each of the layers of the The Profit Pillar
Each function executive then presented his team’s findings in a feedback session.
The following perspectives emerged:
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Revenue was impacted by insufficient sales
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Sales were impacted by pricing at uncompetitive levels
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Prices were impacted by high costs per yard of fabric
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The 20/80 discussion of the causes of high fabric costs per yard produced these reasons:
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low throughput from the weaving plant
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a high rate of stoppages in the mill
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long lead times to fix the cause of stoppages
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insufficient qualified maintenance technicians
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very high costs of qualified maintenance technicians because of high demand and low availability
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high fault rates with high rejection of finished fabric rolls (38% rejection rates)
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low throughput rates averaging only 48% production of acceptable quality fabric per shift
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limitations with training unskilled labor because of language and literacy restrictions
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Raising prices was not an option. Cutting labor costs was not an option. The weaving mill certainly could not operate with fewer certified maintenance technicians or fewer machine operators? – OR COULD THEY?
During their break, many team members walked around the room staring at the notes on their flipcharts sheets and comparing notes from the flip chart sheets of the other teams. The facilitator built a summary on the large white board at the front of the room.
In the next session, teams looked for ways to think out-of-the-box and came up with some surprising results.
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The problem was one of quality throughput per hour and not so much one of cost per hour.
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Improved throughput in the plant to yield a lower cost per yard of fabric required:
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Less downtime
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faster fixes
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less fabric faults with lower reject rates
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each shift required more maintenance technicians (from where)
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every weaving machine operator required better training to understand:
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the weaving process
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correct machine operation
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fast fault identification and correction (see the symptom BEFORE the fault and prevent the fault before a costly rejection)
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The teams then turned to the elements of throughput and cost in the weaving mill. They identified:Technical Stoppage Issues[1]
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20% of the machine setups were required 80% of the time
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20% of the causes of stoppage occurred 80% of the time
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20% of the weaving machine parts were needed for fixes 80% of the time (and yet these were frequently out of stock in the mill’s parts inventory)
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80% of the time, machine downtime was elongated waiting for technicians to fix other downed machines
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Weaving Stoppage and Fault Issues1
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20% of the fabrics were demanded by sales 80% of the time
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20% of the yarns needed to produce these fabrics was needed 80% of the time
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20% of the weaving machine set ups requiring weaver performance were needed 80% of the time
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20% of the faults happened 80% of the time.
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The teams came up with the following creative solutions:
Technical Stoppage Issues
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Promote some of the best experienced weavers to the position of Weaving Machine Technician
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Produce web-based video training programs for each of the 20% of machine set ups that were required 80% of the time.
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Produce web-based video training programs for correcting each of the 20% of machine stoppages that happened 80% of the time.
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Produce the videos in the language of the operators
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Provide access to equipment off line to allow practice in the 20% of set ups and stoppage corrections
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Identify the visual and tactile skills needed to perform the servicing and maintenance tasks
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Develop simple simulators to allow practice in the physical skills to build strength and speed
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Include training in the 20% of English technical terms and phrases that were needed 80% of the time.
Perhaps the most creative idea of all emerged in the concept of implementing Red Cap and Blue Cap teams for each shift. The newly trained Weaving Machine Technicians were required to wear blue caps. The experienced Weaving Machine Technicians were required to wear red caps. Blue cap technicians were trained to approach a stopped machine and perform a mental checklist of the symptoms to identify the exact cause of the stoppage. If the stoppage was not one in which they were trained, the blue cap technician raised a red flag on the machine. The red cap technician, now with much more time on their hands immediately responded to get the machine weaving again as quickly as possible.
Blue cap technicians were taught a Patrol Pattern and Inspection Sequence where they walked in a pattern around a group of machines assigned to them looking for symptoms of developing faults, finding and fixing them before they became a costly stoppage.
Weaving Stoppage and Fault Issues
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Produce web-based video training programs for each of the 20% of fabric set ups that were required 80% of the time.
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Produce web-based video training programs for correct operation of the weaving machines
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Produce the videos in the language of the operators
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Provide access to equipment off line to allow practice in the correct operation of the weaving machines and the correct methods for the 20% of fabric set ups
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Identify the visual and tactile skills needed to perform the servicing and maintenance tasks
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Develop simple simulators to allow practice in the physical skills to build strength and speed
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Include training in the 20% of English technical terms and phrases that were needed 80% of the time.
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Teach weaving operators a Patrol Pattern and Inspection Sequence so that they keep on the move in between the weaving machines assigned to them to anticipate faults, recognize symptoms of developing faults and correct them before the fault becomes a costly reject.
The Results
Improvements to Technical Stoppage Issues
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The company then trained Weaving Machine Technicians in six weeks instead of the five-year industry apprenticeship (of course, only on the 20% items. The remainder they learned over time through experience).
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The number of Weaving Machine Technicians increased without increasing the technician payroll cost since some overpaid technicians left the company.
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Excellent Weaving Machine Operators received promotions and training as technicians. This increased the take home pay for ‘unskilled’ workers.
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Machine stoppage times for technical reasons declined drastically.
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Faulting caused by incorrect technical settings was almost eliminated.
Improvements to Weaving Stoppage and Fault Issues
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Faulting reduced dramatically so that the weaving mill delivered more units of quality fabric per shift than ever before.
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The Patrol Pattern and Inspection Sequence with its reduced incidence of faulting allowed mill management to assign an expanded spread of weaving machines per operator. This reduced the number of weavers needed per shift with a resulting reduction in the weaving mill payroll.
Overall Improvements to the Organization
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Weaving Mill throughput increased from 48% per shift to an average 82%.
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Unit cost per yard of fabric for the high demand fabrics decreased
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The ‘Price per Yard’ was reduced slightly to be much more competitive. Consequently, the price yielded a larger profit margin per yard
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Company profitability progressively improved
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Stakeholders were delighted with the dividend checks they started receiving.
Automotive Company
A U.S. automotive manufacturer was faced with trying to beat the competition with better vehicle design and pricing. The Head of Engineering set up creative meetings with the heads of all functions. The major questions they addressed were:
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How to reduce the time it takes to design new models?
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How to reduce the cost of new vehicles to allow competitive pricing?
Creative Sessions’ Findings
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How to reduce the time it takes to design new models?
The teams found it was possible to create design templates for use not only by the manufacturer’s Design Teams but also by their company’s Tier 1, Tier 2 and Tier 3 Suppliers who were using the same 3-D modelling software.
Many of us use templates. If you’ve designed your own website, you’ve probably selected one of the templates provided by your chosen hosting service.
To simplify the explanation, think of it this way. Every design has a commonality for settings. Widths, lengths, circumferences, etc., that may change from design to design for different types and sizes of models. For example, a fuel injector is a fuel injector. The size and shape of a fuel injector may differ from vehicle to vehicle but each fuel injector contains similar components and shapes.
The teams analyzed the long list of shapes and specifications for components in their vehicles and found that almost 20% were reused 80% of the time. Instead of starting from scratch to design a new fuel injector, a design engineer could pull up the master template for fuel injectors, adjust some settings and have more than 50% of a new design in seconds rather than days. The design engineer was then able to make the necessary changes to produce a final design to fit the required vehicle packaging.
Component and overall automotive modelling times were reduced by more than 40% not only in the manufacturer’s design shops but also in the design shops of their Tier 1, Tier 2 and Tier 3 Suppliers. For example, the manufacturer could share their designs with the Tier 1 manufacturer and supplier of the required fuel injector. The Tier 1 designers no longer had to start from scratch to replicate the vehicle manufacturer’s design. They could immediately start with the manufacturer’s design, proceed to model the required parts and submit them to rigorous digital stress testing before manufacturing prototypes in a fraction of the time. The same process applied to Tier 2 manufacturers who had to provide parts, like rubber seals, for example, to the Tier 1 manufacturer.
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How to reduce the cost of new vehicles to allow competitive pricing?