How this entrepreneur reduced idle time by 30%
It’s not surprising Alain Duclos was skeptical when a operational efficiency consultant claimed his company was missing out on huge productivity gains and the accompanying profits.
After all, Duclos is an industrial engineer who has built a solid business cutting large coils of steel and aluminum into specific sizes for manufacturing clients.
Despite his doubts, Duclos decided to give the efficiency consultant a shot. Even if his Montreal business, CR Slitters, achieved half the promised gains, it would still be worth it.
Duclos knew he had to make some kind of change. His customers were demanding quicker delivery times. Due to high shipping costs, he couldn’t expand much beyond his existing clientele in Quebec, Ontario and the Maritimes. Getting leaner seemed like a smart way to maintain profits.
The operational efficiency consultant started by analyzing the business and then proposed a few simple ways to eliminate waste and increase productivity. These included cleaning up and standardizing work stations, creating performance dashboards, and streamlining pre‑production steps.
Improving your results
The results amazed Duclos. Idle time fell up to 30%, while output shot up 15% without any increase in hours for his 45 employees. The company broke its production record in June.
Most small and medium‑sized businesses can make significant productivity improvements at a relatively small cost, says BDC Senior Business Advisor Stéphane Chrusten who worked with Duclos.
Only 15 to 20% of an employee’s work day is spent on purely productive activities in the average Canadian small and medium‑sized business.
“So much unproductive time can be eliminated through efficiency improvements,” Chrusten says.
Evaluate your efficiency
The first step in getting leaner is usually to carefully assess your company’s current operational efficiency. At this stage, it’s important to compare yourself to the rest of your industry to get a better idea of how you’re performing.
An operational efficiency assessment will show you and your employees priority areas where you can achieve quick wins and set yourself up to create a culture of continuous improvement.
Following a standardized BDC methodology, Chrusten first sat with Duclos and his senior managers to learn about the company. He asked about operational bottlenecks (points where employees or machines fell idle) and other issues. Together, they explored reasons for the problems and ways to address them.
Second, he toured the business and rated 25 key operational factors on a 0‑to‑5 scale. The factors included inventory management, workplace organization, quality control, production planning and equipment maintenance.
Prepare an action plan
Using his assessment, Chrusten prepared a report for Duclos that included several priority changes and an action plan for implementing them.
Chrusten typically suggests three to five changes that can be done by the business on its own or with the help of an outside consultant. These include standard projects to address issues that crop up at most companies and customized projects to address more specific problems.
Often, one of his first suggestions is to clean and standardize operational workspaces, using the 5S methodology introduced by Toyota. “This can be very motivating for employees,” Chrusten says. “It lets them breathe.”
He also strongly advises companies to identify key performance indicators, and train managers and employees to monitor them on dashboards.
Using dashboards to produce gains
“By using dashboards, you can compare your performance from day to day and see the impact of efficiency efforts,” Chrusten says. “It becomes natural to start every day by looking at what you did yesterday and think about how you can get better today.”
Two common customized projects are rearranging equipment in the plant to make production more efficient, and streamlining the order‑taking and pre‑production processes to reduce errors and save time.
Simple changes to boost profitability
He was less convinced about the need for a dashboard to monitor efficiency, but Chrusten insisted and Duclos went along with the idea. He now agrees the tool is essential.
“I look forward to seeing the dashboard every day,” he says. “It’s very interesting and useful. Everyone can see where the problems are and how to improve.”
Duclos also implemented Chrusten’s advice to improve the coordination of pre-production tasks as a way to reduce machinery idle time. The steps cut the average set-up time for a job from 18 to 12 minutes—a huge gain that boosted the profitability of each order.
Duclos figures he will recoup the cost of the projects in less than a year. He is already talking with Chrusten about another efficiency exercise.
3 tips to boost efficiency
Start with an efficiency assessment. How does your efficiency compare with competitors’? Where are the bottlenecks that cause lost time for employees or machines? What stands in the way of achieving better results? How can you improve your processes?
Create a system for continuously monitoring how you’re doing in various areas. Start by identifying some key performance indicators and then create a dashboard that lets you and your employees follow them.
Clean up, standardize and reorganize
Cleaning up and standardizing work stations is a great place to start. It can help employees find what they need more quickly, leading to time savings.