Once in another lifetime I received an extraordinary phone call one morning. The caller claimed to be the Business Development Manager for one of the larger multi-national corporate conglomerates in the world. At the time, they weren’t exactly a household name, but the stock market thought differently.
The caller informed me his firm had recently acquired the assets of a large factory located near me. He needed a business and technology viability study done ASAP. Would I be interested? I explained that I couldn’t be impartial. The CAD department at the factory was already a client. Well, it seems the plant manager had recommended me in the first place. They needed a study and solutions. I took the job.
Not the Same Sad Tale
To be clear the event occurred decades ago. The manufacturer remains a famous American brand name to this day. The plant near me is long gone. Hundreds of jobs were lost to the local economy. The abandoned buildings that the company once occupied are still a large empty eyesore if you know where to look. You know the scene. You’ve seen to movie. The reality of the closure is not what we expect.
The saddest part of the tale is the powers that be in that the “mean” multi-national corporation wanted that local plant to stay open. They wanted to keep employing the skilled blue collar and white collar labor and management team. They had invested heavily to acquire the brand and that particular plant with those people in that location. They were willing to do almost anything within reason not to lose their investment. This included the willingness to retool the plant to produce a completely different product line.
Was The Competition the Problem?
The problem was the plant was good at producing a great product that no one bought anymore. They were particularly fantastic at building high-priced, high-value, and one-of-a-kind, specialized products. The plant made products in small lots of 1-5 items.
Their main competition, who is also a recognized brand, had slowly redefined the product marketplace by revolutionizing the customization of cheaper stock products into specialized ones. You could buy a “customized” product from them for half the price. The competition produced products in lots of 10-25 items.
As the plant head of sales put it to me,
“We make the best steak dinner you can buy, but suddenly everyone wants to buy only McDonalds hamburgers.”
Yes. Old school CAD technology played a significant part in the competitive divide, but technology as you think of it wasn’t the key issue. Actually, there was also nothing sudden about it either.
Can We Change to Save Our Jobs?
I spent close to 90 days in that plant. I interviewed most employees and all the management staff. I lost count of meetings and brainstorming sessions. All the people involved understood what was at stake. I crawled around in all the usual business places, and some unusual places too. The business manager, the plant manager, and I became friends. We worked on other projects together and separately afterwards. Plant employees became friends too. The effort to keep the plant open became personal.
In the end it became apparent that the issue was not the difference between steak dinners and hamburgers, but the specifics of how the plant manufactured their product. The production workflow.
The production folk were able and willing to do things differently. The sales folk believed they could sell differently. However, plant accounting wouldn’t change how they counted the beans. Specifically, how the inventory reports delivered parts out of inventory in a functional working order to the shop floor.
We discovered that a large percentage of shop floor labor time was spent moving around unneeded parts that were delivered in the wrong order. When the plant could sell steak the wasted time didn’t particularly seem to matter. When they had change things to compete with the hamburger guys the wasted man-hours at scale caused the wheels to come off.
For most of the plant staff the wasted man-hours were initially, totally invisible.
Why Refuse to Change?
The inventory control problem had been a bone of contention between accounting and the shop floor continuously for many years. When you produce one-off products any inventory control system is going to produce sequential order problems not to mention cost-control and availability problems reporting on inventory issues.
In the end plant accounting trained themselves to ignore the complaints of everyone around them. They saw themselves as a fortress of rationality in a world of crazy people who could never quite make up their minds. The shop workforce found an outside yard to dump the bogus and unwanted parts. The eventual scrap value of the parts in the storage yard was extraordinary.
The plant closed and now you know the rest of the story.
People will do what it takes to make a problem go away. Whether what they do solves the problem, isn’t always closely examined.
Workflow is Never Simple or Static
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