How to Maximize Efficiency and Reduce Overhead
May 6, 2014
Glass fabrication is filled with complexities, from safety concerns associated with moving large lites to threat of breakage during and after production. If you are in the business, you know that cutting corners is not an option.
On the flipside, your customers continue to apply price pressure, and improving your bottom line has never been more crucial.
So, how do you reduce costs and maximize efficiencies?
Some of the industry’s leading fabricators have weighed in on this important question, offering the following four tips to boost profits, while maintaining safety and quality standards.
1. Engage your workforce.
A 2013 Gallup study, The State of the American Workforce, reveals that “… when organizations successfully engage their customers and their employees, they experience a 240 percent boost in performance-related business outcomes compared with an organization with neither engaged employees nor engaged customers.” And nearly half of Americans with full-time jobs are not engaged.
Ensuring employee engagement in the glass industry can be difficult due to the pace of work. Paul Cody, president and CEO of Consolidated Glass Holdings, was surprised by the speed at which this industry moves when he made the leap from the electrical market to glass just over a year ago.
“Inefficiencies come from a number of external factors, including leadtime requirements, project funding and execution delays, weather issues, construction issues, last-minute design changes and many others,” Cody says. “Internally, you have to focus on customer service and deliver on your promises. Employee engagement, involvement and empowerment are critical to this process. Many times the best solutions and actions come from the people who deal with the issues every day.”
For British Columbia-based PFG Industries, engaging employees begins with the hiring process.
“We aren’t making lumber or cotton balls. The glass industry is difficult, and it’s not for everyone,” says Ryan Nielsen, vice president of operations for PFG. “We’ve learned that it’s not enough to hire based on technical aptitude. You have to look at a candidate’s personality and whether it’s a fit for your culture. And when you think you’ve found the right person, be very clear up-front what they can expect on a day-to-day basis— from the pace of work to the challenges they might encounter.”
Nielsen and the PFG team also place a heavy emphasis on training. “We give people the tools to work smarter, not harder. When you provide proper, ongoing training, you gain efficiencies, create a safer environment, improve quality and increase engagement.”
2. Cut the scrap and invest in your processes.
|A thermal imaging scanner at Consolidated Glass Holding’s Solar Seal plant in South Easton, Mass., helps lead operator Shawn Eddy strategically adjust a recipe’s cycle time and temperature settings to efficiently achieve the highest quality tempered glass.|
Of the challenges facing the glass industry, inefficient processes might be the most expensive. According to Arthur Berkowitz, CEO of JE Berkowitz, there are a few major areas that can drive costs up quickly, and they are all process and materials driven.
“Unrecoverable waste and rejected components that don’t meet quality standards, especially when working with high-performance coated glass, can drive up cost significantly,” Berkowitz says. “Additionally, product changeovers in heat-treating ovens, resulting in skipped loads and small load beds, are costly.”
Just like you invest in your employees and their training, you have to invest in your equipment. That’s something everyone can agree on. In fact, all three companies interviewed for this article have invested in automation over the past several years to become more profitable, reduce overhead and control scrap.
Cody and the Consolidated Glass Holdings team can offer a unique perspective because they run seven glass businesses focusing on diverse market segments―all with varying levels of technology ranging from manual to fully automated. In the case of its subsidiary, Columbia Commercial Building Products, it had an opportunity to build its IG production for the commercial building market from the ground up.
“Market demand has changed and is highly competitive. You have to be able to deliver quality quickly, and automation has become essential,” Cody says. “We were able to do it right, right from the beginning by adding a fully automated line.”
3. Plan. Plan. Plan.
To Nielsen, the biggest money pit when it comes to glass fabrication can be summed up in one word: disorganization. “You have to put time and effort into proper planning,” he says. “I say it all the time. Plan. Plan. Plan. Take the time to be detail oriented, and empower your team leaders to execute the plan.”
Cody takes it a step further by emphasizing the importance of proper business plans. He cites lack of planning as a common cause of inefficiencies across all manufacturing businesses, not just glass.
“All good businesses have an effective planning process that includes longer term strategy and an annual operating plan. These plans include specific financial and non-financial goals and objectives,” Cody says. “The process includes an assessment of strengths and weaknesses, with resulting actions to build on strengths and address weaknesses on a prioritized basis within the limits of an operating and capital budget.”
Cody continues, “Another critical element of reducing inefficiency and cost is selection of critical metrics and establishment of an effective measurement process. It is widely known that we get what we measure. Equally important are the resulting actions or countermeasures that take place as a result of underperforming indicators and metrics.”
The bottom line is plan, prioritize, execute, measure and refine. Repeat.
4. Keep your suppliers close.
Another common theme among the experts at JE Berkowitz, PFG and Consolidated Glass Holdings is that they value the relationships with their suppliers. They look to them to drive demand with architects and designers, to educate employees and the industry, and to identify new technologies to improve products and processes.
“Keeping your key suppliers close is essential for growth,” Cody says. “You have to stay connected and use your shared resources to achieve your business goals.”
Depending on where you are sitting, this advice from the experts might seem simple—or it might seem daunting. But when three leading fabricators have similar answers to the question, “How do you reduce costs and maximize efficiencies?” you have to believe the advice is worth listening to.
As you get started, remember to plan your work and work your plan. Perhaps Nielsen sums it up best: “You don’t become good overnight. But by focusing on organization, training and investing in your business, you’ll be able to adapt to change as it comes, and create a healthy, sustainable organization.”