My First Experience With TOC Part 1

Over the years, I’ve written many books about the Theory of Constraints (TOC), but it’s my belief that, by sharing my first experience with TOC, it could help those in charge of manufacturing companies perform at a higher level.   The basic teaching of TOC is all about being able to identify the limiting factor in a system or process that controls the rate of units through it and then focus improvement efforts on it to leverage the potential gains to be made.  I’ve been using this methodology since the 1990’s and in every case, it has provided significant improvements. So, with this basic belief in mind, here’s my story about how I first learned about TOC and how I used it to transform a company.

In the early 1990’s I had been hired by a company that produced fiber glass hard tops on one side of the plant and convertible tops on the other side.  This company employed approximately 250 employees and when I arrived at this site in Kentucky, I found it virtually in shambles.  Apparently it had just missed being unionized by five votes, so the work force was pretty much split down the middle in terms of “camps” with one camp being pro-management, and wanting to turn this plant around, and the other camp, those who had voted to unionize the facility, having a very negative view of leadership. 

From a financial perspective, the facility was on credit hold with some of its key suppliers and overtime within the plant was very high.  Customers were threatening to pull their business because of poor quality and terrible on-time delivery.  Absenteeism was high and morale was in the tank.  Sounds like a fun place to work, doesn’t it?

I had been hired as the new General Manager of this manufacturing facility and on the first day I arrived, the CEO and I had a closed-door meeting.  One of the first things he told me, floored me to say the least.  The CEO explained to me that he wanted me to close the plant!  I was shocked to say the least.  I pushed back hard and told the CEO that if he wanted me to stay at this plant, he needed to give me an opportunity to turn this facility into a profitable one.  After a much-heated discussion, we eventually agreed that I would have three months to turn the facility into a profitable one. After three months, if it wasn’t profitable, then I would close its doors.  I saw this as the largest challenge of my life, because closing this facility would be a failure on my part and I hate failing.  Plus, there were some 250 employees who needed these jobs, so in my mind closing the plant was really not an option.

Prior to accepting this job, my background had been almost exclusively in Quality and Engineering with virtually zero operations management experience.  My mentor from previous assignments, this company’s CEO, had talked me into accepting this job offer and when I asked him why he had chosen me, since I had no previous operations experience, he simply told me that all I needed was my quality ethic and my people skills.  Little did I know that I would need much more than just those two qualities.

There were two operation’s managers currently at this facility.  One had been there for 20 years and the other had just been hired.  Because I had no real operations management experience, I thought I could rely on my two operations managers, but as I found out quite early on, that wasn’t a good thought.  Neither of them could offer any real vision for what we had to do to effectuate a turn-around.  Needless to say, I was starting to panic!

In my next post, I will continue on with my first experience with TOC