One of the challenges that turnaround consultant Robert Chastain has encountered in rebuilding Strobel Machine has been to get the company to focus on costs. One event brought home the value of paying close attention.
A replacement part needed for one of the company's shop machines was lost in transit by the freight carrier. The first box arrived empty, and by the time the carrier located the part and delivered it to Strobel Machine, a week of valuable production time had been wasted.
Chastain suggested that the employee responsible for handling the transaction at Strobel contact the carrier and explain that the delay had cost the company a significant sum of money in lost production. As a result, Strobel was able to get a $200 adjustment in the carrier's bill-an amount that otherwise would have come off the machine shop's bottom line.
Chastain says some of the employees looked at the $200 as a relatively small amount of money as compared to the business that the shop generated, but when he put it in terms of how much time it would take for the employee who made the call to generate $200 worth of profit for the company-about a week's worth of work-it took on new significance.
Says Chastain: "I'm trying to emphasize to them to focus on what they keep, not what they make."