Every company has two critical limited resources: time and money. It is absolutely essential to observe–with a clear and critical eye–how these two resources flow through your operations. Unfortunately, this kind of honest and unflinching self-evaluation can be tough for all kinds of reasons. Some of these reasons (strong force of habit, too close to the work for a wide-angle view) are obvious. Others are less so.
One all-too-common phenomenon that has plagued many of the folks we’ve worked with involves murkiness around how business owners value time–both their own and that of their employees. Imagine a business that runs a three-shift schedule. Maybe it’s a co-packer, maybe it’s a distribution hub. Let’s say one crew starts at 7AM. The whole crew is ready and assembled on time, but their supervisor left her planner by the coffee pot at the other end of the warehouse. She needs the notepad because she has jotted down some last minute changes to the day’s workflow, communicated by her boss in a voicemail the day before. A couple folks have gone to get a cup of coffee in the downtime while she retrieves the notepad, and by the time everyone’s gathered again fifteen minutes have elapsed.
I like to think of this lost value in terms of ‘ghost dollars.’
Fifteen minutes is no big deal in the grand scheme of things, right? But if it’s a crew of five, that’s 75 minutes. Now, maybe this type of incident is a total rarity. But more likely, something like it happens several times a week, or worse, multiple shifts per day. Those ghost hours are ghost dollars that can start to seriously pile up: 5 people x 15 minutes per day x 260 days per year x $15/hr adds up to over $4875 per year.
The point here isn’t to be an unfeeling efficiency czar, but to foster a culture that values people’s time. The crew showed up on time ready to work, and routine delays communicate that their efforts at timely arrival aren’t worth much. Valuing both work time and break time is an articulation of mutual respect and shared purpose.
Ghost dollars aren’t solely about lost time. They rear their ugly heads in a bunch of other subtle ways. Think about persistent, slight deviations from expected yield weights on hogs or beef sent to the processor. Or hay trampled into the muck. Or days of shelf life shaved off a couple dozen cases of produce left on the dock because of a miscommunication about a delivery. Or a proportional imbalance between a dairy’s milking herd and their support herd.
Sleuthing out and freeing up ghost dollars is a big part of our work at Kitchen Table Consultants, and we’ve developed a sharp eye for it. As the saying goes, ‘How do you eat an elephant? One bite at a time.’ Odds are, ghost dollars are bleeding you dry like a leaking faucet and the best time to turn that wrench was yesterday.