The Manufacturing Executive
The Manufacturing Executive

Episode 94 · 7 months ago

Adapting to Change: Manufacturing Leadership Excellence w/ Dan Burgos


What are the best manufacturing executives doing to combat labor shortages and supply chain issues and thrive in this industry?  

Today’s guest is Dan Burgos, President and CEO, Alphanova Consulting, knows the answer. 

Dan and his team have over 15 years of experience helping manufacturers in various industries, including aerospace injection molding, construction projects, chemicals, fiberglass, furniture, electronics, consumer goods, oil and gas, and medical devices, among others.  

Dan's approach is to partner with leaders to uncover and eliminate the problems hindering business performance, while coaching leaders to create a culture of collaboration. 

Join us as we discuss:

  • Quantifiable metrics that affect business performance
  • Leadership when facing labor and supply chain issues
  • Improving on-time delivery and reducing scrap   

Take Alphanova's Business Self Assessment to receive recommendations for your manufacturing operation here:

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Everything is driven by the behaviors, by the culture, by by People's willingness to to affect change. We strive on not doing the work for the kind necessarily, but more as a catalyst for change, teaching them these new values, these new behaviors and these new systems so they can take them and run with them. Welcome to the manufacturing executive podcast, where we explore the strategies and experiences that are driving midsize manufacturers forward. Here you'll discover new insights from passionate manufacturing leaders who have compelling stories to share about their successes and struggles, and you'll learn from B tob sales and marketing experts about how to apply actionable business development strategies inside your business. Let's get into the show. This episode is brought to you by prolific, an account planning solution that enables manufacturing sales teams to log key information and build account plans right inside of sales force, rather than resorting to sticky notes, spreadsheets, white boards and slide decks. Learn more at prolific dot AI. That's pro o L IFIQ DOT AI. Welcome to another episode of the Manufacturing Executive podcast. I'm Joe Sullivan, your host and a CO founder of the Industrial Marketing Agency Guilla seventy six. The past few years of brought about all kinds of disruptions to our businesses, from supply chain to Labor to a pandemic, and times like these will force manufacturing leaders to look hard at both the quantifiable and less quantifiable things that affect business performance, because, frankly, there's just less room for error by guess. Today, a seasoned consultant to the manufacturing sector is here to talk about both. Let me introduce him. Dan Burghos is the founder, president and CEO of Alpha Nova Consulting. Alpha Nova is a management consulting firm that helps manufacturers achieve and sustain operational cost reductions of twenty percent plus, improve on time delivery to ninety nine percent plus and reduce defects to improve product quality to ninety nine percent plus. These changes help their clients grow company profit margins by up to twenty five percent. Dan and his team have over fifteen years of experience helping manufacturers in various industries, including aerospace, injection molding, construction projects, chemicals, fiberglass, furniture, electronics, consumer goods, oil and gas and medical devices, among others. Dan's approach is to partner with leaders to uncover and eliminate the problems hindering business performance, while coaching leaders to create a culture of collaboration. Dan, welcome to the show. Yo, thanks for having me. Thank you, you bet. It's a pleasure having you here. So, Dan, can you kick things off here by telling our listeners just a little bit about your own personal journey and how you got to where you are today? Sure, yeah, definitely. So then, Burgo so, that's a Spanish name. I'm originally from the Dominican Republic. That's why that's where the accent comes. Native language is Spanish. So my journey came from you know, I wanted to help and and add my passion is solving problems and just helping people. My background and education is in those engineering and not have other education that also relevant. But basically I went into manufacturing back in two thousand and six and, you know, started helping and learning before in my care in my in my years, I knew I wanted to be in consulting, I wanted to be service and that I wanted to help and in my father and still len me that that entrepreneurial mindset and it just came out as I became an adult and I just always had that vision even before I finish college. So when I would when I first started manufacturing, I was exposed to some manufacting consults basically, and I said, okay, I think that's...

...what I wanted to do, that's how I want to help. I saw the impact that they were able to have. So again, of course, at that time I wasn't ready to start that on that journey, but basically I moved from implementing improvements and I knew that every time I moved or change companies I wanted to see something completely different because I wanted to be exposed to as many different technologies and people in mindset so that I could share that and that valued to clients so that I felt that that would always be an enriching experience for for for my career. So I did dad work for an oil and gas company. After that, very large corporation and if you got on my website I share some of that. I experienced what corporate culture was like. I learned things like a red tape. I read things like seagull management. Some we would have to Google that. That's probably not you know, just something people shared and basically learning through those experiences. I said, well, culture is so important in people, you know, leadershhip behaviors, and that's when I said, you know, I don't want to be the person that preaches and teaches, I want to be the person that's walking your shoes and that can actually, you know, share experiences. And so after that I said I want to actually go lead on operation and just have that experience, and I pursued that and actually we're we're able to get involved in a medical device company and I let operations and in that depermanent started with a line, then they gave me the whole operation. It was a relatively smaller operation, but but had a lot of challenges and I was able to regain my confidence that I had loss from working in a dysfunctional culture and made a lot of improvements in terms of their operation, the results. Coach people developed. Learned a lot of lessons, leadership lessons, along the way, such as caring for your employees and being there, be supportive, as supposed to see yourself as the authoritative figure. Past that, I started getting involved in supply chain, so that gave me a completely different aspect you know the logistics of the business and in contracts for suppliers and really be strategic about your your probably race. And then after that I started in consulting. That's when I felt I was ready for for that journey and after a few years of working for another consultancy, I decided to go on my own and really ready for that entrepreneurial journey, and that's what I've been doing ever since and it's just the joy to be able to work and collaborate with folks the that's for some reason always find it races the hair my back to see success and see people that really want to make a difference for their business and we're just along there for the journey to help them get there. Dan, obviously the last few years have posed some serious challenges to manufacturing leaders, most notably the ones I hear about time and time and time and time again, our labor and supply chain issues. So I'm curious from your perspective, what do you see manufacturing leaders doing, or what can they be doing to put themselves in the best position possible during times like these? Yes, definitely, and it's definitely a theme I've been seeing out in the marketplace so, to answer your question, some of the things that I would recommend to consider and see if these are things that you can capitalize song are looking at things on the materials, on the supply chain side, looking at your inventory turns. Right, are we turning the inventory as fast as we possibly can? Because when you don't do that, you leave yourself open for damages, for up obsolescence and other things that can hinder your station of the material. Another thing that I tell manufactors to look at is look at the quality, the scrap, the reward, the internal defects in your operation. The the highest, the higher that you can make that yield for for your operation. But we call the first pace yield. To put it in simple terms, it's doing it right the first time. Right. If you have things that you have to rework repair your you're...

...not capitalizing in the universation of the material and hence that forces you to buy more material because there's a portion of that that's going to waste. And then the third one is having looking at your suppliers and developing supplier partnerships. You know a lot of suppliers see you know there's a lot of manufacturers look at their suppliers and they think about them as venders, interchangeable at any time. The smarters want the smartest ones. Look at their supplier base as partners, right, and how do we develop the best partnership so that when times of risk come along, we have a we have we have people or business partners that are going to support us in those times, and now it's definitely one of those times. And then you mentioned the Labor side. Other things that people can do is that people can do our gain efficiency, right, the the grade resignation as people are calling it these days. It's putting a lot of burden and manufacturers to go hire that Labor. Well, think about this. If you become more efficient, then you might have less of a need for labor. The other part of it is how do we retain that talent, and that's where I recommend manufacturers to focus on employee engagement, to invest in developing their leaders both on the handling of their operation, in managing of the business, but also of engaging their workforce. Nowadays, people care more about culture, the environment, the purpose of their business. And then another thing that I've been seeing more and more. Sure it's become visible for for a lot of others, it's people are resorting to automation because, if you know, if we can't get manual labor to do this, well, how do we figure out if we can automate this and and eliminate the need for Labor? Those are some of the things that I'm seeing that I recommend. I'm sure there's more, but those are some things to consider, definitely those two cases. Yeah, all great advice there. Dan. As an advisor to manufacturing leaders, what do you see as some of the most important quantifiable metrics that affect business performance? Yes, very good question. So I'll explain it at a systemic level and then I'll give you some example. So the way to think about this is in it's going to be in order of priority. First, we want to care about a care about our people. So we look at safety, right, we want we want people to come in and leave in the same condition that they arrived in the morning or at the beginning of the shift. Then you have quality, right, you want to deliver quality product. The next the next categories D for delivery, which is delivering your orders on time, and then the last one is cost. You want to make it in an efficient fashion so that you have large enough margins to sustend your business and continue to grow and invest. So going back to the s categories or metrics under that would be safety, incidence, hours between incidents. Yeah, for safety. If you look at quality, when you can look at things like, as I mentioned earlier, first pass yield were doing it right the first time, what percentage of your products are produced without without defects? It could also be customer complaints. So those are some of the ones. On their quality, on their delivery, you have on time delivery of force. It's one of the most common ones you see out there. But the caution I give manufactor is is there's a difference between on time delivery to to what you promise the customer and they accepted, versus what they requested and you were able to fulfill. That's the that's the big difference on that one. And another one, maybe a little bit more of a leading indicator, would be schedule attained. You know, are we completing the schedule and production as we are laying it out, are we falling further and further behind, which would be a leading indicator for late orders in the future? And then on their cost, I would say things like efficiency or Wayte to measure productivity. It's very common to seeing dollars per per per labor hour or hours, labor hours per unit produced. Another one that I see often in... process manufacturing, things like chemicals or or solvents, would be overall effective equipment. Effective overall equipment effectiveness. That looks at quality, looks at the availableity, meaning the up time or downtime of the equipment, and then the speed. How about some of the things that maybe you know not stuff? You'd finding a spreadsheet that the less quantifiable things that also affect performance that may sometimes get overlooked? I'm glad you ask that, because this is this is so important for for success. You know, there's any question that we believe in, it's that. You know, you want ideal processes, but you also want ideal behaviors and both of those are going to be you do ideal results. So some of the things that you want to measure or any back up for that? I want to give you an analogy that I think has a lot of learning for your audience, and that is, you know, when people want to engage in this journey of fitness or improving their fitness, people go and purchase equipment or they get a gym membership and they get anamored with that. And what we fail to do a lot of times to be effective and those kinds of journeys is that we neglect the other side, the behavior side, the nutrition side, you know, the things that we choose to do that are going to give us or success. And I think that's the part that I that is so critical, that it's not tangible. You're the leadership behaviors, the things that are going to engage your workforce, because it's not going to be one person or small group of people. Typically manufacturers have dozens of employees, and so the more engage, the more you can tap into those, into those those minds, the more success you'll have, more so than focusing on just the process and the tools. Anyone can master those, anyone can learn those, but if the behaviors are not there, the tools have a very small chance of success. Got It. So what do you think some of those things are leadership qualities, engagement with your team, like, yeah, exactly, the engagement of your employees, turnover. You know, there's a saying out there that people leave their leaders more than the organization. So if you have a lot of turnover. There's a good change that you know they're not happy with the work environment. So you want to have a handle on that, on that. That's intangible but very much connected with the performance of the business. So not just see people as Labor. There's a saying I heard some years ago. I, like you know, engage that not only their hands but also their minds. Also having the right leaders in the right seats. You know, a lot of times manufacturers of all don't take action when they know they have a leader that being having an having a negative impact on the the culture and that spreads out and the higher the leader, the worst the effect on the culture. So those are the things you can't measure, but but they have so much impact on the success of the business that you see eventually show up on the financials. Yeah, you mentioned having right people in the right seats. That's what we had gorilla like. Probably a decent amount of people listening here in the manufacturing sector are you know, we run EOS, or the entrepreneurial operating system, and in our business and based on traction, the book by Gino Wickman, and that's what that's something that he talks about a lot. Is sometimes you got the right people but you got them in a role that's not right for them. Sometimes you don't have the right people, I. Don't fit the core values, and you're forcing them into a role that's that's just not going to work. So I see that in my world for sure, and I'm sure a lot of listeners are not in their heads as you say that as well. Yeah, I'm very familiar with the IOS system and he lays out a very good a good method for basically looking at, you know, their character. It's looking at character and competence and you know. So what I see...

...a lot of is people, you know, ladge onto the competence and neglect the character and in reality should be the opposite, right, let's focus on having good character, people that line up with our with our values, and then we can teach them what they need to learn and then we'll be successful on that in that in that fashion. Let's take a quick break for a word from our sponsor. Sticky notes, spreadsheets, white boards, slide decks. For many manufacturers these are the places where key account details are stored, but the most effective manufacturing sales teams today are leveraging technology for strategic account management and for maintaining customer relationships. Two of those tools, prolific relationship map and prolific crush, allow for real time visibility into key account growth, new business pursuits and which customers are at risk and all right inside of sales force. Learn more at prolific dot AI. That's pro LFIQ DOT AI, and you referenced in Industry Week Study in a previous conservation that you and I had. It said something along the lines of seventy percent of manufacturers engage in some type of continuous improvement, but only twenty four percent see significant results. Why do you think that happens? Again, goes back to what I mentioned a little bit ago. It's it's the seen seeing these initiatives as a program so a lot of these leaders, when fortunately, see it as a program as as a temporary activity that's going to come and go and it'll, you know, reap the fruits that we're looking for and then, you know, we'll table it and that'll be that. And unfortunately it has to be. It has to go beyond that. You know, leaders have to understand again the behaviors and the processes are going to give you the result if you really understand this requires commitment and rate, who requires you to really put much more effort than it's just a temporary program you'll be much, much more successful and you'll have a much better chance to have significant impact. And it takes time, but the results will will keep coming further, you know, over time, past the initial stages of implementation, and I think it's always helpful to hear a tangible story to, you know, kind of illustrate some of the things that my guests talk about. Are there any success stories that you can share with the manufacturing leaders listening today where people have applied some of what we've talked about in this conversation in a real world situation? Yeah, definitely. A current client actually comes to mind. So let me give you. I guess I run out of the story. We engage with this clim just about a year ago and they called as because they there their operation was struggling, the business struggling. So, just to give an idea, their own time delivering was as slow as fifteen percent. So imagine that you only deliver on time fifty percent of your orders, your clients are not going to be happy. So if you the owner of that business, you know thinking how do we get this on control? So that was one low point, but the average was more right around thirty nine percent. They had scrapped above six percent of sales, which is significant. I would say you want to be below three percent, at the very least two to to be able to be competitive and profitable. They have problems such as, you know, equipment downtime, you hindering the operation and a lot of interruptions. There were no metrics to measure to know success and and things were not, you know, standardized, coordinated and put into systems. So we came in, we assessed, uncovered all those opportunities and been engaged with them for a year. And just to give you an idea of some of the success we've had, let me just fir share maybe what what we've some of things we've done. We've put metrics at the strategic level, at the business level, so now ownership has and leadership has...

...a much better understanding of so picture a dash board of all the key metrics at the trends and understanding week to week and, you know, to day results. They know the trends, they can be proactively addressing things. We've put metrics up on the production floor so that people are able to address issues again proactively. If we address these issues and the operation later on, they, you know, will get the results in the financials when management leads and look. So we've engaged in a journey to teach leaders the right behaviors on managing operation, but also on coaching and engaging and making decisions and delegating other right levels of people stay engaged and they don't. They don't feel like they're not contributing where they have more potential to do that. We want to tap into every mind that's involved as long as they can have value it. Just to give you some of the results that we've accomplished, or we have this fine accomplished. You know, they're holding steady at ninety seven percent on time delivery and there's been several weeks that they've hit a hundred percent. Their scrap has been caught in almost half. So they're holding right around that three percent of sales and the goal which which you know, some eyebrows I've been written as a result of this, it's to go below that one percent. We also tackle the equipment problem. You know, we assess where are we vulnerable and where do we have critical equipment that's formiable and we've put a action plan in place to tackle those things and we have strategies around doing those things and really pushing these leaders to put systems in play so that, you know, the the problems that surface don't keep happening over and over and over again, which, unfortunately, is is the big, you know, the big impediment for for making progress. Yeah, so it's been about a year with with this client. There's much more accomplished and they are a vicious and they want to go to places and this is just the beginning. I see way more improvement. So those are drastic changes and improvements and results. But the potential is, unfortunately, that a lot of manufacturers don't realize that just because it takes longer. But you can see so much benefit from engaging in this and really building it into your business that I think that's part of why only twenty four percent, as the study showed, really see the benefits. And for any manufacturing leaders that are listening, where do you get started trying to make some of these changes that you've been talking about today, and how long does it take to start seeing results? Yeah, so let me talk on the first part of your question. You know his. What I tell leaders and when we're having the conversation about possibly engaging us, is be committed, and that starts with getting educated. It's make sure you see this not as a, you know, a process and initiative that you're building. It's it has to be your building, as system. You reference the EOS. That's assistant. That's a business management system, and and so any type that you pay where, whether it's lean or eos or any other, make sure you you're committed fully and that it is a system. Understand what you're getting into and understand that by being committed, you may have a laundry list of obstacles, which may include internal people, people that you might respect and people that you may have to make a decision. You know, do they still belong or we're on the future state of our organization. You know some people. There's two ways to look at this. You know, sometimes companies outgrow the current talent and in their leadership. Right it's not the same to be a small business, to be a mid size manufacturer, to be a multi bilding organization and requires different skills and different talent and sometimes people are set in their ways to some degree, and so people aren't will unwilling to learn new things. These things are very teachable. The the biggest obstacle. It's not so much how do we how do we move equipment around so that it makes sense? How do we solve the quality problems? It's typically the people, and so the ownership, the leadership, has got to have a high level of commitment to either convinced this people with their persistence, with their coaching, with their...

...teaching, with a collaboration, and at some point make the decision maybe you're in the wrong role or maybe you maybe we need to find a different company for you because the direction were leading it's not aligned with, you know, with your values and the value you can add to this business. That's my main, I guess, suggestion for your audience is that that high level of commitment. That's where the twenty four percent comes in. It's from the commitment from leadership, from for ownership, not so much on learning the tools or thinks of that nature. But Answer Dan. Is there anything I did not ask you about that you'd like to touch on? Yeah, Oh, one thing that I didn't answer. You said how long it takes to get results. So I think that's a very important question. You know. You know in this client it turned out that within three months they started seeing results and profitability started to to to to go up. But in some cases, and depends on the circumstances, and you know, there's so many variables, like if you're a capital capital intensive manufacturer, good, it's going to take time to really see the changes have the effect. So it could be six months, it could be close to a year sometimes to start seeing results. But it's more a function of the receptiveness and the speed of adoption of your people to the new behaviors than anything else. Again, everything is driven by their behaviors, by the culture, by by People's willingness to to to affect change. We strive on not doing the work for the kind necessarily, but more as a catalyst for change, teaching them these new values, these new behaviors and these new systems so they can take them and run with them, so that way, when we're finished with our engagement, it's just embedded as a system into your into your business, and that's how you become successful, by adopting it as a system. As supposed to saying, this is a project that has the beginning and has an end and once the consultants are gun, you know we're finished and there's nothing else we need to do. This is part of a continuous improvement effort that you're constantly looking for. Where are we failing and where do we get better and how do we get creative and make changes so that we're successful the next time around? Day and this was a great conversation. I appreciate you doing this today and would love for you to tell our audience where they can get in touch with you, where they can learn more about Alpha Nova consultant. Yeah, absolutely. So. You know, people wanted to learn more about what we do. They can go to our website, which is www dot consultingcom. Check out. We have a lot of free resources. We have a lot of blogs that answer and educate people on how do you get started and and what to expect, how do you implement it and in its little things related to behavior and some of the things I shared here. Of course, we have our contact information if you'd like to get in touch, and I did want to mention one resource that I think would be valuable for your audience that I've included and shared. It's we have a self assessment tool that basically takes five minutes and you know the anyone from your artist can go in and just answer ten questions on certain performance indicators and their levels and it will give them feedback as to how do they compare and maybe some suggestions us to. You know. How do you, Hu Shu? You approach this in terms of how do you breache the gaps from world class performance and where you out today? Great, well, Dan, once again, thanks for doing this today. All Right, absolutely my pleasure and thanks for having me you bet as for the rest of you, I hope to catch you on the next episode of the Manufacturing Executive. Before we go, I want to say a quick thank you to our sponsor, prolific. Prolific is an account planning solution that enables manufacturing sales teams to log key information and build account plans right inside of sales force, rather than resorting to sticky notes, spreadsheets, white boards and slide decks. Learn more at prolific dot AI. That's pro L IFIQ DOT AI. You've been listening to...

...the manufacturing executive podcast. To ensure that you never miss an episode, subscribe to the show in your favorite podcast player. If you'd like to learn more about industrial marketing and sales strategy, you'll find an ever expanding collection of articles, videos, guides and tools specifically for bedb manufacturers at Gorilla Seventy sixcom learn thank you so much for listening. Until next time.

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