Internal Memo

The following is an internal memo, written by Hearthside Chairman & CEO, Rich Scalise
to all employees on the topic of ” Why Continuous Improvement: A Closer Look”.
It is reproduced here with permission. August 4, 2016.

Why Continuous Improvement:
A Closer Look

A letter from Rich Scalise, Hearthside Chairman, to our employees regarding Continuous Improvement and everyone’s role in it every day.

Anyone familiar with Hearthside knows we are committed to continuous improvement (CI). Continuous Improvement benchmarks are built into every product, project and process, then measured at every opportunity. We strive for continuous improvement in all our contract manufacturing locations and in all areas of our business. Why? What are the purpose and the value of continuous improvement in a contract manufacturing environment?

SOME HISTORY

Had we been born 200 years ago, our world would see very little change through our working lives. Work learned at age 15 would still be done the same way at 40 – if we actually lived that long. The average life expectancy was only 37. Today the world is changing faster than at any time in world history. We all benefit greatly from this rapid progress, but it also creates incredible challenges. For individuals, it means continually learning new skills. For businesses, it means continuously improving and finding new ways to add value. Businesses that fall behind will cease to exist – and it happens every day.

A RAGING RIVER

If the distant past was a tranquil stream, today’s fast paced world is a raging river. Everyone and everything around us is in a state of constant change. It’s impossible for people or businesses to stand still. We either move forward or get swept away. Continuous improvement helps us to navigate, moving forward in treacherous waters.

Our customers and our competitors are in that same raging river. They are working hard to move forward too. Everyone has the same challenge. It’s not good or bad, it’s just a fact of life in the 21st century.

THE COST OF DOING BUSINESS

Where does our Continuous improvement savings go? Cost reduction is an important part of CI. By doing things more efficiently, we can lower our cost. True, but unfortunately, it’s not that simple. Our customers expect CI efficiencies.  If not, they may move their business. But what about Hearthside’s costs? Here are just a few costs that go up
in our business EVERY YEAR

  • Wages and Salaries
  • Healthcare Costs
  • Ingredients and Materials
  • Utilities (electric, gas, water)
  • Facility Operations
  • Regulation and Compliance
  • Equipment Maintenance

These are huge, multi-million dollar increases and they rise every year. We work hard to control costs. For example, we can’t control the cost of utilities, but we can use them more efficiently. We can’t control the cost of healthcare, but we shop for maximum value. We continue to increase wages while also increasing employee productivity and always training to improve skills and abilities.

Continuous improvement is the most important practice we have. CI helps us increase efficiency, lower operating costs and improve quality. The savings, however are immediately eaten up by the above list of rising costs. That’s why we need all the continuous improvement we can find. It’s how, as a contract manufacturer, you navigate a raging river.

YOUR ROLE IN CI

It is not an exaggeration to say we would not be in business without our strong continuous improvement commitment. Every employee has a role in CI. Every job can be performed better. As times change, some jobs should change too. Take a look around with fresh eyes. Everyone has a role in CI. Our future depends on it. Thank you to everyone that strives to find a better way.