The Benefit of Business Throughput Improvement
The Benefit of Business Throughput Improvement
How business throughput improvement is beneficial for businesses is what we discussed today.
In this week’s The Faces of Business Episode, our guest speaker was Scott Shumway. Scott is the President of BioSkin Premium Bracing. Aside from this, he is also the Co-Owner of Skillman Brothers Inc. Scott is a throughput improvement practitioner and helps people understand how looking at businesses differently will help throughput and performance.
The conversation of the episode started with Scott sharing his background. He said that when he was in college, he was studying graphic communications. This is when he got a chance to visit Wisconsin. There he met the president of a company called Suttle Straus who offered him to join his company.
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Hence, by this Scott became part of his company and moved to Wisconsin. Moving on, Scott also shared how this person gave him a book to read before getting to work with him. When he read that book only then was he allowed to work for him.
After this, Scott started talking about business throughput improvement. He said that when he read the complete book they developed an entire process in which he converted all the principles of the book into reality. He said that this is when his clients would come in and ask for proof.
Therefore, to give these clients those proofs he developed the entire system. In addition, due to this, they made their sales reach from $3 million to $24 million in over 11 years. Continuing the conversation, Scott talked more about business throughput improvement.
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He said that for business throughput improvement, they had to do throughput accounting. According to Scott, if you do cost accounting you cannot calculate the individual costs of things that make up a whole. This is how, when you give a complete rate at one point, it can be changed when you sell the spare parts individually.
Consequently, business throughput improvement is more feasible in situations like these. By the end of the conversation, Scott talked about the excess capacity. He said that in order for business throughput improvement to occur, you need to check for excess capacity in your company.
For this, Scott says that usually when a boss is about to walk in, the employees all act busy and you have no idea of knowing whose time is getting wasted. Therefore Scott always tells these people to use their phones or play games when they aren’t working so he knows where there is an excess capacity.
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The conversation then ended with Damon thanking Scott for his time.
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Damon Pistulka, Scott Schumway
Damon Pistulka 00:03
All right, everyone, welcome once again to the faces of business. I’m your host, Damon Pistulka. And I am so happy, because I’ve got Scott Shumway with me here today, Scott, awesome to have you.
Scott Schumway 00:16
Great to be here. Daymond so good,
Damon Pistulka 00:18
man, it’s gonna be fun. I mean, we gonna be fun. We’re a couple minutes late, because we just got going, it just couldn’t stop. So. But it’s awesome to have you here. Now, Scott. Today, we’re gonna be talking about the benefits of business throughput improvement. And for those that don’t understand, we’ll be talking about throughput, how we got exposed to throughput, how we’ve been working together. But let’s let’s start a little bit more with your background. Let’s start with your background and kind of understand what, where you started and what what you’re doing today.
Scott Schumway 00:52
Okay, great. That’s good question. I love Genesis stories, because they’re always like, so interesting about how somebody got into what they’re doing. Yeah. So, back in 92, I was going to school went to Brigham Young University. And if you remember 92, when people were getting out of college, they were not finding jobs. You remember that? Yeah. Yeah. That was a that was a bad time. Yeah. But this is the worst time to get a job now. Right? Yeah. Um, so, uh, so I was actually studying graphic communications, I wanted to go into the printing industry.
I for some reason, it just like, really spoke my language. And so a series of really amazing events that we don’t have time to get into. Got me out to Wisconsin, in fact, I met the president of a company in Wisconsin, he was the president of a company called subtle press. It’s in Waunakee, Wisconsin, just north of Madison. Okay. And it was subtle press the time it’s now subtle. Strauss merged with another company. He walked up to me, we met each other in Louisville, Kentucky, and he says, Hey, have you he was impressed with what I was doing?
He says he ever thought about living in Wisconsin. I said, I don’t even know where Wisconsin’s at. Yeah. I know it’s cold. And I know it’s like in the upper Midwest. And he says, no, no, really, I’m totally interested in bringing you on. So I left school and moved to Wisconsin, and I started my first job there. And it was in the is a pre press operator. The very first thing this guy, John Berthelsen is his name. And I’m forever indebted to him. He handed me a book. And the book is the goal. I think you have a copy of it on your desk. Yeah.
Damon Pistulka 02:42
We dug it out. Yeah, there you go. There it is. On the screen. If people haven’t seen it, I think this thing was printed. It was printed a while ago.
Scott Schumway 02:50
I think 80. Yeah, something like that. Yeah. So he hands me a copy of that book. And he says, If you’re going to work for me, you need to read this. Yeah. I have not been trained in the Theory of Constraints, which is what that book is all about. And I read that book. And it’s something in my head, clicked. Just as I read, I was like, Oh, my gosh, this is amazing. So the very first thing I did is I took the principles of that book, and I applied it to our pre press department. People would come in, and they would say, hey, we need a proof. And oftentimes, to get a proof back into their hands, it would take a week or two weeks, depending on the on the job.
And after having read that book, I said, oh, so what’s the bottleneck? What’s the constraint? What prevents the proof from getting when the customer drops it off? What prevents it from getting it back into their hands? And if we can shorten that time, we will be better than any other printer out there. And people because we offend every graphic artist out there. And every, every person that’s in marketing, they’re always procrastinating, and they bring it at the very last hour, right? Yeah, yeah, there goes half your audience.
Yeah. They come in. And I said, let’s turn these things around faster than anybody else. And then they’ll come to us because they need somebody to save them in the end. Yeah, I did. I went to work with with the group of people that I worked with, and we identified what the constraints were, we took the five focusing steps that are taught in the goal, identify the constraints, we exploited them, then we supported everyone and everything to the constraint. And we went from turning proofs around. On average, it took five to seven days, depending on the size of the project. 24 hours. Wow. Bam. We called it hot potato proofing.
And it it started a growth spurt in that company. That was remarkable because we were we were able to turn things around so fast that when people were in desperate need of getting something printed. They came right to us because they knew we could get it out. Yeah. And I just took that idea. From the pre press department and I said, How do we get things through the press room faster? And how do we get it to the binary faster? How do we get it back to the customer? And so within? I don’t know, I think that after a year and a half, I was then the production manager moved out of the pre press department as the production manager.
Then another year went by, and then I was the vice president of manufacturing. And then I was then I was the vice president, all entire company. Yeah. And and was there 11 years and we grew that business from 3 million to $24 million in 11 years, it was a ride to behold, yeah, yeah. And that’s how we did I just just use the principles in theory of constraints. So that’s, that’s what I live, breathe. And just as my whole fiber of every beam of every fiber of my being is just what I do.
Damon Pistulka 05:49
That’s cool. That’s cool. Because it’s, it’s for me that the theory of strength constraints started out somewhat similarly, but not in the same industry, I was exposed to him. When I was actually running a company that we made checkout counters for grocery stores, we had, we had a facility here in the Pacific Northwest, and we had one in Tennessee.
And it like you said, it changed the way you look at a a multi departmental manufacturing process. Yeah. And, and simplified things so much, because in there we were we were dealing with, well, we are, they’re made out of wood. But of course, they had electronic components. And they had plastic that you know, trim and laminate and all these other things that all came together. But it was really amazing. As we looked at it, and it didn’t take very long, you realize that the entire business and both facilities came down to four CNC machining centers.
Scott Schumway 06:52
Everything had to go through those did they everything,
Damon Pistulka 06:55
every piece that got some custom material had to go through those and, and then of course, in the days of emerald, we’ll talk about this later in the day, in those days, and that was in the early 2000s. Everybody was thinking about efficiency, right? So you would look at you would look at Oh, man, just these little lots of lean manufacturing, yeah, lots of lean manufacturing without looking at and they would look at all these little pieces, well, I can just fit them all over on this, these sheets, you know, because they were four by 10, or whatever the heck size sheets of, of laminate, laminated wood or whatever the heck they were cutting, and the CNC router would cut the shapes out, right?
Well, the engineers that were programming think, Oh, you can add all this stuff. And we get this efficiency, we use the material so much better, because we’ll put parts all over, well, I increase the, the, the time for each board on that machine. While those parts can be made on other simple pieces of equipment in other places in the in that facility.
And after we got into it, we realize that that was robbing us of about 40% of our capacity by doing all that. And what we did is we simply took them off, and did one clean cut to get us kind of a square piece coming off the end if they wanted to use it. And those little pieces were made someplace else on the hand tools by honestly, in the beginning manual labor until we got up to the volume where we needed another piece of equipment can do it.
But it was amazing what the throughput mindset did to do that and to the to the day I left that company, we could almost we could almost predict our sales. The next well, not quite the next week, because we did a lot of work and color whip down. But by how many hours the the machine ran in the last 72 hours. Yeah, how much how much output the company would have. And that’s all two facilities, 200 people working off of four CNC machines. And, you know, that’s the kind of thing that you can figure out when you really understand throughput and you’re constrained under business. It’s interesting
Scott Schumway 09:04
as you’re as you were describing the whole thing in my head, I see how sometimes we make wrong decisions in business and that is, oh, I want to be more efficient with this part. Right so a piece of wood and I want to get as many pieces out of that piece of wood so they’re gonna throw it on a piece of equipment and like and get as much they can’t but then backed up with like parts that they don’t need because they use every square inch but yet all that cutting reduce the throughput in other words, the number of sellable units.
Yeah. And so you can you can you can like cut off your nose to spite your face sometimes thinking about efficiencies of parts that like that you’re not even going to use and and yet you’re there saying oh, we’re behind. We can’t get the products out are these these jobs are going to be late. I you see that all the time when you make those wrong decisions.
That’s why the beautiful thing about money, the theory of constraints, but what you’re calling and you rightly called it through But there’s the throughput accounting, accounting versus cost accounting. And the big difference is your time, throughput dollars to sales, you have to tie those two things together, because throughput is a measurement of velocity, not the rate over a period of time. Whereas cost accounting is just like a moment in time where you just take a number. One thing that happens quite, quite often is people we’re going to get into the geeky part of the accounting people, they might this is where you lose the other half of your audience,
Damon Pistulka 10:30
or loss of first half, you lose the second half
Scott Schumway 10:33
now. Like, I’m not that guy back on. That when did with the cost accounting, somebody will run in, they’ll say, I need to know the cost of these items. And so you like calculated in that moment of time, well, the materials cost this much, and the labor is this month, much at this moment in time.
But two weeks from now, you know, you could have had a, you know, there could have been a sale on the raw materials, which could have lower the cost, which would change the average cost over a period of time. But the other more important one is, maybe your efficiencies went through the roof, maybe I’m able to get more units out and give you out 100 units in an hour versus 200 units in an hour completely changes that the only way you can measure that is throughput accounting, you can’t measure that in cost accounting.
Damon Pistulka 11:21
Yeah, yeah. Yeah. Well, there again, if we geek it out a little bit, the cost accounts never liked me. Know, because I would always say, I’d say that, that that, you know, one of the first things I did in that in that company, and everyone senses, everybody wanted job costing, right. Everybody wants to talk about every little piece, every little minute of time that people put in on something. And I was like, stop. Yeah, I don’t care if you got the fastest thing to do. It’s like, I don’t want to collect data if it’s useless data. Yeah. And, again, oh, no, oh, no. What are we going to do?
How are you going to know how much the job cost is that if I really want to know, we’ll figure it out at a point in time, like you said, totally, you figure it out in point of time. But as someone that has to run a business, or run a manufacturing facility, or department, if you understand the throughput, and you understand how much I spent to get that throughput? That’s really all you need to know.
Did I did I do it right or not, if I’m, if I’m thinking that I’m gonna, if I got $10,000 worth of work through that, and, and I spent 5000, to do it, I made $5,000 in gross profit on that, or wherever you want to call it. That’s really, if you can get that, that in the hands of the people that can make a difference, you’re gonna make a huge difference in your totally,
Scott Schumway 12:41
totally, and you get them to think systemically like about the whole business, because that’s the important part is, yeah, you’re you’re operating an entire business, you’re not operating a section of a business. Yeah. And, and if you can think systemically, he’ll make a massive change to your throughput. Yeah, yeah. Because what’s like, you know, it’s laying around and every plant that I see, every place I walk into, there is excess capacity. Everywhere, and people don’t know what happens when boss goes walking through.
Everybody looks busy. But are they really busy? No, they just look busy, right? So everybody hides their excess capacity. One of the things I love to do is, you know, when when I go into an organization, I tell people like, hey, if, if you don’t have something to do, I just want you to sit and play on your phone. text your friends, look at Instagram, get on Facebook, I need to know where the excess capacity is, in your if you look busy, and you’re not, I can’t, like you’re just hiding it, you’re burying a resource that like, like, if you’re not dead thing. Everybody gets to have their phone with them.
And that is that goes so against contrary to modern manufacturing. Well, there’s Yeah, management just Yes against it. But that’s how I find excess capacity.
Damon Pistulka 14:02
is that’s the easy way because it’s visual, you can see if there’s excess capacity. It is. And you’re right, though, when you when you start to think of things businesses and through in terms of throughput. The one thing that it is, it’s a universal concept. And the one thing I think, and I believe you’ve you’ve done this before, too, is you can take throughput and go into many other businesses other than manufacturing.
Yeah. It’s you know, cuz you look now and you look at throughput is is used in medical settings. It’s used in service businesses, it’s used all over because, again, the faster you can deliver your product or service and get paid for it and deliver a good product or service, the better off your your businesses and your customers are. Yeah,
Scott Schumway 14:53
so to confirm that fact. I mean, that’s exactly right. And to testify. That’s true. I left the printing industry after a 11 years I realized, Oh, it is really cold in Wisconsin. Yeah. And I moved back here to Oregon. My brother in law, Mark Skillman and I, we opened up Skillman brothers, which is a real estate development company. And he said, he says, Well, what do you know about real estate development? And I said, I don’t know anything about it. But I tell you, I can make it go faster than anybody else’s real estate development company. And he said, really?
I said, Yeah, well, you watch you do the real estate, I’ll do the development. And we built in. And so in five years, so from 2003 to 2008, we built 105 units. Ah, yeah. And, and I just used the theory of constraint. And it was just him and me. And of course, I was a paper contractor. I didn’t, I didn’t, yeah, I didn’t throw a hammer at all.
But as a paper contractor, I knew you know, what the constraint was, for each project, I would just plan it all out, identify what the constraint was subordinate everybody to the constraint, exploited as much as possible if I had to throw some money at it to elevate you to go faster. And then that was just a constant process. And we we had going on with 105 units. In five years. It was it was a nutty time, and then 2008 happened. Yeah. And that was the end of that.
Damon Pistulka 16:13
It’s not their real estate wasn’t so good after 2008 for a while, no, no. And now Now, that’s a whole different story about what that’s like. Now again. So when, when you when you think about throughput, and you think about the benefits to business, businesses that they really embrace and work on throughput improvement? What are some of the things I mean, we’ve talked about, you know, you can get more out the door and things like that, but what are some of the other things that you think that businesses will see if they start understanding throughput and working on throughput?
Scott Schumway 16:50
Well, I mean, the, the one, and only thing that they really will benefit from is increased money, I mean, there’s just the amount of money that comes in the system, the whole idea of throughput accounting, is that you’re watching all the money coming in through sales rise faster than the operating expenses. So you want those two things to diverge. And when you when you talk throughput, and you focus on the constraint of an organization, and you harness the excess capacity, that’s natural in every organization, you know, your operating expenses stay exactly the same, right?
If you can take advantage of all those of the excess capacity, but you can increase the amount of units that you’re putting through the system. I mean, that just creates that, that higher profitability, so your net profit goes up. I don’t think that you need to go anywhere. Beyond that by saying, you want more net profit. Let’s use throughput accounting, let’s use the theory of constraints to do that. The other cool thing about it is is that it creates focus in lean manufacturing, and the principles of Lean are amazing and great.
The difficulty with lean manufacturing is is that when you walk into a plant, they say, Yeah, we’re a lean manufacturing plant, they’re applying lean everywhere. Yeah, that’s like, it’s like happening over there. And over there, I mean, there’s just, it’s just like everywhere on the planet, and there’s, you know, you want to be as efficient as possible. But if you try and increase the throughput of a non bottleneck resource is not going to change your system at all. It’s like a chill, I always explained it like a chain, if you take a chain, it’s made up of a bunch of links, right?
And if you want to strengthen the chain, you go and you strengthen the weakest link, because strengthening that one weak link will strengthen the entire chain, which is your company. If you go and you say, Well, I want to strength, I wanna, like I’m going to spend money and strengthen all of the links in the chain. Doesn’t do a blessed thing, except for the one weak link. I mean, when you change that one, you change the whole thing. But don’t try and don’t try and make something efficient. That’s not not the bottleneck resource. Yeah, your company. Yeah. You’re just going to waste money doing that. Yep.
Damon Pistulka 19:13
That’s a good point. And I think, too, there’s been there have been people that have that have successfully used lean and throughput thinking together. And so you do
Scott Schumway 19:22
you do you put them both together, you take the Lean principles, which are amazing. Get the waste out of the constrained resource. Yeah, when you can when you can focus that so you know, theory of constraints in one word, is good focus. Yes, focus. That’s all it is. Yeah, just focus. Yeah, yeah.
Damon Pistulka 19:43
Yeah. And that helps you view it because you’re right. And that, Boy, I tell you what, once I learned about the theory of constraints to you get you really get in tune as a business owner manager, somebody that has to make buying decisions on on equipment or something like that. It’s like, hey, that new whiz bang piece of equipment is freakin awesome. I can run those pieces four times as fast and no operator in front of them blah, blah, blah, blah, blah. But if that doesn’t mean that you’re you’re pushing more dollars out the door, yeah, good dollars out the door. Why are you doing it?
Scott Schumway 20:26
Yeah, exactly. If it’s not the constrained resource that determines the throughput of the entire system, do not spend a dime on that. And you see that all the time. They’re like, yeah, that thing was, that is an awesome piece of equipment. Yeah, they automate it. And then then the operator stands around, but then they don’t take the operator, and they don’t take advantage of the excess capacity he now has and move him or her over to the, the bottleneck resource. Yeah, there’s tons of stuff like I love walking into a plant.
And looking around, because you can like, you can identify some of those things really quick. Yeah. But sometimes they’re not so obvious, where you really need somebody who knows what they’re doing, because sometimes it’s invisible.
Sometimes I’ll walk into a plant and there there aren’t, you know, big piles of stuff, which is, yeah, it’s really a spot where the where the constrained resources, or it will be there, and nobody can explain why they’re why the bottleneck is where it’s at. And then all of a sudden, you realize, oh, it’s a policy constraint. I’ll give you a really good example. Yeah, that’d be good. Yeah, really good example that. So faction plant you walk in and there is you identify, oh, there is a bottleneck resource. And it’s right over there.
And people know that it’s the bottleneck. Everybody’s like, that’s the person that they’re swearing at, like, yeah, the majority of the following Damon’s is slow guy. Yeah, that guy over there. Everybody’s got their finger pointed at that person or that machine that that that resource. Everybody knows. But then what happens is, when it’s lunchtime, the bell goes off, and everybody gets up and goes to lunch? Like, wait, I thought you said that was the constrained resource over there it is. Yeah. So why is it sitting idle? Because it’s lunchtime? Yeah. What kind of policy is that? Like? It’s the constrained resource?
Can’t we cross train somebody and like, have it run through lunch? Well, then people won’t, they can’t go to lunch together? No, no, like, like, that’s the constrained resource, we subordinate everything to the constraint. So let’s cross train some people. And the same thing happens for break time, or even a bathroom policy, right, where the person gets up, and they go and leave the constrained resource idle. But the policy should be changed to say, look, that resource never sits idle, let’s let’s go. So it’s looking at little things like that. The other one is sometimes the owner or the operator, the, the person who’s in charge of the company, sometimes is the constraint. And you have to like,
Damon Pistulka 22:56
what’s an example of that?
Scott Schumway 22:58
You give them the you give them like a tap them on the shoulder and says, You need to get out of the way. An example of that is, maybe they’re going after the wrong type of work, or they’re trying to change the business in a way that it constrains the whole company.
They implement policies, or they ask the people to do things that that prohibit throughput from happening, there’s, there’s a, there’s all kinds of things that can happen, where the owner can really stand in the way both either by relationships, or maybe people don’t like them, or there’s high turnover, or customers don’t want to deal with them.
There’s not there’s, there’s a lot of things gotta remember, throughput is like, it’s a systemic thinking, right? It’s about the whole company. And so yeah, if, if there’s not enough sales coming in the door, and you have in your manufacturing plant has a lot of excess capacity or your services. It doesn’t, it doesn’t even have to be manufacturing. If you’re a service oriented, or a company that generates revenue through service, and people just don’t like you or having to deal with you, then then you’re the bottleneck.
Damon Pistulka 24:03
Yeah, yeah, that’s true. But and he brings up a good point, because your bottleneck is not necessarily the area of operations in a business, you know, in a plumbing business, and not necessarily the plumbers in the field. That could be the, you know, our marketing or our salespeople generating enough good customers, for our people to do this. That’s exactly right. And yours, the current strain, that we don’t have enough cash to buy the equipment so we can get more plumbers in the field. And you know, there’s all kinds of things that, like, I’ve
Scott Schumway 24:34
seen companies where cash is the constraint where they grow, but then the inability and so then we say, okay, let’s walk down to the bank and talk with them. Let’s get some cash because that seems to be the constraint right here. Yeah, yeah. It’s all over the place. It’s inside the company. It’s outside the company could be a market constraint could be sales.
You really have to open your eyes to more than just the pile that that seems very obvious. obvious, oftentimes in a manufacturing plant, but in service is very different. I tell him, so my wife just had pancreatitis, which I wouldn’t wish on my worst enemy. It was, it was a bad thing. I was she was in the hospital for 10 days. And I saw, so I like I have, I’m going back to the hospital. And I’m gonna say, can I teach you the Theory of Constraints, because there are some messed up things in a hospital.
Yeah, that that not only patient care, the ability to get patients through the system faster. Having a better experience, there were a lot of constraints in this health care system that I just had an experience with. And it wasn’t just the hospital that I was in. But afterwards, when we got turned over to other specialists that specialize in pancreatitis, or specialize in an MRI or CAT scans, or, or even blood work, as a theory of constraints, guy that can see bottlenecks, see things that are invisible, I was like, there are some major problems with this healthcare industry. And I just want to go and get my hands on them and help them out. I mean, really just help. Yeah, yeah.
Damon Pistulka 26:15
Well, and they’re just like, I think that as we as we get smarter about it, you know, so many different industries, there are opportunities for us to use some of the things that we and some of the things that we use in vastly different businesses to improve businesses that are on the opposite end of the spectrum, you know, you talk about manufacturing and healthcare. Well, most people don’t understand that.
There are progressive healthcare systems that are using lean manufacturing and three streets to really understand how they can improve patient throughput, patient care, speed to care, because because once you understand that, if I can get Damon in the door, in an ER, if I can get in the door, in five minutes into the bed, or wherever I’m going to go, and I’m seeing the doctor in six minutes, and he’s out the door in 35 minutes, or it takes it three hours. And that room is tied up for three hours or my lobbies full of people for three hours.
Oh, I’m not doing I’m not making as much money as I could. And that’s right. And and you know, you look at that, and you keep the level of care as high as it needs to be because the level of care is not. If it takes three hours, the level of care is not any difference if they can get it in 35 minutes, because you’re not going to see the doctor any longer. It’s just how much you’re waiting around or how much you queuing up in these different places that are the bottlenecks. Yeah, way through that,
Scott Schumway 27:44
and there are a lot of companies doing this some insurance companies that are doing really good at even like the bottleneck could be moved even before the whole system. And they do preventative care, maintenance. We go in and have regular checkups. And they’re and they’re encouraging their clientele to go in and eat healthier and stop smoking and go get certain testing done as preventative care.
That’s and that’s beautiful thinking, they’ll think, well, I want the people to come in, because that’s how I make revenue. No, you want better throughput in order to if you’ve got healthy people going through your system, then you care for them all faster. So yeah, there’s Yeah, we keep going on
Damon Pistulka 28:25
that good stuff on that. So you’ve been working on the theory of constraints, and then all of a sudden, you decided to write a book?
Scott Schumway 28:34
Yes. Yeah. So book is called the invisible four letter word. prototype of it’s not published yet. Yeah. So it’s, I’m in I’m in chapter eight of nine at my, with my editor. So yeah, let me tell you the story behind that one. Yeah.
Damon Pistulka 28:50
Cuz I always wonder why. Because people asked me before to write a book. And I’m like, Man, I just saw no, but what got you? I mean, how when did you start first of all,
Scott Schumway 29:01
okay, so it’s been 11 years. I said, Okay, let 11 years ago.
Damon Pistulka 29:06
Okay. I just needed to know.
Scott Schumway 29:09
Yes, it takes a long time to write it. But it’s 11 years because there’s a massive amount of research that’s gone. And testing. That’s, this isn’t just sit down and be writing like principle A, B, and C, let me let me tell you that like the, I’ll give you the Genesis story of this one to me, great. Well, here’s what happens. You know this since since you’ve been classically trained in the theory of constraints, and all of us that have been classically trained in the Theory of Constraints know that every time you go in and you say, identify the constraint.
And then Then step number two is like, let’s exploit it. Let’s do as much as we can to get what we can out of the constraint resource. And then step three is everyone in the company subordinates to the constraint and that’s where you run into the problem. That’s where you like, that’s where the roadblocks go up. And everybody says, That’s not my job. I’m I’m not doing that I have what I’m doing. And so there’s a lot of people, if you go to some of the Theory of Constraints symposium, the the bemoaning that happens, like people say, if this is so good, why hasn’t the world accepted it?
Why hasn’t everyone just like if it really works as good as it’s, as Goldratt said that it works. How come the whole world’s not doing it? Yeah. I mean, there’s a fair question. And, and I asked that question 11 years ago, and then I discovered the reason why people don’t implement the Theory of Constraints is the invisible four letter word. Yeah. That’s why it’s, you say, Look, you need to subordinate to that constraint, because that determines the throughput of the entire system. And then the person says, Yeah, but I don’t want to. I got my job over here. Yeah, sorry.
Damon Pistulka 30:58
Yeah, it that’s so So you decided to? So you actually were in this book? You’re obviously you’re talking about the invisible four letter word, but you’re trying things in business, and then understanding the results and documenting them and then applying it in the book? Yeah.
Scott Schumway 31:19
So it’s not 11 years of writing. It’s 11 years of experimenting? Yeah. And, and here’s how it happened. So you know, in business, I was like, why are people not like, I would come up with a big believer in standards. Yeah. And I would say, Okay, we got to implement the standard. And then people would have a hard time, you know, as you know, like, living up to the standard, like, like performing per the standards, and you would just try and get them to, like, No, this is how it should be done.
And there’s always having to come back and to readjust into into fix those standards, which is good. That’s the improvement process. A couple years into it. What happened was, I met a guy, a friend that came into my life, and he was an alcoholic. And he just descended into this crazy drinking binge. And it was, it was awful was awful for him. And because he was so close to me, it was it was a terrible time in my life, because I was connected with him. And one day, he, he stole my truck to go buy some alcohol.
He didn’t tell me he went got a and then my truck was missing. I came home at night, and like, where, where’s my truck? And then I realized, this guy has it. And I literally drove three or four hours that night around town trying to find I went to every place that I thought where he might be. Yeah, found him in a parking lot. Completely passed out having drunk three full bottles of vodka, cheap. Vodka, just disgusting. Yeah, yeah. Stout. So I, the very next morning, after we sobered him up, I sat him down, and it took us hours. And I said, why?
What is going on, you know, that you shouldn’t be doing this. And we’ve had, we’ve had massive discussions why. And then he said, he just said, I can never get what I want in life. And then my little light bulb went off in my head. I’m like, oh, that’s the problem. We, we want what we want, and we don’t want anybody else to tell us what we want. And if they do, tell us what we should want, when we don’t want it, we get emotional. Like a little kid, like you get the order that you go to the store. And a little kid says, oh, I want that candy bar. You say no, you can’t have that candy bar. Then what’s the kid do? He gets emotional? Yeah. And then once he gets emotional memory becomes irrational.
And what I discovered, I sat down with some psychology friends, is that this this thing in your brain called the amygdala, and it gets hijacked. So what happens is, it’s it’s the part of your brain that is the logical thinking process. And you’re logically thinking until emotion, overcomes it and then stops working. It doesn’t work anymore. It just is you’re just emotionally hijacked. And you don’t think anymore. You just react. So if you don’t get what you want, then you become emotional. Once you become emotional, you become irrational. And then you justify certain actions, which is the fourth step down, and you just say, I’m gonna, so the little kid will just take him.
Once the candy bar mom says, No, he becomes irrational. Then he starts to throw a tantrum. And then he says to his mom, I hate you. So what’s the last thing happens? She’s like, there’s no candy bar for you. And now you’re in timeout, where you go home, and you’re gonna spend the rest day in your room. So the very last step is, you become powerless. Now, all of us in our lives, go through this process we become in the book I described like Imagine an Egyptian pyramid built upside down. How long would that last? Not very long, it would not last very little bird just come sit on the pyramid, right?
Like, right over ghosts. And our lives are like that we become upside. We’re like upside down pyramids, it’s unsustainable. And it all is because of the invisible four letter word, we don’t get what we want, we become emotional, we become irrational, we justify certain things, then we take action on those and then we’re powerless, we find ourselves in a powerless position. So in the book, I really outline you know, what it’s like to be upside down. Yeah, what it’s like to get yourself right sided, like a strong stable Egyptian pyramid.
And, you know, Goldratt says, This is where the Theory of Constraints comes in gold set. Goldratt always said, You know what to change, you need to change your life from being upside down to being right sided, that’s what we change to. And then the hard part is really how to cause that change to happen. And so I explore and reveal what I call the core of how to go from being an upside down person to becoming right sided through the principles of the core, then, yeah, I’ll let you read the book. It’s really fascinating that you can actually make sure that you stay right sided your life stay strong and powerful, because the bottom of a right side that person’s life is power.
It’s it’s a stabilizing powerful people honor and respect you when you’re right sided. And we naturally use those terms. Like if somebody is like flying off the handle, like that dude is upside down. That’s just a natural statement, we say, right. And then when somebody is really strong, and and powerful, we say that guy is so right sided. It’s just a natural thing that we save our lives. So I’ve incorporated those in the book.
Damon Pistulka 36:51
Well, I think you make a good point. Because you think about people and you think some people that are go off, like you said, at a moment’s notice they’re there, there’s something far beyond that moment that’s causing them to do that. And like you said, with the instance, you talked about somebody drinking, it’s, it’s there are other things that are causes doing and if you can find that, and just like just about anything, if you can find a root cause and address it properly, it you can drastically affect the outcome.
Scott Schumway 37:23
Yep, drastically. The cool thing about this book is, I’ve been teaching actually the principles for quite a number of years, even though the book hasn’t been published yet. But I, but I’ve got presentations, and I go into companies and I and I teach the principles. The, the thing that brings me the greatest amount of joy and satisfaction is even in my own company and others, they’ll say, oh, yeah, like, I came to work today, and I was upside down, people will just like self identify, like, I guess, I was not in a good place, I was upside down.
But I’m gonna take a deep breath, then they use the principles of the core, like, I’m just gonna say, Okay, I’m gonna remember what I really, really want. And I’m going to get myself right sided. And then what happens is they cancel out the negative effects of the amygdala hijack, yeah, get themselves right sided, and then they can begin to clearly reason and think, actually discover how to overcome conflicts. That’s another thing that’s in the book is on conflict resolution. Yeah. Once your right sided then I can resolve any conflict. Any yeah, I’ve done it hundreds of times. Yeah, because if you use the principles, they work and they work really, really well.
Damon Pistulka 38:32
Yeah. Yeah, that’s, it is. I tell you, you really got me intrigued now. So when’s the book going to be out? First of all?
Scott Schumway 38:42
So my editor is there’s nine chapters. We’re on chapter eight of nine. I was shooting for the end of the year, but we still not going to get it by Christmas. Not gonna Yeah, so it’s gonna be it’ll probably be, I’m gonna say second quarter of next year.
Damon Pistulka 38:58
Okay. Okay. Published? Well, we’ll have to, I’m gonna have to get it and read it. Because, you know, yes, what you’re talking about, has a lot of applications in manufacturing and theory of constraints. And like you’re saying the, the emotional and how your brain gets hijacked, but but it really sounds to me like this book is more about life and living a life that’s more, more like you want it to be? In
Scott Schumway 39:31
other words, yeah, people will often say, Well, is this for the individual? Or is it for the business? And my response is always a business is made up of a bunch of individuals. Yeah, those individuals don’t have their lives and if they’re not living in a right sided manner, then your whole organization is going to be upside down. You know, you’ve seen organizations or there’s just full of drama and people that are that are upside down and their dysfunctional businesses. They’re dysfunctional because the people within them are like that. And the goal of this book is to, like get handed to every person in your organization.
And then you can all speak the same language, like, the person comes in and says, I’m upside down today, and I need to just like, get myself right sided, then everybody else was gonna say, Great, we completely understand the framework. And we’ll help you get right sided. And they all work together. And I see that over and over again, it happens in, you know, I work at bioskin.
Now, I’m the president of Viaskin. People walk into my office all the time, they’re like, okay, okay, to help me get right sided? No, okay, let’s walk through it. And then they do five minutes later, they walk out, they’re like, Okay, I can solve some problems now. And they do. Yeah, we’re gonna we’re gonna do things the right way. And it was like works. It works every time. Yeah.
Damon Pistulka 40:48
Well, and, you know, I’m sitting here and thinking about this book, and I’m thinking about what you’re teaching people. And I’m thinking about the, it’s really interesting, because you’re connecting good personal development, with improving business. That’s exactly what it is. And they work into it.
Which, you know, I used to always, and I didn’t even realize the connection until now, I used to always tell people, when we worked on safety, I said, Listen, workplace safety. I don’t want to get hurt at work, but I really don’t care about you being hurt at work. And they look at me funny. They say, why is it because I want you to be able to play with your kids, when you get home, I want you to be able to cook dinner with your wife, whatever you want to do, I want you to go fishing, I want you to go ride your bike, whatever you want to do.
Scott Schumway 41:37
If I want you to come back tomorrow,
Damon Pistulka 41:40
yeah, whatever it is, whatever you want to do, I said, I really, I really don’t care about the effects. That happens if you get hurt at work, I care more about how it’s going to affect you outside of work. And that’s why we need to be super safe here and work. And what you’re talking about is something that I think even goes to a deeper level than then when I was talking about is that when you can make a person more whole or more stable, just a different one that hold that whole isn’t the right word, but stable, so that they have a way to deal with more things in a different way more positive, that when they come to work, they’re going to be more stable when they walk in the door.
They are more stable last night when they were talking to their, their kids, their wife, their friends about whatever’s going on. They deal with those problems much differently, because now they have a framework to deal because you go back back up a little bit.
And you go to, we aren’t taught these things. Right. We are taught physics. Now. We talked about personal development, you talk about really understanding how to not creatively constructively solve problems in life. Yeah, we’re not really taught this stuff. So by you being able to teach people in your business, how to constructively get themselves in the right state of mind, solve problems, deal with them, whatever they need to do, but have that right focus and right state of mind. It has to it has to drive pretty incredible change in business,
Scott Schumway 43:14
it drives results. Like it’s unbelievable. I love to say a corporation is actually a cooperation.
Damon Pistulka 43:22
Yeah. Corporation is cooperation. A corporation
Scott Schumway 43:27
is actually a cooperation. It’s a bunch of people working together. And you can have as many standards and policies and procedures, but if the people come to work and they’re like mentally like yeah, not right side, I’ll just Yeah, principles from the book if they’re not right sided. If they’re upside down you there’s nothing you can say or do to get them you could just like this is the way the policy is they turn around and walk away. And then and then they’re using real life four letter words and copy things behind your back and sabotaging your equipment or the throughput or the percentages to them. Yeah, it
Damon Pistulka 44:06
just it just so much stuff that happens when you can’t do that. Because if you if you teach people how to solve life problems in general I don’t care if you’re an engineer, you’re a manager of a department or you’re someone that’s that’s you know, nail and two pieces of wood together on a construction site. You can do it better if you’ve you’ve been able to solve that problem and it’s not sitting there eating at you lingering and making you feel like you know just feel horrible or upset or whatever it is. You’re going to be better at what you’re doing then. And you’re going to be happier and healthier.
Yeah, yeah it’s good stuff. Yeah, that’s good. Thanks because it gets a get it gets you it gets you going because as you as you know, we how many how many gazillion people talk about culture and leadership. Right? Yeah. Oh said this culture. So it is a leadership and we all know it leaders as well. But when you really break down something that could help a business more fundamentally than either one of those two, how are you going to create a good culture? While people come to work with the right mindset? Are they there? They they understand our community? Well, the culture gets a little easier automatically.
Scott Schumway 45:18
Yeah. So just give like everybody is listening. So the invisible four letter word, right. Kind of you can see right there. Yeah, you bet. Have you figured out what it is? No. Oh, yeah. Because we’ve said it. Like, we probably said it. If we go back and re listen to the podcast, I’ll bet you we’ve said it. 30 times.
Damon Pistulka 45:36
It gets to me, it’s the concept is the concept of giving people the framework, and the way to help themselves. And it’s one of those things that we you know, it drives culture, it’ll drive. Yeah, it’s gonna allow you to facilitate better culture.
Scott Schumway 45:53
Yeah, the whole point is everybody has to come to work. You wanting to be united, you know, we have a goal in this corporation. And everybody needs to come and say, yep, I want to be united with that goal. That’s what I want. I just said it. Now you have an invisible four letter word. Yeah.
Damon Pistulka 46:08
Yeah. Cuz it’s, it’s, it’s like that. I just whatever the word really, you know, and I, you just said the word I understand that. But the concept that you’re you’re talking about, I think is is very powerful. And I don’t think I know it is. No, it’s,
Scott Schumway 46:26
it’s super powerful. Because once people get a line, there’s nothing that a corporation can’t do. Yeah.
Damon Pistulka 46:35
Yeah. And it’s fun. I tell you, when you’re in a business like that, and we were, we’re getting close to time here, but I knew this would be one of those where we could talk a long time, well, you can talk. But you know, you can do crazy things, like you talked about with the printing press. In the in the free printing, and just using theories, constraints and working with when everybody’s working on something, you can do tremendous things.
I mean, I’ve been fortunate enough. And I know other people, I’ve talked about it, you really can’t explain it, but you can go into business and, and take something, we in the check stand company, after we are doing other things with constraints and things we just said, Listen, how can we? How can we deliver what our customers really want?
Yeah. And and they said they want to get their products when they want them? I said, Well, how fast do they really want them? And, and we was like, well, our lead time and said I don’t care a lead time is said how fast they really want. And because I would see, you know, to 200,000 square foot buildings, and we’d walk out into the warehouses of them. And we’d have, you know, a store of checkout counters that was sitting there, done. And like, why are these there?
Oh, they move the construction date. They move the construction days now, you know, construction dates moved a little bit. And and these things happen? Well, we decided to go well, how often do they move the construction dates? Well, we have to they have to give us eight weeks tell us with eight weeks lead time how it is but they that you know the construction dates will move around. So we just will finish the product and hold on to it. I said, Well, that’s money. Those are dollars. So how long does it take before? You know, pretty much they know that they they’re going to be able to use them.
So they could before they don’t change this construction date the construction is it’s past the problem stage and they’re going to open that store or they’re going to remodel that store whatever they’re doing. They said, well, it’s about a month. And I I don’t even know how I used to travel and drive a lot. I was driving down the road. And I think I think it was I was in the south someplace. And I was like, what if we could deliver them in two weeks? And when you take these kind of things, and you get people working together, we did it. We went from eight, we went from eight to two and totally do it. We we did that. And we reduced the cost by 40%.
Scott Schumway 49:05
Yeah. Now the question. Let me ask you a question. How many other people were involved in this? Everybody? Everybody and definitely anyway? Did they all want the same thing? Do they all want? Did they all jump on board? That’s the power. Yep. So everybody in your story, you use the invisible four letter word, I counted it four times.
Damon Pistulka 49:29
But this stuff is so powerful when you can do like you said, you get people working from the same framework and then you go, Okay, how do we do it? And not not like all the reasons why you can’t do this. How do we do it? You just bring up another thing. You go, oh, that’s just something we have to solve. What’s the next thing we have to solve? We just figured that one out because we got all these people the you know, the counting over here that nobody listened to before now there, they just gave us this idea, you know,
Scott Schumway 49:53
natively they’re given you the answers. It is marvelous, and that is really the principal once you’re right excited, and everybody has got the same wants, then positive emotions, right? Remember the negative emotions like completely left out the amygdala and the thinking process.
But when you have a positive emotion running through you, in the book, it shows like how the chemical reaction of dopamine and serotonin, and the positive chemicals that run around in your body actually cause your your thinking process the amygdala to like, go the opposite direction, your creativity goes through the roof, your ability to see things that you never saw before goes goes just as heightened. And then you come out the other side, like, Yeah, let’s do that. And everybody else does to the given high fives to each other. And then they take action, and then it just makes for a powerful team.
I tell you, the organization that I’m watching right now, SpaceX is a right sided organization, those people are, they are just there, I can tell that if you walk into that organization, they are everybody there is cooperating, and they are working together. And then the throughput of that organization is on believable because I didn’t individual’s
Damon Pistulka 51:02
Yeah, yeah. Yeah. That’s so cool. So cool. Well, Scott, it’s been awesome talking to you. And I like listeners, like the listeners got got some love. And I know I sure did, and thinking about throughput and, and just really the benefits of throughput. And I’m really excited to to, for the release of your, the invisible four letter word book that’s coming out in first quarter next year. It’ll be awesome to see. Take a read on that one. That’s out. But thanks so much for being here today, man.
Scott Schumway 51:32
You’re welcome, Dan, and thanks for having me on. Appreciate it. You
Damon Pistulka 51:34
bet. Well, everyone, thanks. Thanks for listening. You know, we’re here every Tuesday and Thursday. We’re taking off a couple of weeks here for the holidays. Just want to wish everyone a happy holidays. And we will. If you haven’t heard us already, we are on most of the the popular podcast channels. So you can check us out there. You can check us out here on LinkedIn or Facebook or Twitter where we’re hitting when we go live. And just glad to have you here. And we’ll be back again next year. Thanks a lot, everyone.
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