Category: Leadership

We Don’t Know What Our Margins Are – How Do We Take Decisions?

During my time in the Roll Forming Industry, I have been in dozens of companies across the United States and around the world.  Frequently, I have found myself in conference rooms with C-level groups trying to implement a new ERP system.  Since I worked for a company that made MRP scheduling software for manufacturers, we were a critical vendor and typically brought in early in the process to consult.

In these meetings, I have heard the same conversation over-and-over.  The first time I heard it, I was shocked, but since then I realize most companies must operate the same way.  It usually comes from someone in Accounting, and it goes something like this, “We don’t even look at the paperwork that comes off the floor anymore.  It’s usually meaningless.  Every time we’ve tried to reconcile what the Operators write down with what we measure coming off the line, it’s either wildly inaccurate, or there’s so much error it doesn’t matter.  We know what we spent last month to purchase things.  We know what we shipped out.  The rest must be waste.  We just have no idea where all the waste is coming from.”

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