Squeezing All the Juice From the Orange

Member Forum by Khaled Mabrouk
Industrial Engineer’s column for IIE members to share their perspectives (May 2015)

I once had a boss who detested people who came in and asked for more money BEFORE they worked on getting the most out of their existing resources and processes. His argument was “why should I give them more money, if they haven’t figured out how to get the most out of the money I already gave them?”

He was tired of managers who attempted to solve operational problems by spending money to buy more resources; instead of taking the time to find out how to fix their operational failure points.

The first instinct for many leaders is that if we buy new equipment, hire more people, or build a new facility, we will be solving our problems. This behavior is often triggered by fast growing companies that believe they don’t have time to think through their problems or to figure out which improvement solutions to implement. What is even worse is that this thinking continues after the growth phase slows down; where we can least afford to waste money.

Buying more equipment, and hiring more people is an easier decision to make and to act on; especially if you are in growth mode. The thinking is “even if we buy too much, we will use it eventually as we continue to grow.” When we consider the time value of money, we realize that UNTIL we actually need the extra capacity, we are being wasteful with our money.

People further support this thinking by believing that they are already doing the best they can with what they have. In addition, quite often, they don’t have the discipline or knowledge to follow a structured problem solving approach to learn how to get more out of their operations.

But by buying our way out of trouble, we are being wasteful. One reason this is wasteful is that the cause of the trouble has not yet been fixed. All we are doing is burying the problem so that we don’t have to deal with it today.

The other reason why buying our way out of trouble is wasteful is that we have now bought more of the same problem we already have. That is: our current processes don’t work well, and now we have more process capacity that doesn’t work well; creating bigger future headaches for us.

So what should we do: explore the advice my boss had. We should work to improve our existing processes (through tools such as set-up reduction, predictive maintenance, visual management, line balancing, etc.), until we are sure that we are getting as much productivity as we can get out of them; as we squeeze all the juice we can from the orange.

To do this, we need to understand the problem well enough to understand the root cause of the problem, then follow a structured problem solving approach to generating a sustainable solution to our operational problems. This way we can come up with solutions that PERMANENTLY solve the problem.

By using a root-cause based problem solving approach, we will be able to solve the problem once and for all. And most of the time, improving the process is significantly less expensive than buying more resources, hiring more people, or building a new facility.

Khaled Mabrouk is a process improvement leader for Sustainable Productivity Solutions. He received his B.S.I.E. from Purdue University and has been a member of IIE since 1985.