ter what the traditional metrics and methods may indicate. Human capital investments that metalcasters have found to be highly profitable include advanced production scheduling and management training in the theory and practices relating to Compatibility and Process Reengineering. Invest- ments to recruit and build high caliber production supervisors and hourly workers have been similarly effective. Especially important right now are initiatives aimed at recruiting tomor- row’s production workforce—minori- ties, women, non-English speakers, and Millennials (those born after 1980)—as these prospective employees are decidedly different from their pre- decessors and pose unique recruiting and acculturation challenges. Invest- ments aimed at improving quality and productivity via employee education and training, and others which boost job satisfaction and retention through mentoring, community involvement, employee engagement, wellness pro- grams, and profit sharing have likewise been proven valuable. Making all this happen will require
management teams to evolve a 21st century investment mindset and take on a new financial toolbox which could include, as just one example, through- put accounting, which was developed to support Teory of Constraints installations and promotes systemic performance improvement as measured by throughput at system constraints. But for those farsighted enough to see the inherent limitations of through- put accounting, and convinced as I am in the centrality of scrap and lead times, new metrics are called for. One such measure is lead time reduction, calculated as the product of a baseline average lead time number divided by a current, hopefully improved one. Another is the true cost of poor quality, which encompasses the usual preven- tion, appraisal, and failure costs along
with the tangible and opportunity costs associated with lost capacity, diminished productivity, and damaged customer satisfaction. Management teams need to
employ these and other contemporary thought processes and tools to unleash the power of non-traditional invest- ments, drive systemic improvement,
and dramatically improve profitabil- ity. Doing so will also enable them to fully embrace the transition from growth to maturity and support a transformational approach to human resources management, one which champions essential investments to recruit, develop, and retain a 21st century workforce.
ONLINE RESOURCE
Read more from Dan Marcus and his regular CEO Journal column at
www.moderncasting.com
October 2014 MODERN CASTING | 37
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