When Bill Burke was appointed president of Fire-Dex LLC in 1996, he stepped into what he bluntly refers to as a terrible situation.
“When my former partner bought the business in 1983, he thought he was buying a low-cost, Southern factory; it was only Southern,” he says. “For 13 years, we went through plant manager turnover to the tune of one every other year. We went through rank-and-file production employees to the tune of 50 to 100 percent per year.”
Burke was no stranger to the problems plaguing the manufacturer of firefighting turnout gear before assuming the role. He had joined the company way back in 1983, which at the time contained a separate, more successful entity. In his time there, he soon realized that part of the problem was that Fire-Dex’s manufacturing plant and corporate headquarters were more than 600 miles apart. There was no way to effectively manage the company’s day-to-day operations, so in 1998, he moved the manufacturing portion from Rome, Ga., to its current location in Medina.
“Having everything under one roof was phenomenal for Fire-Dex,” he says. “We had top manager and ownership involvement on a daily basis.”
By being able to walk the factory floor five days a week, Burke began to notice subtle areas where small changes could yield big improvements. For example, he realized his sewing team wasted considerable minutes changing between different colored threads on its machines.
“We were using six different colors of thread to make these suits,” he says. “I was standing by a sewing machine, and I see all these thread colors everywhere. I see the sewing machine operators stopping to change thread. It takes a while, like 10 minutes to change over. I went to the customers, and I said, ‘You currently buy a red suit. Do you care if it’s sewn in red thread? Would black be OK, or white?’ And the customer said, ‘Yeah, black’s fine. Actually, black kind of looks cool.’ So we went to two colors.”
Though seemingly isolated at the time, Burke’s simple change started an avalanche of improvements that have since been harnessed in a formal system of suggestions called Opportunities For Improvement, or OFIs. The program allows employees to submit ideas that are immediately reviewed and, more than 70 percent of the time, implemented.
“If it’s a good idea, we’re going to implement it,” Burke says. “Instead of just having one guy thinking the president and CEO let’s have the whole fricking organization thinking.”
Fire-Dex has seen positive growth every year since the inception of the OFI system. Previously a break-even business, the company reported revenue of $10.3 million in 2004, its first year over the $10 million mark. Last year, that number jumped to just under $17 million.
Here’s how Burke boosted revenue by encouraging employees to think of opportunities for improvement.
Share the wealth
While Burke may have initiated it, the avalanche of OFIs didn’t continue on its thunderous rush without some additional prodding. A few ambitious employees did offer suggestions right off the bat, but the majority was far less enthusiastic.
It wasn’t until 1999, when Burke tied the program directly into Fire-Dex’s newly instilled profit-sharing plan, that it really took off.
“We said to the employees at about the middle of ’99, ‘We’re going to have profit sharing; in order for you to be eligible, you need to write up one OFI. That’s it,’” he says.
Participation increased in a predictably dramatic fashion after the announcement. Even though Burke now requires his 105 employees to fill out eight OFIs per year one per quarter individually and one per quarter with their departmental team there has still only been one instance in which an individual chose not to participate.
“Most of them are like, ‘How simple is that?’” he says.
Whether you offer profit sharing or a similar form of encouragement, Burke suggests keeping the submission process simple. At Fire-Dex, for example, an employee need only fill out a one-page form describing the opportunity and its root cause. The OFI is then turned in to one of two employees who spend a portion of their time reviewing them.
Though Burke says that devoting so many man-hours to the program is a considerable expense, he also says the benefits you’ll reap are well worth the investment.
“It’s clearly an investment,” he says. “Fire-Dex has a couple of people that spend a portion of their life on OFIs. It’s probably equivalent to half a person at 30 to 40 grand plus benefits, but I think it’s phenomenally invaluable.”
To help weed out the good ideas from the bad, Burke also suggests giving employees some guidelines before they’re even submitted for review. First, is the suggestion more of a complaint than an improvement? Second, does the suggestion provide a permanent benefit to a process, product, work group or environment? Finally, will your customers benefit from the suggestion?
Other than that, the only distinguishing criteria involves pay and benefits.
“The only thing you cannot do on the OFI is you cannot change pay or benefits,” Burke says. “You can’t say, ‘Pay us all a dollar more,’ or, ‘We need free health insurance.’”
Once a given OFI gets approved, most are passed to the supervisor who oversees the department in which the suggestion will be implemented.
“Most of them, I don’t even see,” Burke says. “They’re just implemented on their own from a supervisor level. I can’t see them all
because there are too damn many of them.”
The supervisor must then check in with the employee who first came up with the suggestion to make sure he or she fully understands it: “‘All right, I think I got it. What you’re saying is that if we got this size box versus the size we have today, then this would fit perfectly, and we would save a half a buck a box or whatever. Is that right?’ And the person says, ‘Yes. That’s exactly what I meant.’”
If a certain idea would prove too time-consuming or costly, it must instead be passed up to one of Burke’s direct reports, if not Burke himself, to get the go-ahead.
“Supervisors can do $500,” he says. “Their boss can do a grand. Any of my direct reports can do 10 grand. There’s a chain of command and a process for approving. Anything over 10 grand, I’ll sign.”
Implement and review
A few months ago, Burke began his day announcing implementation of a substantial OFI at a companywide meeting.
“This was a huge one,” he says. “The OFI was go to four 10 [hour work shifts per week.] The employees will save 20 percent on their gas costs and wear and tear on the cars, and the customers will still get 40 hours of production. On Friday, we will shut down the factory, turn off all the lights, turn off all the air conditioning, and the company will save some energy costs.”
Burke already knew that not everyone was happy with the potential change in work hours. Before making the announcement, he first had each department supervisor conduct a survey with his or her team members to gauge whether or not they’d be opposed to the change. Though 93 percent of employees were in favor of the idea, it still left 7 percent of people who weren’t.
“Of all of our employees in production, they can’t all do that,” Burke says. “It’s not great for everybody.”
When you embrace a culture of change, certain people will always be unhappy with a given decision. As Burke explains, “Change isn’t comfortable. Most people don’t like change. There’s no way that 100 percent of everybody will be happy.”
That doesn’t mean you should carelessly implement any change as you see fit. Burke says conducting an informal survey within departments is a great way to avoid large-scale opposition when enacting a major OFI. And as long as the majority of employees are for it, you shouldn’t hesitate.
“It’s going to change,” Burke says. “Embrace it. Plan on it. Bank on it.”
Once you implement an OFI, regardless of its size, you should always go back to review whether or not it’s producing the desired results.
“The supervisor’s responsible for verifying that 30 days after implementation, that it’s doing what it was supposed to do,” Burke says.
Train for change
Burke was walking through the factory floor one morning when he literally ran into an OFI: “I’m walking by the table, and I hit the table with my hip. One of the girls standing next to me says, ‘I hit that thing all the time.’ I say, ‘Why don’t you write up an OFI to have it cut down?’ She wrote it up, and just before I took this call, the maintenance department was cutting it. It’s so simple. It’s a shelf on top of a table, and the shelf is screwed in, and there’s no way to move it, but you can cut it. It’s just a wood shelf, so we just trimmed it. She’s been running into the damn thing for a year. That’s empowerment.”
Though opportunities for improvement abound, that doesn’t mean your employees are always going to recognize them. They need training, examples and a model to follow. Just as Burke pointed out that OFI to his employee on the factory floor, you will invariably need to help your own employees identify instances where change can lead to improvement.
When an employee first joins your team, Burke says the best way to bring them up to speed is providing a plethora of examples from both ends of the spectrum.
“‘Here’s a colossal OFI one that took six months to implement and has sort of changed the whole chart of this big ship,’” he says. “‘Here’s one that was a very simple, common sense thing where we just turned it this way instead of this way, and it happened to save us 12 seconds.’”
To strengthen the habits of new and old employees alike, Burke holds a monthly OFI meeting in which he reviews changes and shares the top three suggestions.
“Every month, we have a companywide OFI meeting,” he says. “It’s a state of the business, how we’re doing, what’s happening. ‘Let’s deal with some OFIs. We got in 52 or whatever that number was. We implemented 40. Let me give you three examples of three great OFIs, and then I’m going to tell you the OFI of the month.’”
Though each of these practices will better enable your employees to identify opportunities for improvement at your own company, Burke says the best way to hone their skills is to personally review their suggestions one-on-one. “I personally hand out the profit-sharing checks,” he says. “I review with the employee the OFIs they’ve submitted. In some cases, I might talk to somebody, and they might not have had any OFIs implemented. It happens. I say, ‘What were you thinking? Explain it to me. I think you got something there. Maybe if you did it this way; what do you think of that?’”
The practice clearly entails a bit of extra work, but Burke says it’s all worth it. By walking your employees through the process, they’ll become the agents of change who will continuously improve your business.
“Make the employees the change agents,” he says. “Give them the forms to make the change happen. ‘You don’t like something? Write it up as an OFI. We’ll look at it. What don’t you like? Let’s see if there’s a way to do it better.’”
HOW TO REACH: Fire-Dex LLC, www.fire-dex.com or (330) 723-0000