Now Turn It Into Profits
by Mike Burk
In the July 2009 issue of T&D Magazine published by
the American Society for Training and Development, Lou Russell writes:
“Managers should always practice resiliency and know how to see the potential
in the immediate future.”
Throughout 2009 everyone in our industry devoted great efforts to reduce
costs, streamline operations and do everything possible to survive. You
have cut costs and reduced waste wherever possible. You have improved
quality and efficiency. You are now starting to ask the questions: What
are we going to do in the immediate future? How can we improve more? What
uncertainties await us in 2010?
Consider looking at the year 2010 as a new project your company is evaluating.
Imagine you are presenting the IG manufacturing 2010 Project to management.
How would you convince the management team to complete this project? How
could you determine the return on investment? Russell offers some assistance.
She suggests using IRACIS as one step to “clearly understand why the business
is doing the project.”
IRACIS is an acronym used to determine a project’s value to a company.
It stands for:
• Increase Revenue - How can we increase sales to new or existing customers,
shorten the sales cycle and reduce the cost of sales?
• Avoid Costs – How can we reduce operating costs, eliminate unnecessary
expenses and minimize waste?
• Improve Service – Will this project help us improve delivery, response
time and be more valuable to our customers?
If you made it through 2009, you have already completed the last two steps.
But did anyone do anything to increase revenue? What was done to improve
the top line?
I recently posed these questions to a number of IG manufacturing managers
and supervisors. All explained how they had improved productivity, reduced
payroll and cut costs wherever possible, but I asked them this: “We make
insulating glass, but how can we increase revenue?” At first thought,
none could offer any ideas for increasing revenue. With more discussion
and reflection some could see a few opportunities.
Most managers agreed that the greatest opportunities for increased revenue
are in offering more insulating glass options. Some improve performance,
others increase sustainability and still others can satisfy the aesthetic
needs of the homeowner. Most options can bring increased sales, a higher
margin and increased revenue.
Performance can be improved using different glass types and coatings,
including low-E glass and laminated glass. Warm-edge spacers will increase
U-values, increase condensation resistance and reduce sound transmission.
Gas-filled units and triple-glazed units will substantially increase thermal
Increase the sustainability by using superior quality components combined
with high quality standards. This will result in long lasting windows
that perform past the warranty period. Consider improving or extending
your present warranty to prove your confidence in the sustainability of
Offer new and popular options such as innovative muntin designs, internal
decorative lites, silk-screening, internal blinds or “V” grooves. Consider
additional colors, patterns and designs that are aesthetically pleasing
to your customers.
Most supervisors involved in these discussions agreed that these options
would increase revenue, but they feared these units could have a negative
impact on operating costs and productivity. These units become the dreaded
“specials” that slow production. Units with these options are more difficult
to produce, take the most time, result in the majority of remakes and,
most agree, are best left for the next shift.
To reduce the impact of these special units, conduct a review of your
order entry system and scheduling methods. Ensure that the components
for these special units are available. Determine the scheduling of equipment
and associates for the least impact on the normal production requirements.
Be resilient, improve the process, and outsource when necessary. Apply
what you’ve learned over the past year on standard products to specialty
products. Give your sales group more options to sell. Give them more ways
to satisfy the customer and increase revenue.
Mike Burk serves as technical service manager for
Edgetech I.G. He may be reached at email@example.com.
Mr. Burk’s opinions are solely his own and do not necessarily reflect
those of this magazine.
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