Tuesday, December 6, 2011

Focus and Leverage Part 63

In these two parts of Chapter 1, Joe meets his direct reports and gets an idea of how his new boss works….or doesn’t work and how his new company calculates savings.
Bob and Bruce

CHAPTER 1 Parts 2 and 3 for Epiphanized©

A book by Bob Sproull and Bruce Nelson


Joe smiled back and introduced himself.  “I’m Joe Pecci (pronounced Peecee), the new Continuous Improvement Manager . . . and you are?” 

“I’m Judy Godfrey and I had no idea we were getting a new manager! She turned toward the group. “Guys,” Judy said, "Did you know we were getting a new manager today?” 

They all said, “Nope, but that’s normal around here. No one ever tells us anything!”  One by one they all introduced themselves and shook Joe’s hand. 

“Oh boy,” thought Joe, “No one even knew that I was coming.  Is there a communications problem here?”

One man stepped forward. “I’m Bill Cody, one of the Lean Six Sigma black belts . . . pleased to meet you.”  Bill was perhaps the shortest man Joe had ever met in his life.  At best he was maybe five feet one inches tall. But he was also one of the bulkiest men Joe had ever met.  Not a whole lot of difference between Bill’s height and width, and he had a noticeable waddle when he walked. 

“Nice to meet you too, Bill,” said Joe. 

Another man introduced himself. “Manuel Gonzalez, s-sir, nice to meet you s-s-sir.  I’m also one of the b-b-black b-b-belts here,” he stuttered. Manuel was noticeably trembling as he shook Joe’s hand. 

“Calm down Manuel, I don’t bite,” Joe said.

Judy said, “Manuel is like this all of the time . . .  early stages of Parkinson’s disease.” 

“Sorry, Manuel, I didn’t know,” Joe responded in a feeble attempt at an apology. 

A third man stepped up. “Stan Wilson, Joe, good to meet you. And I’m a black belt here too, but I’m studying to become a master black belt.”  Stan appeared to be a very confident person. 

Joe asked Judy what her role in the office was, and she said jokingly, “My primary role is to keep these guys in line.”  Everyone laughed. Then she explained that her role as lean assistant was to prepare all of the graphs and charts and Power Point presentations for the quality director and to perform statistical calculations that everyone requested.  “I love my job,” said Judy, “but I just wish I’d get more advanced notice on things from the quality director. Everything I do is a last-minute adventure, and it’s frustrating to say the least.”

During his interviews Joe had met the quality director, his new boss.  The director seemed like a man in chaos and disarray, and he offered Joe a job on the spot.  The director explained that although the operator efficiencies were high, and the quality levels met the customer requirements, Barton was late on virtually every order and they had received threatening letters from their customer base.  He explained that one of Joe’s functions would be to find out why orders were late and to fix this problem. In fact, he told Joe that was to be his primary role—in addition to generating significant cost savings.  Since Joe’s background was manufacturing, and he had an excellent track record and references, the quality director told Joe that he expected rapid improvement in on-time delivery and cost savings. 

The quality director was nowhere to be found, and when Joe asked his team if anyone had seen the director today, Judy explained, “He isn’t here on Mondays . . . he’s on the golf course.”

Joe meets the Finance Director for the first time and as he will find out, he is totally into traditional cost accounting practices.  Joe discovers just how uninvolved the Finance team is in continuous improvement.
With the introductions complete, Joe asks, “What are you guys working on?”

Bill replied, “You don’t want to know.” He added, “Every quarter we have this mad scramble to come up with cost savings that we have to report to the government, and every quarter we have to dig deep into our projects to calculate how we’re doing.”

“Where’s the finance member of your team,” asked Joe.  Why aren’t they helping you?”

“Finance?” said Stan.  “There’s no member of Finance on our teams!”

“Why not?” Joe asked. 

“W-we’ve just n-n-never included them,” Manuel explained.  “W-we prepare our “b-best g-guess” on s-savings and s-s-submit it to them for review.  S-s-sometimes they accept it and s-s-sometimes they don’t,” he said. 

“You mean when you write your project charter, you don’t get advance agreement from Finance on the project and how you’re going to calculate savings?” asked Joe. 

“No way,” said Stan.  “They don’t understand the nature of our business.” 

Joe reviewed one of the project charters, and sure enough there was no sign-off from Finance at all.  Joe thought, “This explains why they’re in a state of chaos every quarter trying their best to justify cost savings.”  Joe knew he had to change this right away, so he asked Judy to set up a meeting with the finance director.  “Can you meet him in an hour, boss?” Judy asked.  “Tell him I’ll be there.” Joe responded.

For the next forty-five minutes Joe’s team discussed some of their old cost saving submissions.  In each case the savings were tied to cycle-time reductions and/or efficiency improvements.  In one project, the team reduced the cycle time in one of the process steps by one hour and claimed the cycle-time reduction as an annual cost savings. 

Joe asked, “Was the headcount reduced based upon the cycle-time reduction?” 

Stan replied, “No, they just moved two operators to other production lines.” 

Joe asked, “Then how was that seen as a cost savings?” 

His question was met with blank stares.  “W-w-we’ve always done it that way s-s-s…ir,” replied Manuel.  Joe could see that he had his work cut out for himself.

When Joe arrived at the finance director’s office, the director was on the phone but motioned for Joe to come in and have a seat.  It was apparent that he was talking to someone outside of Barton, probably someone at the corporate office.  He was talking in the usual cost-accounting gibberish, using expressions like operator efficiency, purchase price variance and other cost accounting nonsense. 

Finally, after ten minutes of conversation, the finance director finished his call and introduced himself.  “I’m Paul Johnson, the director of finance at Barton.” 

Joe replied, “I’m Joe Pecci, the new manager for the Continuous Improvement office.” 

After exchanging a few pleasantries, Joe broke the proverbial ice by saying, “Paul, I want to talk to you about why Finance isn’t a part of Barton’s continuous improvement projects.” 

“We have never been asked to be a part!” exclaimed Paul.  “I would love to have my folks be a part of your teams,” Paul said. 

“They’re our teams Paul,” Joe retorted. “So let’s get together, starting today.”

“Works for me,” said Paul.

In our next posting, Joe continues his discussion with the Finance Director and begins painting a different way of approaching the business.

Bob and Bruce

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