If You Measure It, They Will Come

Just like a movie out of Hollywood, as you walk through your vacant design office, your silent shop floor and your lumber storage area, you can hear them whispering, “if you measure it, they will come.” Besides being a little spooked out, you’d probably be left wondering: “Measure what?” and “Who are they?”

This year’s BCMC education sessions focused on answering those two questions. From looking at ways to implement lean manufacturing, to making good decisions when purchasing lumber, panel experts provided a lot of guidance to component manufacturers on what they should begin quantifying about their business. The “they” was the same in every case: cost savings.

What Is Lean Manufacturing in Today’s Economy?

Bottom Line: Lean manufacturing can be applied to any and every department in the component manufacturing business, from design to production. The key is to create sound metrics to measure what’s being done now and how much it costs.

“No matter how good you are, there is always room for improvement,” says John Herring, CEO of A-1 Roof Trusses. “However, you can’t really know your costs, or your production efficiency, until you measure it.” Herring joined panelists Joshua Bellows, Operations Manager for Hundegger, USA, L.C.; Joe Hikel, Chief Operating Officer of Shelter Systems Limited; and, Dan Holland, President of Clearspan Components, Inc. to give a session sharing tips on how to identify and implement lean manufacturing concepts in component manufacturing.

Coming from companies both large and small, they shared their struggles and ultimate successes in identifying and employing lean manufacturing, and they all agreed it started with measuring the status quo. “The first step is creating a game plan,” explained Herring. “That plan needs to quantify everything you do and measure how much every aspect of your business is costing you.” Only then can a component manufacturer begin to identify areas where improvement can be implemented effectively.

One key aspect panelists discussed was the idea of identifying and minimizing the number of people who have to touch a particular area of the business. “While the general consensus is that the shop isn’t the problem right now because it may not be running at capacity, you can still be losing points because your production process is inefficient,” said Herring. Panelists warned that just because the job is getting done on time, it doesn’t mean there weren’t areas for improvement.

“An example I shared was the difference between batch and linear production,” said Holland. He pointed out that most component manufacturers currently use a batch approach in their production due to machine setups and personnel. However, a linear approach can have a significant advantage under the right circumstances. “In a linear approach, each production station completes one item and then passes it on. This limits down time at the other stations, reduces bottlenecks and can dramatically decrease the overall amount of time it takes to complete one unit of product.”

Panelists also suggested evaluating the layout of the production facility. “Certainly, there are going to be some constraints in what you can do in an existing building when looking at moving equipment around,” agreed Hikel. “But within those parameters you may be able to identify ways where you can improve the movement of materials and product through the production process.”

“Everyone in business right now knows you have to be cost competitive,” said Herring. “The only way you can do that and still make money is to minimize your overhead, ensure your raw materials are purchased at the right price, and make your team work as efficiently as possible.” The cautionary tale there, panelists warned, is to make sure you’re not asking too much from your employees, otherwise you could end up burning them out and losing efficiency through having to hire and train new employees.

“Another good question we had from session attendees was how do you measure and quantify your design department,” said Hikel. He pointed out, “In the present economy, builders are asking more of component manufacturers, which can put a strain on capturing the true cost of a given job.” That issue was partly addressed through another educational session at BCMC focused on design departments.

Best Practices for Design Departments

Bottom Line: One of the biggest areas of risk and reward for a component manufacturer is their design department. Regardless of whether it’s one technician or 20, it is important to constantly evaluate and strive to improve the level of education and training of the entire design team.

“Companies take on a great deal of risk through their design departments; it’s inherent to the structural component manufacturing business,” explains Bob Dayhoff, Director of Technical Operations for Shelter Systems Limited and one of the panelists for this session. “That’s why it’s so important to ensure your designers take advantage of all their opportunities for training and education.”

Dayhoff joined panelists Lecil Alexander, Professional Engineer at Universal Forest Products, Inc.; Amanda Metzger, Truss Designer at The Truss Shop; and, Kevin Riesberg, Director of Design for Plum Building Systems, LLC for a session discussing the ways in which component manufacturers can get the most out of their design departments.

These panelists represented a diverse range of design departments, from very large to very small, but they all had one message in common: training is key. “There are such a wide variety of training resources available to truss designers,” explained Dayhoff. “From code books to technical articles in SBC Magazine, SBCA online training to technical help from the truss design software suppliers, all of these sources can provide valuable information that can help a designer make more effective decisions.”

The panelists agreed that effective decision-making is particularly important during the bid process. “You want your pricing to be competitive, but it has to first be based on accurate information,” said Dayhoff. “During the bidding process you need your designers to avoid mistakes, because those mistakes are what can come back and make the job cost more than you expected.”

One area the panelists identified that was of particular concern was keeping up to date on changes to the building code. Another area of concern was knowing the ins and outs of their truss design software. “The software technical support and engineering staff are a great resource,” said Metzger. “They are more than eager to explain any aspect, from walking you through why a particular truss configuration isn’t working, to how some of the advanced features in the software can make design faster and easier.”

Metzger pointed out that it is hard to motivate designers to pursue all of the available avenues of training on their own. “The key is to create an environment that encourages continual growth in their development as a designer,” explained Metzger. “Not everyone comes into truss design with an engineering background, so it can be a challenge to get them out of their comfort zone.” However, panelists argued pushing development through continual training can pay dividends for the designer and the company.

“The more you know about the code and the software, the easier your job becomes,” said Metzger. “As a designer, efficiency and accuracy should be your two most important goals, achieving these will allow you to do more work in the same amount of time, without increasing errors.”

Dayhoff added, “additional training costs money and time, but it’s an expense that can keep you afloat in this economy, and set you up to thrive as things improve.” An additional area where a higher up-front cost may end up saving significant money down the road is lumber purchasing, which was the subject of another BCMC seminar.

Making Informed Decisions About Lumber

Bottom Line: Several factors can impact the quality of wood, including species, region of origin, and mill. Component manufacturers should consider all of these factors, beyond just price, in evaluating the lumber they purchase because low wood quality can have significant hidden costs.

“Every component manufacturer can benefit by understanding where their lumber comes from, and the particular qualities of that lumber,” said Steve Harms of Weyerhaeuser. “Ultimately, that knowledge can assist them in purchasing the right lumber for their particular needs.”

Harms joined panelists Steve Hardy, Proprietor of Woodpro Consulting; Joe Castleberry, Sales Manager for Beadles Lumber Company; and, Jack Littfin, President & CEO, Littfin Lumber Co. to host this session. With more than 100 years of combined experience in the industry as component manufacturers, lumber suppliers and expert consultants, they focused on what component manufacturers need to be thinking about in order to make good lumber purchasing decisions over the years to come.

Littfin pointed out why component manufacturers like him are so concerned about quality: “It was getting to the point where I was removing 15-20 percent of the SPF I was purchasing because it was unusable.” The problem, Littfin explained, was that most of the unusable lumber wasn’t discovered until after it was cut and ready to be used in assembling a truss. As each piece had to be cut from a fresh stick of lumber, the rest of his production employees were left with nothing to do. “So much time was being wasted because of poor quality, which cost me a lot more in the long run than if I had paid for higher-quality lumber in the first place,” explained Littfin.

Just as in the process of implementing lean manufacturing, the component manufacturer needs to be able to quantify what an improvement in lumber quality would be worth. “The lumber purchaser needs to make a conscious decision to weigh quality and price,” agreed Castleberry. “If they end up with less waste and shorter cycle times, it may be worth the higher lumber cost.”

Castleberry pointed out that service should also be a factor during periods of low production, “When things are slow, manufacturers can keep costs down by having less inventory on hand. But that means when a job comes in, you need the mill to deliver the lumber quickly.” How much are you willing to pay for just-in-time service? All of the panelists agree that component manufacturers could reap significant benefits by doing the math and quantifying the potential cost savings.

Conclusion

While you have absolutely no control over a lot of factors in the current market, the topics covered in these BCMC seminars are all well within your ability to cause positive change. Listen to the whispers throughout your plant—measure and quantify your costs of doing business, and consider implementing some of the suggestions these panel experts had for component manufacturers. The cost savings will come.