"Anything?’’ asks Sharon.
"Within reason,’’ I repeat.
So they leave and I get about ten minutes of peace and quiet.
Then I see the two faces looking around the corner. "Ready?’’ I ask.
They come in and sit down at the kitchen table with me. "Want to hear my
idea?’’ asks Sharon.
"My idea is better,’’ says Dave.
"It is not!’’ she tells him.
"Okay, enough!’’ I say. "What’s your idea, Sharon?’’ Sharon says, "A
drummer.’’
"Pardon me?’’
"You know...like in a parade,’’ she says.
"Oh, I know what you mean,’’ I say, realizing what she has in mind. "There
aren’t any gaps in a parade. Everybody is marching in step.’’
Sharon beams. Dave gives her a dirty look.
"So everybody’s marching in step . . . to a beat,’’ I say, thinking out loud.
"Sure. But how do you keep the people in front of Herbie from setting a
faster pace?’’
"You have Herbie beat the drum,’’ says Sharon. I think about it and say,
"Yeah, that’s not bad.’’ "But my idea is better,’’ says Dave.
I turn to him. "Okay, wise guy, what’s your idea?’’ "Tie ropes to everyone,’’
says Dave.
"Ropes?’’
"You know, like mountain climbers,’’ he says. "You tie everyone together at
the waist with one long rope. So, that way, no one could get left behind, and
nobody could speed up without everybody speeding up.’’
I say, "Hmmm... that’s very good.’’
It would mean that the line—which would translate to the total inventory in
the plant—could never be longer than the rope. And the rope, of course,
could be of a pre-determined length, which means we could control it with
precision. Everyone would have to walk at the same speed. I look at Dave, a
little in awe of his creativity.
"Come to think of it, the rope makes it sound like having physical links
between all the equipment,’’ I tell him, "which is like an assembly line.’’
"Yeah, an assembly line,’’ says Dave. "Didn’t you tell me once that an
assembly line is supposed to be the best way to make things?’’
"Well, yes, it’s the most efficient way to manufacture,’’ I say.
"In fact, we use that approach when we do the final assembly for most of our
products. The problem is that an assembly line won’t work throughout the
whole plant.’’
"Oh,’’ says Dave.
"But those are both good ideas you two thought up,’’ I tell them. "In fact, if
we changed each of your ideas just a little bit we’d almost have the solution
suggested to us today.’’ "Like how?’’ asks Sharon.
"See, to keep the line from spreading, it actually wouldn’t be necessary to
keep everyone marching to exactly the same step or to keep everyone tied to
the rope,’’ I tell them. "What we really have to do is just keep the kid at the
front of the line from walking faster than Herbie. If we can do that, then
everybody will stay together.’’
"So we just tie the rope from Herbie to the kid at the front,’’ says Dave.
"Or, maybe Herbie and the boy at the front of the line have signals,’’ says
Sharon. "When the boy in front goes too fast, Herbie tells him to wait or slow
down.’’
"That’s right,’’ I say. "Both of you figured it out.’’ "So what do we both
win?’’ asks Sharon.
"What do you want?’’ I ask. "A pizza with everything? A night at the
movies?’’
They’re quiet for a moment.
"The movies sound good,’’ says Sharon, "but what I’d really like is if you
could get Mom to come home again.’’
Now it gets very quiet.
Dave says finally, "But if you can’t, we’ll understand.’’ "Well, I’m doing my
best,’’ I say. "Meanwhile, how about the movies?’’
After the kids have gone to bed, I sit up wondering for the hundredth time
whether Julie will come back. Compared with my marital difficulties, the
inventory problem at the plant seems simple—or at least it seems simple
now. I guess every problem is easy once you’ve figured it out.
We are, in effect, going to do what my two kids came up with. The Herbies
(the bottlenecks) are going to tell us when to let more inventory into the
system—except we’re going to use the aid of computers instead of drums and
ropes.
After we returned to the conference room in the office building today, we
started talking, and we all agreed that we’re obviously releasing too much
material. We don’t need five or six weeks of inventory in front of the
bottleneck to keep it productive.
"If we can withhold materials for red parts, instead of pushing them out there
as soon as the first non-bottleneck has nothing to do,’’ said Stacey, "the
milling machines will then have time to work on the green parts. And the
parts we’re missing will reach assembly with no problem.’’
Jonah nodded and said, "That’s right. What you have to do is find a way to
release the material for the red parts according to the rate at which the
bottlenecks need material—and strictly at that rate.’’
Then I said, "Fine, but how do we time each release of material so it arrives
at the bottleneck when it’s needed?’’ Stacey said, "I’m not sure, but I see
what you’re worried about. We don’t want the opposite problem of no work
in front of the bottleneck.’’
"Hell, we got at least a month before that happens, even if we released no
more red tags from today on,’’ said Bob. "But I know what you mean. If we
idle the bottleneck, we lose throughput.’’
"What we need,’’ I said, "is some kind of signal to link the bottlenecks with
the release-of-materials schedule.’’
Then Ralph, to my surprise, spoke up and said, "Excuse me, this is just a
thought. But maybe we can predict when to release material by some kind of
system based on the data we’ve kept on both the bottlenecks.’’
I asked him what he was getting at.
He said, "Well, since we started keeping data on the bottlenecks, I’ve been
noticing I’m able to predict several weeks in advance what each bottleneck
will be working on at a particular time. See, as long as I know exactly what’s
in queue, I just take the average setup and process times for each type of part,
and I’m able to calculate when each batch should clear the bottleneck.
Because we’re only dealing with one work center, with much less
dependency, we can average the statistical fluctuations and get a better degree
of accuracy.’’
Ralph went on to say that he knows from observation it takes about two
weeks, plus or minus a day or two, for material to reach the bottlenecks from
the first operations.
"So by adding two weeks to the setup and process times of what’s in queue at
the bottleneck,’’ said Ralph, "I know how long it will take until the
bottleneck is actually working on material we release. And as each batch
leaves the bottleneck, we can update our information and calculate a date
when Stacey should release more red-tag material.’’
Jonah looked at Ralph and said, "that’s excellent!’’
"Ralph,’’ I said, "that’s terrific. How accurate do you really think we can be
with this?’’
"I’d say we’d be accurate to within plus or minus a day,’’ he said. "So if we
keep, say, a three-day stock of work-in-process in front of each bottleneck,
we should be safe.’’
Everyone was telling Ralph how impressed they were when Jonah said, "But,
in fact, Ralph, you can do much more than that with the same information.’’
"Like what?’’ asked Ralph.
Jonah said, "You can also attack the inventory problems in front of
assembly.’’
"You mean we not only can do something about excess inventory on the
bottleneck parts, but on the non-bottleneck parts as well?’’ I asked.
"Exactly,’’ said Jonah.
But Ralph said, "Sorry, folks, I’m not sure how I’d do that.’’
Then Jonah explained it to him—and all of us. If Ralph can determine a
schedule for releasing red-tag materials based on the bottlenecks, he can also
determine a schedule for final assembly.
Once he knows when the bottleneck parts will reach final assembly, he can
calculate backwards and determine the release of the non-bottleneck
materials along each of their routes. In this way, the bottlenecks will be
determining the release of all the materials in the plant.
I said, "You know, that’s going to produce the same effect as moving the
bottlenecks to the head of production, which is what I’d intended for us to
do.’’
“Yeah, it sounds good,” said Ralph. “But I have to warn you, I can’t say how
long it’ll take before I can do all that. I mean, I can have schedule for the red-
tagged materials worked out in a fairly short order. The rest of it will take
awhile.”
"Aw, come on, Ralphie,’’ said Bob, "a computer wiz like you ought to be
able to crank that out in no time.’’
"I can crank something out in no time,’’ said Ralph, "but I’m not going to
promise it’ll work.’’
I told him, "Relax; as long as we ease the load on the milling machines, we’ll
be okay for the short haul. That’ll give you the time to get something basic in
place.’’
"You may feel you have the time now to relax,’’ said Jonah, "but I have to
catch a plane for Chicago in thirty-five minutes.’’ "Oh, shit,’’ I muttered,
automatically glancing at my watch.
"I guess we’d better move.’’
It was not a graceful parting. Jonah and I ran out of the building, and I broke
numerous speed limits—without incident—getting him to the airport.
"I have, shall we say, a special interest in plants like yours,’’ said Jonah. "So
I’d appreciate it if you’d keep me informed of what happens.’’
"Sure,’’ I told him. "No problem. In fact, I’d planned on it.’’ "Good,’’ said
Jonah. "I’ll be talking to you.’’
And with that he was out of the car and, with a wave, was sprinting through
the terminal doors. I didn’t get a call, so I suppose he made it.
When I go to work the next morning, we have a meeting about how to
implement this approach. But before we can get down to talking about it, Bob
Donovan starts waving a red flag at us.
"You know, we could be walking into a big problem,’’ says Bob.
"What’s that?’’ I ask.
"What happens if efficiencies all over the plant go down?’’ he asks.
I say, "Well, I think that’s a risk we’ll have to take.’’
"Yeah, but it sounds like we’re going to have a lot of people idle around
here if we do this,’’ says Bob.
"Yeah, we might have some people idle from time to time,’’ I admit.
"So are we just supposed to let everyone stand around out there?’’ asks Bob.
"Why not?’’ asks Stacey. "Once the somebody is already on the payroll, it
doesn’t cost us any more to have him be idle. Whether somebody produces
parts or waits a few minutes doesn’t increase our operating expense. But
excess inventory...now that ties up a lot of money.’’
"Okay,’’ says Bob, "but what about the reporting system? Seems to me that at
the end of the month, when old Bill Peach is ready to decide if we stay open
or if we close down, he’s not going to be awfully positive about us if he sees
our efficiencies have taken a dive. I hear they do tend to frown upon that at
headquarters.’’
There is quiet in the room. Then Lou says, "He does have a point, Al.’’
I listen to the hum of the air conditioning for a moment.
"All right, look,’’ I say finally. "If we don’t go ahead with a system to
withhold inventory and release it according to the bottlenecks, we’ll be
missing a major opportunity to improve performance and save the plant. And
I’m not about to stand by and let that happen just to maintain a standard that
obviously has more impact on middle management politics than it does on
the bottom line. I say we go ahead with this. And if efficiencies drop, let
them.’’
After those brave words, so reminiscent of Admiral Farragut and his Damn-
the-Torpedoes speech, the others are a little mistyeyed.
"And, ah, Bob,’’ I tell Donovan, "if there is a lot of idle time out there, don’t
hassle anybody—just make damn sure it doesn’t show up in the efficiency
reports next month, okay?’’
"Gotcha, boss.’’
27
"...Let me say in conclusion that had it not been for the increase in
revenue generated last month by the Bearington plant and its products, the
UniWare Division’s losses would have continued for the seventh consecutive
month. All of the other manufacturing operations in the division reported
only marginal gains in performance or sustained losses. Despite the
improvement at Bearington and the fact that as a result the division recorded
its first operating profit of this year, we have a long way to go before we are
back on solid financial footing.’’
Having said that, Ethan Frost gets the nod from Bill Peach and sits down.
I’m sitting halfway down a long table where all the plant managers are
gathered. On Peach’s right is Hilton Smyth, who happens to be glowering at
me in the aftermath of Frost’s tribute to my plant. I relax in my chair and for
a moment allow myself to contemplate the view through the broad plateglass
window, a sunny city on an early summer day.
May has ended. Aside from the problem with the shortages of non-
bottleneck parts, which have now gone away, it’s been an excellent month.
We’re now timing the release of all materials according to a new system
Ralph Nakamura developed, which is keyed to the speed of the bottlenecks.
He’s got a data terminal now at both of the bottlenecks, so as inventory is
processed, the latest information can be fed directly into the plant data base.
With the new system we’re beginning to see excellent results.
Ralph did a little experimenting with the system and soon discovered we
can predict within a day, more or less, when a shipment will leave the plant.
Based on this, we’ve been able to put together a report to marketing listing all
customer orders and dates when they will be shipped. (I don’t know if
anybody in marketing really believes that report, but so far it’s been highly
accurate.)
"Rogo,’’ says Peach, "because you seem to be the only one among us
who has improved to any degree, we’ll let you start the round of reports.’’
I open up the cover of my report and launch into a presentation of the
highlights. By almost every standard, we’ve had a good month. Inventory
levels have fallen and are continuing to fall rapidly. Withholding some
materials has meant we’re no longer choking on work-in-process. Parts are
reaching the bottlenecks when they’re supposed to, and the flow through the
plant is much smoother than before.
And what happened to efficiencies? Well, they did fall initially as we
began to withhold raw material from the floor, but not as much as we had
been afraid they would—it turns out we were consuming excess inventory.
But with the rate of shipments up dramatically, that excess has melted
quickly. And now that we’re beginning to resume releases of materials to
non-bottlenecks again, efficiencies are on their way back up. Donovan has
even told me confidentially he thinks the real numbers in the future will be
almost the same as before.
The best news is we’ve wiped out our backlog of overdue orders.
Amazing as it seems, we’re completely caught up. So customer service has
improved. Throughput is up. We’re on our way back. It’s too bad the
standard report we’ve prepared can’t begin to tell the full story of what’s
really going on.
When I’ve finished, I look up the table and see Hilton Smyth whispering
something to Bill Peach. There is quiet around the table for a moment. Then
Bill nods to Hilton and talks to me.
"Good job, Al,’’ Bill says stiffly.
Through with me, Bill asks another manager to deliver his report. I sit
back, irritated slightly that Peach wasn’t more positive, that he didn’t put
more praise on me the way Frost had indicated he should. I came in here
feeling as though we’d really turned the plant around. And I guess I expected
a little more than a "good job,’’ a pat on the head.
But then I have to remind myself that Peach doesn’t know the extent of
the change. Should he know? Should we be telling him? Lou has asked me
about this. And I’ve told him, no; let’s hold off for a while.
We could go to Bill Peach and make a presentation to him, put all our
cards on the table and let him decide. In fact, that’s exactly what we will do
eventually. But not yet. And I think I have a good reason.
I’ve worked with Bill Peach for a lot of years; I know him pretty well.
He’s a smart man—but he is not an innovator. A couple of years ago, he
might have let us run with this for a while. Not today. I have a feeling if we
go to him now, he’ll put on his hard nose and tell me to run the plant by the
cost accounting methods he believes in.
I have to bide my time until I can go to him with a solid case that my way
(Jonah’s way, really) is the one that truly works. It’s too early for that. We’ve
broken too many rules to tell him the full story now.
But will we have the time? That’s what I keep asking myself. Peach
hasn’t voluntarily lifted the threat to close the plant. I thought he might say
something (publicly or privately) after this report, but he hasn’t. I look at him
at the end of the table. He seems distracted, not like himself. The others talk
and he seems only half interested. Hilton seems to cue him on what to say.
What’s with him?
The meeting breaks up about an hour after lunch, and by then I’ve
decided to have a private talk with Peach if I can get it. I follow him out into
the corridor from the conference room and ask him. He invites me into his
office.
"So when are you going to let us off the hook?’’ I ask him after the door
is closed.
Bill sits down in a big upholstered chair and I take the one opposite him.
Without the desk between us, it’s a nice little intimate chat.
Bill looks straight at me and says, "What makes you think I’m going to?’’
"Bearington is on its way back,’’ I tell him. "We can make that plant make
money for the division.’’
"Can you?’’ he asks. "Look, Al, you’ve had a good month. That’s a step in
the right direction. But can you give us a second good month? And a third
and fourth? That’s what I’m waiting to see.’’
"We’ll give them to you,’’ I say to him.
"I’m going to be frank,’’ says Peach. "I’m not yet convinced this hasn’t been
just a flash in the pan, so to speak. You had a huge overdue backlog. It was
inevitable you’d ship it eventually. What have you done to reduce costs?
Nothing that I can see. It’s going to take a ten or fifteen percent reduction in
operating expense to make the plant profitable for the long term.’’
I feel my heart sink. Finally, I say, "Bill, if next month we turn in another
improvement, will you at least delay the recommendation to close the plant?’’
He shakes his head. "It’ll have to be a bigger improvement than what you
gave us in this past period.’’
"How big?’’
"Just give me fifteen percent more on the bottom line than you did this
month,’’ he says.
I nod. "I think we can do that,’’ I say—and note the split second of shock
blink into Peach’s face.
Then he says, "Fine. If you can deliver that, and keep delivering it, we’ll keep
Bearington open.’’
I smile. If I do this for you, I’m thinking, you’d be an idiot to close us.
Peach stands, our chat concluded.
I fly the
Mazda
up the entrance ramp to the Interstate with the accelerator
floored and the radio turned up loud. The adrenalin is pumping. The thoughts
in my head are racing faster than the car.
Two months ago I figured I might be sending out my resume by now. But
Peach just said if we turned in another good month he’d let the plant stay
open. We’re almost there. We just might be able to pull this off. Just one
more month.
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