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Before You Make Any Technology Investments, Let’s Visit the Dungeon

28. June 2019 11:45

By: Joe Baggett,  Innovative Wood Process Solutions              

Editor's Note: This is the first blog in a series by engineering consultant Joe Baggett

After years of leading engineering and technical service operations at major cabinetry and wood products firms, I determined that I would like to take what I had learned and use it as the basis for starting an engineering and consulting firm. So I began by thinking back on my career so far. In setting up this consultancy, I wanted to do something – and create something - new and different. 

On the equipment side, I did a quick survey of the machinery, infrastructure, and information technology for which I had been responsible. It shocked me when I realized that I had specified, acquired, installed and commissioned over 100 million dollars worth of equipment.

Then I asked myself what I had learned from all this. That’s what I plan to share with you in this series of articles about plant operations.

A question that has long plagued me was why the average shop or factory floor doesn’t look more like the show floor from IWF, AWFS or Ligna? I used to think it was for lack of funds or financing. So I asked myself if each wood manufacturer that attended these shows had a blank check, with no obligation funding to buy machines each year, would it really make a big difference in our industry’s operations overall?

The more I thought about it, the more I concluded, it would not. Yes, more machines may be bought and installed; but would it result in the average woodshop/factory being more profitable, stronger organizations, etc.? I would have to say no. Let’s explore why.

First, just ask and answer some blue-sky hypothetical

  • If the organization you are currently leading had 10 million in obligation free capital to invest in equipment, could you increase profitability by 5 to 10%, or more?
  • Would such investment strengthen your organization?
  • Would it bring health to the culture of the organization?
  • Would it fit with a holistic company-wide strategy?

I’ll go deeper into what’s behind my opinion on why investment is not the magic bullet in later articles. But suffice it to say for now, that after giving it a lot of thought, I determined that the most valuable contribution I could make to the woodworking industry through a consulting engineering practice wouldn’t be merely offering technical expertise, but to address, instead, the strategy – in regards to strategic thinking or what I call “holistic organizational thinking” - in which to apply it.

In re-engineering or green-fielding a plant, asking the right questions and in the right context is everything - especially as increased specialization and the creation of worlds within the industry such as Finishing, Bar Code Scanning, Shop Floor Control Software, etc. , come into play.

Let’s return to our questions about that hypothetical ten million dollar investment. One thing I noticed is that most wood manufacturing companies have a “dungeon” – the place where equipment that is not in use, or is obsolete, is stored. Sometimes that equipment isn’t very old, and not infrequently, there is a lot of it. Also sometimes it hadn’t been in service long enough to pay itself off. (Just think about what that $10 million in potential investment could buy.)

During this same time, I was beginning to take note of this phenomenon: the downturn in the economy was beginning. At first, I thought this accounted for the growing inventory of machines in those dungeons.

But there was another force at play. So let me ask another non-rhetorical question: What’s in your dungeon? If we had to write a report about the equipment not in use or obsolete what story would it tell? The story usually has less to do with the equipment itself and more to do with the organization, strategy, permitting and the market life of the product it was purchased to produce. If we did a postmortem on the equipment in the dungeon what story would it tell us?

Now, this where I would suggest that the obligation free investment in equipment wouldn’t have that big of an impact on the average woodworking organization if it was available. I would suggest that it would proportionately grow our dungeons.

I can’t tell you how many times we have resurrected a piece of equipment from the dungeon but in the context of making it work for the current application and needs. Always with the “it doesn’t work” as the starting place. This reaction is the anecdotal verbalization of this phenomena from “what to think” instead of “how to think.” The downturn in the economy only exacerbated the underlying problem. Holistic Strategy is the key to changing how we approach equipment acquisition and application.

Will Peterson says it best in his book, Strategic Learning:

“As strategic leaders, we have to derive increasing simplicity from increasing complexity. Information is universally accessible and becoming free to all. The internet offers it to us on a plate. No longer does the world belong to the ones with the most information, but to those with the highest ability to make sense of it; no longer to those who know more but to those who understand it better.”

Next time we’ll look at the idea of “asking the right questions," and why that is so hard to do.

 Joe Baggett is President of Innovative Wood Process   Solutions. Reach him at iwpsolutions19@gmail.com,    817-682-3631. www.iwps.biz

 

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