When speaking to their leadership team about materials handling equipment issues, operations managers often focus on the additional resources they need to do the job: more equipment, more overtime for operators, more maintenance parts, more application software, more indirect personnel to plan and schedule the equipment…and the list goes on. What the leadership team wants to hear is “less.” Less equipment, less overtime, less maintenance, less labor, etc. If a leadership team only hears recommendations for increased spending when it knows there are plenty of opportunities for “less,” operations managers lose credibility in claiming they have “the best interests of the overall company at heart.” What's worse is when operations managers complain they're not getting “what they need to do the job.”

Operations managers can regain the upper hand with their leadership team by using the concept of “less is more.” In other words, ask for fewer resources. Your credibility quotient may also go up. Imagine yourself saying this:

“Boss, I've been thinking about how we can free up some cash to improve customer service by hiring more account reps. I've investigated the following ways to improve cash flow and add to the bottom line.”

Then lay these recommendations on them:

• “Let's perform a sales/leaseback transaction for our currently owned equipment. This will create $550,000 of additional cash flow as a result of the buyback and a $100,000 profit because our book value for the equipment is lower than its purchase price. We'll also improve overall company ROI by reducing our assets on our balance sheet.”
• “Let's have our maintenance parts suppliers buy back our currently owned parts and create a vendor managed inventory program in which we pay for parts only when we use them. This will create $150,000 of additional cash flow as a result of the buyback, $30,000 of additional profit because some of our repairable spares were incorrectly valued at $0, and we will eliminate two of my indirects for a savings, with fringes, of $100,000/year.”
• “Let's replace John's recently vacated operator position with two part-time positions, with one of those positions being filled by a recent retiree. Instead of the position costing $40,000 with fringes, we'll be able to keep the position's annual costs down to less than $30,000, due to a minimal number of fringe benefits.”
• “Let's reduce the footprint of the facility space required to house the materials handling group. By freeing 3,500 square feet through tighter staging of our recharging stations, reducing our repair shop staging area and squeezing our administrative area, IT will be able to expand its area within the confines of our current facility.”

Using the “less is more” approach isn't easy. You'll make “enemies” of those whose interests are jeopardized by your goals. The wise thing to do politically is to create the “wheel of self interest.” This is a systemic way to identify all those in your organization who may have “problems” with your initiatives. You speak to each of those individuals and try to address their issues before you launch your “less is more” initiatives. Unfortunately there will always be one person who will not accept the changes, and you will have to live with the idea that you can't make all the people happy all of the time!

The most important questions you should ask are of yourself:

Should I be proactive and do “the right thing” on my own terms, or should I wait for the leadership team to dictate the terms for reducing organizational expenditures?

Ron Giuntini can be contacted at rgiuntini@oemservices.org.