Better results with ordinary people
The greatest management experts of the
20th century were W. Edwards Deming and Peter Drucker.
Dr. Deming’s genius was in teaching
managers at all levels to analyze production, office and
service procedures in terms of a process — not simply as
tasks.
This requires observation of and input
from the employee. As the steps in each process are
analyzed, duplication of effort and
mistakes are greatly reduced.
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Mr. Drucker discovered, during his study
of General Motors, that when management is viewed as a
discipline (with defined methods and procedures) it can be
structured and taught. Then and only then can we “enable
ordinary people to achieve better than ordinary
results.”
There is a tremendous need for the
proactive owners in this industry to embrace these management
philosophies.
Over the past several months, I have
spent a great deal of time in drycleaning plants and at front
counters. It’s obvious that it is very easy to get caught
up in the daily chaos and to buy into the idea that running a
drycleaning business is like running a fire department.
Wow! Note how we can always find the time
and energy to put the fires out but we never seem to take the
time needed to prevent them from starting.
Your challenge, as an owner or manager,
is to take a moment, step back and take a look at your business
from outside. Not from behind the counter or from behind the
boiler.
In other words, crawl out of the trenches
and look at the big picture. What do you see?
Some owners see mountains of clothes that
will never be ready on time unless they themselves get
personally involved in moving, inspecting and touching every
piece. These owners are what I call the Micro Managers.
The better organized owners will keep an
eagle eye on a few key employees. These owners have graduated
from the position of Micro Manager to Production Manager.
The Production Manager types know that
they do not have to touch every piece going through the plant,
but they also believe that they must be there all day every day
or the work will never get done right or on time.
The most advanced/progressive owners are
the ones who know what the outcome will be or should be before
the work starts.
These are the individuals who have a
burning desire to manage their business in a professional
manner. They also have the ability to manage by the numbers
while dealing with the essential needs of their customers and
their employees.
The ultimate goal of these Professional
Managers is to achieve the best possible results with the least
amount of stress.
“Best possible results” means
different things to different people, such as:
• No incomplete orders at the end of
the day.
• No missing items.
• No customer complaints.
• No re-dos.
• Production ending by 3 p.m.
• Being able to pay all the bills at
the end of the month.
• Making lots of money.
• All of the above.
You must define what “best
possible” results mean to you.
Let’s start with the basics. Why do
you own your own business? The most common response is to make
money.
Next question: How much money do you want
to make? As my father-in-law used to say, “I don’t
want to be a millionaire, I just want to live like
one!”
So, when it comes to making money in this
or any other business, you need to know what is reasonably
achievable.
In the drycleaning business, a reasonable
profit on sales (including officer‘s salary or
owner’s draw) is 18% to 28%. Remember now, we are talking
about what is reasonable and we are talking about the least
amount of stress.
Set a goal for your return on sales
– let’s say 23%, including officer’s salary.
On $500,000 in sales, that is $115,000 a year. On $2 million in
sales, that is $460,000 a year.
In order to achieve these results with
less stress, you need to begin managing your business by the
numbers. The easiest area to manage by the numbers is the
Production Department.
Start with your current information.
Example: What are the total number of
drycleaning pieces that come in each week? Decide how many
pieces per hour each drycleaning presser should press. (A
reasonable standard for quality drycleaning pressing is 30
pieces per hour per operator. But you can set your own
standard.)
Next, divide the total number of
drycleaning pieces that came in last week by the total number
of hours your drycleaning pressers worked.
Did your presser meet or exceed your
expectations? If your answer is “yes,”
congratulations!
By knowing how many pieces you have each
day, you can begin to plan the time your production people will
start and when they will finish and go home.
If your production people did not meet
your “reasonable expectations,” then there is a
problem. The two most common problems that exist in production
are:
• Poor scheduling of hours.
• Allowing employees to under
perform.
These are the two most costly sins in
production. When you do not properly schedule the hours that
your employees work, you end up with production people standing
around waiting for work.
Recently, my firm undertook the
management of a drycleaning plant for an absentee owner. I
assigned two of my key consultants to this project.
On the production side, the
drycleaner/spotter and the drycleaning inspect, assemble and
bag (IAB) person started at 6 a. m.
They started at this time because they
rode to work together — it had nothing to do with the
needs of the company.
The drycleaning pressers started between
6:30 a.m. and 8 a.m. because that’s when they wanted to
start or because that’s when they could get to work.
Consequently, the dry-cleaning IAB person
and the pressers constantly ran out of work every day. To
correct this problem, we re-scheduled everyone’s starting
time.
Even with the new starting times, the
problem continued. The two drycleaning machines had more than
enough capacity to stay ahead of the pressers and IAB.
The problem was with the
drycleaner/spotter. He either “could not” or
“would not” run the machines to capacity. He was
running extremely small loads and doing a terrible job at
spotting. This is the second most costly sin… employees
who under perform.
Fortunately, at the beginning of this
project, we had hired a new presser who also had experience as
a drycleaner/spotter.
We dismissed the drycleaner/spotter and
replaced him with this new employee and hired a new presser.
As a result of these actions, the
drycleaning department is getting all the work done in a timely
manner and the employees are going home early on the slow days.
Using the Deming/Drucker management
model, my staff of professionals observed the production flow
and listened to the recommendations from all the employees.
As a result, in just four weeks we have
improved the quality of the work being processed and greatly
reduced labor costs.
By embracing these management
philosophies, our “ordinary people have achieved better
than ordinary results,” as predicted by Peter Drucker.
I look forward to meeting you in Orlando
at CLEAN ’05!
In the game of business, the more you know
the better you can play the game.
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