How to Increase Profits Through Teambuilding – A Case Study
Team Building by encouraging employee participation and recognition improves employee satisfaction, reduces labor costs and employee turnover.
While looking through business related publications this week I was pleasantly surprised when I came upon some quotes by Sir Richard Branson which mirrored my own business philosophy. He was asked how he has managed to step back from day to day management of his many companies. His answer was simple. By listening to his people, soliciting their input, then giving permission for his people to contribute and implement their own ideas. Not only did this work for streamlining coporate operations, Sir Branson stated he often found new leaders for his companies.
In any manufacturing, or even corporate environment, human capital in particular, is a critical part of a company’s success, and needs to be nurtured through leadership training and other education programs. When management pays attention, through monitoring, and employees are also given the freedom to initiate ideas and cost saving measures they are more apt to be effective team members. Ineffective monitoring and mentoring of employees through the lean process is bound to negatively impact the entire process and product quality in particular. The employer has to constantly create enthusiasm with all employees and acknowledge them for their contribution, no matter how small or how large. Lean always works when the proper leadership strategy is used to implement it. As manufacturers use their new cost efficiencies to wring more output from fewer employees, care must be taken to select the correct labor reduction.
I once worked for a company which had begun to struggle. They called me in to help determine how to turn this trend around. The increasing rate of returns due to production quality issues was negatively impacting sales growth. The return rate of product measured in credit dollars was 6% of net sales. The Best-in-Class industry average was 3%. Due to the recent sales revenue decreases, management had made the decision to offset the decreasing sales by reducing the labor force. Unfortunately, the first reductions in force included most of the QA/QC personnel because they were not directly involved in the daily production throughput of product and thought of as a cost center.
Upon joining the company, one of my first assignments was to address the quality issues. By building and leading a cross-functional team which developed, implemented and maintained a successful quality control program based on newly established employee and supplier performance metrics, the team resolved the poor product quality issues. Sales increased 12% in less than 1 year without any increase in labor headcount. Our efforts also resulted in the unanticipated recognition of the California facility, by the corporate executive committee, as Quality Factory of the Year for two consecutive years. The program was recognized by the corporate office as a Best Practice and rolled out to the licensee facilities; and I was awarded the Manufacturing Manager of the Year.
The lesson here is this, when forced with bottom line decision making, it is important to consider all aspects of the cuts that need to be made. It is vital to keep some portion of services that may not be seen as income producing from a numerical standpoint, but whose intrinsic value could be far greater than numbers will show.
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