Wade Egnor: When we met Ed, had about a six-week lead time, which was standard in our industry but that’s a long time to wait for your product. It certainly affects cash flow, it affected the amount of stone, in this case, that we could produce. We were behind. We could not keep up with the production and Ed told us to quit cutting stone. How in the world stop doing something can help you do what you need to do better. I finally took Ed’s advice and he was right.
Ed is a very calm person. He does not get excited. He does not get frantic or talk louder when he’s trying to make his point. He knows what he’s doing. The effects were immediate. Ed promised us a 20% increase in throughput in making more countertops. In reality, we probably immediately in the first few weeks, so about a 40% increase in throughput.
We didn’t realize that we had literally hundreds of different pieces of stone spread around the shop, in any location, and that our employees were spending a lot of time going around finding those pieces of stone instead of actually working. When we stopped producing and we cleared out the shop and we started only working on a few jobs at a time, then that made everything much simpler. They could find everything they needed much quicker. That was increased throughput that we were paying for, we just weren’t getting.
We were asked by Ed, “What would we like our lead time to be?” We blurted out an answer, thinking, “This is crazy. There’s no way he could do this.” We said, “We want it to be five days.” Ed said, “Okay, no problem.” At the time, remember our lead time was six weeks. Can you imagine going from six weeks to five days? All this time later, we still have a five-day lead time.
Immediately, because we have a backlog of work, we took that six weeks’ worth of income that it would normally take us six weeks to earn, and we compressed that into just a couple of weeks. We had an initial, really big cash influx. We turned all of that backlog into dollars and we put it in our checking account. That was really nice to start with and we knew what we were doing was correct. To be honest with you, the benefit came after Ed left because once you have that knowledge, you use it forever. What Ed gives you is you pay very little for it and you get to use it from now on and it never wears out.
You have predictability and control. When you tell a customer, “This will be done on this day,” you can have confidence that it’s going to happen. When we have a process now, that built-in quality control where we ask the customer to come in and look at the product. He helped us build an entire system, not just help us to manufacture countertops, but help us with the total process, from the time we started dealing with a customer until the installation of the product. Quit waiting, just stop what you’re doing, get that in there, get on the right track. The quicker you do it, the better it’s going to be for you.