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Saturday, February 23 , 2019, 10:20 pm | Fair 45º


Paul Burri: A Creative Management Style

An easy demonstration in lowering hardware costs pays off

I always admired the management style of my friend, Fred. He could always find a way to make his point in an effective, memorable way.

Paul Burri
Paul Burri

Fred was the general manager of a small company that manufactured a line of machines for the packaging industry. The company made all of the components and assembled them into the final product.

Naturally, as in any effective business, it was important to reduce costs wherever possible, and at Fred’s company he noticed that they were spending a lot of money on the relatively expensive nuts and bolts used to assemble their machines. The assemblers would occasionally drop a bolt, and instead of bothering to pick it up, they would simply reach for another one from the bin.

At the end of each day, the miscellaneous bolts, nuts and other hardware would be swept up and dumped into a large barrel filled with all sorts of this kind of hardware. Although the hardware was technically “saved,” it was really a waste because it would have been too expensive to hire someone to sort it all out. So the barrel gradually filled up day in and day out.

Bulletin board memos asking employees to help save the company money by picking up dropped hardware — a quarter-inch-by-2-inch-long bolt made of heat-treated steel could cost about 45 cents — was not being effective. Occasional “pep talks” with the assemblers were equally ineffective.

One day, Fred tried a different approach. While standing next to the company coffee pot with a cup of coffee, he placed a quarter and a 2-inch bolt on the floor near him. Only a few minutes later, an assembler walked by and picked up the quarter. Fred immediately called the man over and said, “Hey, you made a mistake. You picked up the quarter, but that bolt is worth 45 cents.”

After repeating this exercise a few times, the assemblers got the point and began picking up dropped nuts and bolts. Hardware costs decreased.

In a similar situation, I was once managing an electronic connector company where we assembled delicate gold-plated electronic components. Some of these components were about half the size of an ordinary toothpick, and as you can imagine, each assembler — we had about 60 of them — would drop a few of these parts during the course of a day.

One day, on a hunch, I told my janitorial employee that I wanted him to save these few dropped components when he swept up every day. Six months later, he had a large coffee can full of them. I called an industrial salvage company and sold that coffee can for about $80 worth of salvaged gold.

I used the money to buy pizza for the assemblers one day for lunch. No, I hadn’t exactly saved the company any money, but I used what would have been thrown away to improve the morale of my people.

I never told my assemblers where the money came from, though, for fear they might start dropping more than they usually did!

— Paul Burri is an entrepreneur, inventor, columnist, engineer and iconoclast. He is not in the advertising business, but he is a small-business counselor with the Santa Barbara chapter of Counselors to America’s Small Business-SCORE. The opinions and comments in this column are his alone and do not represent the opinions or policies of any outside organization. He can be reached at .(JavaScript must be enabled to view this email address).

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