THE ACT

Are you aware of the Unemployment Insurance Integrity Act (The Act) signed into law by President Obama on Oct. 21, 2011 with an effective date of Oct. 21, 2013?  Most businesses are, but there are some for whom this law did not hit their radar.  The law is titled Trade Adjustment Assistance Extension Act of 2011, (TAAEA) and buried in The Act there are two phrases that all employers need to know: “timely and accurately” and “demonstrate a pattern of failing to respond”.

WHY THE ACT?

The questions these two phrases are trying to answer are:

• Is the state UI agency receiving information from the employer that qualifies an unemployment claimant as eligible?  So, The Act requires the employer to respond the UI agency “timely and accurately”.
•   If the state UI agency is experiencing this problem with an employer, is the employer also “demonstrating a pattern of failure to respond”?

Unemployment is a costly program, so it’s crucial to all concerned; the claimant, the employer and the UI agencies, that the claimants receiving unemployment meet the eligibility criteria of having been laid off or fired for just cause; or employees who have had their hours involuntarily reduced.  The UI agency must receive a response “timely and accurately” in order to determine the claimant’s eligibility.   The time frame to respond is clearly noted on the request for information form.  Most states have a 10 to 14-day window from mailing date of the request for employers to respond.

When an employer doesn’t respond, there are often varying reasons:  a) already paying the highest experience factor; b) a sense of ‘the employee always wins’ c) lack of knowledge of UI requirements and processes or a host of other reasons.  But, regardless of the reason, a continued lack of response to state UI requests will determine if the employer “demonstrates a pattern of failing to respond.

Noncompliance with The Act could become costly for the employer.  The Act does not define any penalties for noncompliance, the state will define what those penalties may be.  The state will also define “timely and accurately” and what “demonstrates a pattern of failing to respond” looks like.

HOW SHOULD YOU REACT?

Compliance with The Act is not as intimidating as it may sound.   A few simple steps could make all the difference.

• Does your employee and supervisor handbook have clearly defined policies and procedures regarding employee conduct and employer expectations?  Is it up to date?  If you’re not sure, now is a good time for a review!
• Do you have a dedicated person or department handling UI requests for information? Are they knowledgeable in applicable laws specific to the state?
• If you have a Third-Party Administrator (TPA), review the contract and be sure everyone understands their role in the UI process to ensure the smooth flow of needed information between employer and TPA to meet all required deadlines.

A good plan that is well communicated and understood, coupled with a solid training program is an employer’s best protection.

In recent days I have been struggling with a question. Does an NRMCA QMS Certification really offer as much benefit to the local and regional producers as it does to National and Multi-national groups? Or in other words, why should you invest any time, money or resources on a certification that only the big players can afford to secure? Where is the return for my company?

Unanticipated Expense or Loss

For any size producer unanticipated expenses or a direct loss impact the bottom line. But as the size of the organization gets smaller, the negative impact of each expense or loss gets larger. The greatest percentage of these unanticipated costs/losses are created either by or during the production, delivery or QC/QA segments of the process. In virtually every instance, some activity or action occurred with loose control of the process or perhaps it was a procedure that worked mostly but was only as effective as the training and capability of the person in control.

The Direct Benefits of QM

• Reduction in cost per CY
• Reduced losses  due to warranty expense
• More consistent performance by production, delivery and quality control
• Higher product quality and performance consistency overall
• Greater customer confidence

The Indirect Benefits

Any producer can develop a QMS that results in an NRMCA certification. The first benefit is it is tailored to the individual producer and their specific environment it reflects you and builds ownership by every team member through direct input as the system is developed. Secondly, it provides the team with a consistent process to follow regardless of the demands on the organization. Third, opportunities for identifying problems before they become added costs or lead to losses including clear processes for addressing those that do occur.

Purpose

A recent article written by John McManus and published on Builder Pulse Online/Hanley Wood focused on purpose. In part he writes “who are we?” and “who do we want to be?” To further make his point as to why these questions should be important to any company, he referenced the following quote taken from Black Rock CEO Larry Finks annual letter to CEOs which reads in part:

“To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society. Companies must benefit all of their stakeholders, including shareholders, employees, customers, and the communities in which they operate. Without a sense of purpose, no company, either public or private, can achieve its full potential. It will ultimately lose the license to operate from key stakeholders. It will succumb to short-term pressures to distribute earnings, and, in the process, sacrifice investments in employee development, innovation, and capital expenditures that are necessary for long-term growth. It will remain exposed to activist campaigns that articulate a clearer goal, even if that goal serves only the shortest and narrowest of objectives.”
(Larry Fink Annual Letter to CEOs 2018)

QMS Has Value Beyond the Bottom Line

There is definite calculable benefit to developing and certifying a QM system for any size producer. But the greater long-term benefit may well be that it defines the group internally and externally by stating clearly and with every load produced and delivered… This is our PURPOSE

Your Brand Your Choice

Way back in  your company’s history your “Mission Statement” laid out to potential customers not what you intended to produce, but rather how you intended to be different from and better than your competitors. If you are still in business today, then chances are you were successful in fulfilling most of the promises you made in that original “Mission Statement”. Or, perhaps somewhere along the line you determined that a new direction was needed and after much “research and discussion” you completely revamped your stated mission in an effort to regain your appeal to, and your share of the market.

In either case, you bet your future on your brand being different, current and full of intrinsic value that no one else could offer. It sets you apart, makes you better, even makes you the “obvious choice”. Done and done you say? It would be if that was the sum total of what your brand really is!

What Else Determines Your Brand ?

Your customers past and present have developed an entrenched perception of who you really are. That perception effects every decision your customers and potential customers make. Every experience they’ve had with your company good and bad, is weighted against what you say your brand is and what your organizations actions and customers perception say it really is. Like it or not your brand is the entrenched perception of customers and the market. It is the cumulative result of actions by every person in your organization and the performance of every piece of equipment and every product every time. And customers will use it every time to beat down your price.

 Changing Entrenched Perception

Every producer in the industry believes that their teams are the best at what they do, and that belief is more often than not correct. So they leave it to their expert team to maintain the brand umbrella. And when the brand is negatively impacted by an action, activity or failure to live up to the branding and entrenched perception is negatively impacted, they look to their internal experts either individually or as teams to save the brand. Because they are good at what they do, they are asked to  identify flaws, develop plans, design and implement solutions. All while monitoring changes in processes, and or systems, evaluating the outcomes, managing change and performing their daily functions. Your people are the best at what they do! But they don’t do this!

Remember, these are the people who created the entrenched perceptions that have become your brand. They are really good at what they do of course, but they are also the people who hold the handle of the brands umbrella. And this last observation is exactly the one that your customers zero in on when you start to talk about change! It becomes the great “Yeah But” in changing the entrenched perception and maintaining or regaining credibility, sales margins, market share and TRUST.

Customers, competitors and the marketplace in general all realize that lapses by your people, inconsistencies in your processes, procedures, unbalanced systems, or accountability issues are what created the negative entrenched perceptions. They will often say or hear “expect some problems in that area or, depends on what plant or, is so and so still there”  all based on observation or personal experience. They are just as aware, that if your best were capable of or cared enough to fix the problem, they would have. After all, your organization has been made aware of them time and again. So even though you may be committed to fixing the rip in your brand umbrella, and your best internal experts have been tasked with designing solutions, the entrenched perception (and most probably the deficiency) is not going to change.

Your Experts Need Three Things To Succeed

Executive Management Support

Executive management has to move well beyond the old tried and true here’s the problem, I know our people can fix it and we’re behind them all the way traditional support system. That approach is the posterchild for Einstein’s definition of insanity (Quote) and also plays into one modern iteration (Ken Brand) on the definition as well. Executive management must recognize the limitations of their internal experts both in their qualifications and ability to identify core issues, develop plans, design and implement repeatable solutions, and evaluate the outcomes. They must provide genuine support by partnering their internal experts with external experts who “Do This“.

Fresh Unbiased Eyes

External experts carry no baggage or agenda. They bring fresh eyes and best practices tools with which to evaluate the problem, and the ability to identify core issues. It is also their mission to partner with internal experts to develop processes and systems that provide repeatable outcomes based on the specific circumstances. Equally as important, is their ability to educate employees in the why and how of new processes and systems. Their work should also include specific assignment of accountabilities to ensure clarity in monitoring and evaluating the outcomes.

Customer and Market Trust/Belief

There is no value or gain in any attempt to rebrand or adjust the entrenched perception if your customers and market don’t believe you’re committed to change. They must be convinced that what they are hearing is not “same song second verse” or all talk and no action. They want and deserve proof. Proof of how, of when, of repeatability, of consistency and most of all proof that you have heard the “Yeah But” and understand that both the old and the new definition of “insanity” are correct.

Their Services Could Be Described Either Way

While doing some online research the other day, I happened on an article titled “Company Therapist”. http://www.comstocksocksmag.com/Archive/0112_F_Company-Therapist.aspx  It was written by Anne Gonzales and contained  the story of a Ready Mix producer who began his career as a laborer, built his own construction company and ultimately entered the construction materials business. He describes why he sought help and how he feels about the result.

The article very aptly conveys reasons for seeking out the services of business consultants. At the same time, it provides a real life example of how external experts can add value to your business.  It also provides some insights regarding internal personnel and how and when they are best utilized.

I hope you’ll take a moment to read this interesting and informative article.

You’ve “Leaned ” Out Your Operations

Producers large and small, local, regional and multi-national who are still operating today are much different than they were before the economy tanked and construction followed suit.  Every plant in your organization (those that have not been mothballed) is staffed by your core group of employees.  These are the individuals that represent the best your company has to offer it’s customers.  They are the “cream of the crop” at customer service, professional delivery of products, sales, maintenance, production and quality control.  With few exceptions, these people are efficient, effective and know how to squeeze a minute and safely get two minutes of profitable productivity!

An unexpected result of your efforts to survive by leaning is that, you have managed to provide several value added benefits to every one of your customers :

• Predictable performance
• Knowledgeable and professional personnel at every point of contact
• A commitment to doing whatever it takes to meet the customers needs

These are just a few of the unanticipated benefits.  I’m sure that you can identify many more. My point is, your intention was to cut overhead and hopefully be competitive in pricing while still eking out a small profit.  The external result is you really raised the bar in terms of customer expectations.  TODAY that is a GREAT thing!

Tomorrow, What Does That Mean?

It could mean that your volume will increase beyond your historic market share as the economy and construction rebound.  OR, it could mean that your volume won’t increase and in fact your market share may be reduced!  Why? The former is more likely to happen if you have a “system” and “process” in place to make your new hires functionally competent from day one.  The latter is the more likely outcome if you simply increase the size of your workforce and attempt to “train” them on the fly.  This approach will not only result in bad interactions between your customers and new employees, but also dilute the performance of your “core” group.

The Key To Thriving During A Recovery ?

Effective Knowledge Transfer as you increase staff size.  Now is the time to develop the tools, processes and systems that will make your new hires “professionally functional” from day one, filling the knowledge gap while your training programs build their in depth understanding and increase their skill levels.  Designed and used correctly, these tools can provide new employees with step by step operational procedures that protect the quality of your products, the efficiency of your operations, and preserve the level of professionalism your customers have come to expect.

Ask Us

If your organization doesn’t have a proven system to transfer knowledge, give us a call.  We can help you Thrive During A Recovery.

What Is A Quality Management System

The idea is to create systems that lead to consistent quality for all ready mix concrete operations and document those systems and processes in a formal “Quality Plan”.  In February 2008,  “Quality Management System for Ready Mixed Concrete Companies” was published by NRMCA http://www.nrmca.org/p2p/qms%203%20parts%20small.pdf .  Parts A and B were prepared by William C. Twitty, Jr., P.E., and Part C was developed by the NRMCA P2P Steering Committee.

In the summer 2008 edition of Concrete InFocus the feature article written by Colin Lobo, PH.D., P.E. Senior Vice President of Engineering, NRMCA provided further insights into the reasons for establishing the system within companies and also the 15 sections that comprise the system. http://www.nrmca.org/research/cif-summer-08-quality-plan.pdf.

How Do I Start ?

Step One: Observe and document the current realities very closely:

• Company Reputation
• Customer Composition
• Market
• Products and Services
• Management Focus
• Current Mission Statement

Step Two: Evaluate the information developed in Step One to determine where your organization is currently.

Step Three: Create the “Introduction” section of your “Quality Plan”.

OK, Just Forget It!

If you’ve gotten to here in this blog post, and if you’ve skimmed through the 261 pages of the QMS for Ready Mix Companies, and hopefully read the entire article in Concrete InFocus 2008 you may be saying “OK, Just Forget It”.  There was a time when I would have said the same thing.  I’ll even give you a few of the reasons I would have used (some with a firm sense of righteous indignation I might add).  In no particular order…

No time;  No need;  No money;  Not enough people;  Not enough potential “ROI”;  Not that type of market/ customers;  Just plain ” We’ve gotten by without it just fine”.  I know I’ve covered some of your reasons, but I’m just as certain that you have thought of more than a few of your own.

Don’t “Forget It”.  You’re Farther Along Than You Think

If your observations in Step 1 have been unbiased, and your evaluations in Step 2 honest, then you have already “defined” your current market position.  Completing Step3 will not only provide you with a clear “statement” of your companies commitment to “Quality”, but also what changes management believes will result in the greatest gains in the market.  The statement will also provide a framework for evaluating your current “systems” as you review operations as described in Sections 3 thru 15 of the “Quality Plan”.

At this point, your organization is well on it’s way to being able to create a “QMS”.  To be sure there is still ALOT of work yet to do, but there are numerous ways to approach and complete the document and it’s systems. And there is help available without creating or committing to long term increased employment overhead if you desire.

Producers Often Lean On “Quality Control” To Gain Sales Advantages

Ready Mix and Aggregates producers love to tout their “Quality Control”.  Sometimes they talk about their QC Department, or their QC Personnel.  Often the talk is about their focus on making sure that the product that is delivered to the customer is “in spec” and will meet all design requirements for content and performance.  They point to the past “performance” of their mixes or the consistent gradations of aggregates delivered.  “Customer X took the low bid and started with the competition but came to us after they rejected four loads in a row in the middle of a pour and ended up with a cold joint. We finished the project and delivered 1500 CuYds. all in spec”.

On the surface, that sounds like a solid foundation for building a sale, and in fact, it is a part of the foundation.  But before we continue to build our organization on a partial foundation, let’s take a look at a few other things.

What Did The Customer Want To Hear When You Promised QC?

• Your dispatch department will answer the phone without making me wait forever or putting me on hold.
• I’ll be able to place my order and get delivery on time, every time, no matter what the volume is.
• All of your people are the “best at what they do”.
• All of your constituents are in specification, in inventory and handled correctly.
• Your plant is well maintained and there is not a chance it’ll go down.
• Your company has plenty of trucks to deliver my order no matter who else they have on the books.
• All the drivers are going to be able dump their loads and then get out of my way without me babysitting them.
• My crew won’t be held up waiting on the first truck / last truck / clean up or while a load is replaced.
• I don’t have to worry about low slump, high slump, low air, high air, sticky paste, a rocky mix, early set, delayed set, strength issues, and certainly no gradation problems with crushed screened materials.
• The tickets will all be priced correctly, delivered in sequence and contain information that lets me compute the yield or total the tonnage so I can prove I was shorted.
• When I get the invoice from accounting everything will be correct so I don’t have to spend my time on the phone arguing.

Yes, all that from one statement!  Is it any wonder that your “Quality Control Department” is under staffed, over-tasked and can’t always meet the expectations of your customer?

So What Is Quality Control Really?

True quality control in the view of the customer is the assurance of the consistent performance of every process and system in your organization every time. Anything less and you have failed to meet their expectations.

 Check Back For Our Next Installment On “Creating a Quality Management System“

That First Impression Counts!

When you look at the attached photograph, what is the first thing to pop into your mind? “Yeah, so?” or “OMG!”.   If it was anything remotely like “Yeah, so?”, then we need to talk.  Housekeeping is important at many different levels.  Think about what that image tells your customers, your employees, your boss and regulators.  Let’s explore why housekeeping matters.

Your Customer

Maybe you are a firm believer in keeping your trucks spotless because you want customers to know you run a tight ship. But keeping the yard up is just not a priority.  The problem is people drive by your facility everyday and can see the mess and clutter from a distance.  If your yard is a mess and your competitor’s is tidy, even from a distance, do you think that makes a difference?  To a lot of people it does.

Your Employees

You constantly talk to your employees about keeping the fleet clean and focusing on QC and safety, while supporting another part of the facility that is a mess. This sends mixed signals and makes it difficult for your positive messages to be received. Its pretty hard to improve your processes and systems if housekeeping is a focus in some areas and ignored in others.

The Regulator

The inspector shows up for a site compliance audit.  Good housekeeping can disguise or cover for many potential sins.  If the inspector documents  housekeeping is a priority (particularly inspection after inspection), then over time you get that coveted “Good” reputation.  And possibly the time spent on-site using your staff resources or the depth of the digging may not be as severe.  When inspectors see a sight like our photo example things could get ugly!

How Does Good Housekeeping Improve Your Bottom Line?

Besides improved aesthetics, how can focus on good housekeeping improve your bottom line?

• Almost by definition, good housekeeping leads to good safety and environmental regulatory compliance.  Better compliance leads to fewer accidents, incidents and fines (cleanups, workers comp claims, etc.).
• The public cares about you being a good corporate neighbor.  If you clearly care about your facility and neighborhood, they will remember you and want to be a customer.  They are more likely to believe you are selling quality product.  Same with your regular customers.  It is pretty hard to win a QC argument when your place is always a mess.
• Clutter equals wasted assets.  All of that stuff that has sat there forever ends up being wasted product or unused equipment.  You paid good money for that stuff, either store and use it, or if you do not need it anymore, sell it.  Having a clean facility really allows you to focus on what you need and use (and order).
• Here is the good part!  When you make housekeeping a priority it becomes part of the training for the improved system or process.  Pride, efficiency, customer satisfaction and cost savings come from those improvements.  Take the time to clean up and fix up and keep it that way.  It pays!

A Good Starting Point For Understanding Operational Process Improvement

Everything that everyone in your ready mix or construction aggregates business does is part of a process. So if you want to improve your product, organizational performance and profits, while increasing value to your customers, you have to focus on improving the process.

By placing your emphasis on process improvement you can avoid the typical trap that many business leaders seem to fall prey to.  Payroll is a big number, looking to cut costs I will focus on trimming payroll, forcing people to do more with less.  That is not necessarily process improvement.  This view of being “lean” is that less people results in maximized operational efficiencies and margins. The reduced staff approach often produces a brief bump in performance and margins. However, in the long run organizations can end up with increased costs, reduced value to customers and a poorer competitive position in the market due to overworked people and processes. Organizations that commit to process improvement do so with substantially reduced risk of destroying value when compared to short term approaches.

Systems Form The Links

Systems are links in the chain connecting  consistent and repeatable  performance.  Systems help you have predictable outcomes and reduced variability.  Variations are the opposite of “quality”, and by reducing the “variables” (improving quality), we can begin to continuously improve the process.  It may be that reducing staff is, or is not an outcome of process improvement. Either way your systems become more efficient and your people can accomplish more with less stress and variability.  That is a healthy improvement.

How Do I Start?

By observing reality very closely.  Not what you want your staff to do.  Not what they say they do.  Not what you hear that they do.  Observe what they really do.  Document every step.  That is your starting point.

How Does Your Company Approach Operational Improvement?

Every company wants to improve operational performance.  Of course, its obvious.  But how?  We have seen many approaches over the years.

The first instinct is to task operational managers with the mission.  “Look at your operation and make it better.”  Hmm.  How does that work?  This fellow is already managing day to day operations and he may have setup the way it works now and does not see any flaws.  This is just another thing to do in an already full day.  This approach might work, but probably not.

Step two is to send in the “Tiger Team” or whatever corporate wants to call them today.  This is an internal corporate group of experts who will come and spend some time at a facility and make suggestions based on experience, corporate policy and what other groups in the company are doing.  This approach has a much better chance of making some improvements if they followup and keep working with the operations manager and his team.  But there is a glaring flaw in this approach.  Politics and viewpoint.  Face it, when the corporate team shows up the local staff is probably going to be on the defensive.  Why did they come?  Are we on the chopping block?  Who do they report to?  And so on.  The corporate team is also going to own the corporate world view.  Do they really have the fresh eyes that allows an unbiased look at operations?

How Can A Short Term Embedded Consultant Jump Start Operational Improvement?

Everybody “knows” consultants are expensive.  They also do not understand exactly how your organization works.  They are more trouble than they are worth.  Hmm, is that all true?

Sure, consultants are expensive.  They are like bringing on another expensive employee.  The difference is that they go away when the job is done, while hopefully their benefit carries on for a long time if they have done the job well.

And yes, consultants do not initially understand your organization and if improperly used are more trouble than they are worth.  The advantage of a short term embedded consultant is the broad range of experience they bring and the fresh eyes.  The way to make the consultant work is to team him with the internal experts.  The internal expert can manage the range of the assessment, focus the insights and make sure the solutions fit the culture so that all important buy-in is gained.  The internal expert is the gatekeeper and corporate interpreter.

But, you must let that consultant really “see” what is going on.  Let him question and experiment with your internal experts and operational teams.  Those fresh eyes can see a lot that the local team or the corporate team may not see because it seems routine to them.   The consultant also has no internal political baggage and no authority.  The consultant can be much less threatening and can get the local staff to open up.

Finally, the worst thing an operational consultant can do is come, see, write a report and leave.  The well deployed operational consultant works with the internal experts to develop the implementation plan and materials to make the recommendations happen.  They help the company and operational managers over the “hump” of change.  They are there to help with the training, and to answer the questions that come with change until the organization accepts and embraces the new systems and processes.  Then what?  The consultant has worked himself out of a job and leaves behind systems and processes that replace his expense with ROI.  We like doing that.