INCENTIVE-BASED MANAGEMENT -- Show 'em the Money
The general manager will drive volume and throughput well beyond breakeven levels, and will support their managers to achieve results. If all managers make their goals, the GM will make his/her goals because the equity value will increase.
Emphasize interdepartmental coordination. Sales can support production by seeking jobs that fit the plant with flexible delivery schedules, if needed. Production can support sales by over-recovering rates and delivering quality products on time and under budget. Pricing/estimating can support the whole process by improving the win ratio of jobs bid, and by leveling the load to stabilize throughput, thus driving volume. If workflow through the plant is level, then overhead as a percentage of sales is reduced, producing greater profits or more competitive rates.
Put salespeople on a tiered commission structure to reward them for new customers and value-added sales. Reward a higher commission percentage for jobs from customers added in their first year with the company, and on a declining scale thereafter. Put customer service on an incentive override above salary to drive revenue growth and retention from existing customers.
The best measure of plant throughput is hours worked vs. hours billed, those on all the time cards compared to invoiced to customers. The closer this ratio is to a 1:1 relationship—the better the productivity, the throughput and the profitability. When they go over on one job, they will be incentivized to go under on another to balance the overall ratio for the period.
The whole concept of 1:1 accountability will bring out issues regarding accuracy of estimating standards, justifying department costs, scheduling inequities, flexibility and the need for volume. It will rebalance the rates and force flex scheduling to meet throughput demands.
Murphy created his laws for a reason; things do go wrong. When there is flexibility in delivery time, and you avoid 'just-in-time' pre-paration, you drive profitability. The ability to slot another job into production while problems are resolved will maximize yield and eliminate standing around a idle printing press.