Saturday, September 12, 2020

My First Experience With TOC Part 3

 

Earlier I talked about what we called a Herbie Hunt.  For those of you who have never read The Goal, Herbie was an over-weight boy scout with an overloaded backpack who controlled the pace of a boy scout’s overnight hike.  The troop finally figured out that if they could reduce the weight of Herbie’s back pack, the troop could increase the amount of distance covered on their hike.  This was how the authors of The Goal, Eliyahu Goldratt and Jeff Cox, chose to introduce the concept of the constraint.  Let’s continue now with the story-line of this plant’s transformation.


One of the first constraint’s our team discovered was when it was time to mount the hardtop on the chassis of a BMW Z3.  Along the hardtop mounting surface there were 48 control points that had to be within the specification limits provided by BMW.  To our amazement, 36 of these points failed to conform to the specification limits.  Many of the points were above the spec limits and could be repaired, but many times they were below the limits and had to be scrapped.  In fact, approximately 20% of all of the tops fell into this category which caused deep financial pain for our plant.  I also discovered that the hardtop was 4 months late going to market.


We formed a team of hourly employees and our one, lone Engineer to solve this problem which turned out to be an alignment issue within our bonding process.  The team determined the root cause of the mismatch in surfaces, implemented an SPC initiative and the scrap level fell to almost zero which immediately improved our on-time delivery metric and the customer’s perception of our quality, plus our profit levels.  We celebrated this success with a pizza party which brought our two competing camps of employees that I mentioned earlier much closer together.  In addition, the morale of the work force as a whole jettisoned upward.


One of the problems I haven’t mentioned much so far was the quality of materials being received from our suppliers.  I remember on at least two occasions scrapping an entire batch of resin used in our hardtop molding process.  We also had supplier delivery issues from the standpoint of on-time delivery.  Part of this was due to our inability to pay our bills on time and part of it was due to the poor processes that some of our suppliers had.  As some of you might have guessed, the previous leadership, in an attempt to improve profitability, chose the lowest cost suppliers which in some cases had the poorest quality and on-time delivery rates.


One of our hourly employees suggested that we have a Supplier Appreciation Day and invite all of our suppliers into our plant.  He reasoned that if they could see how their products were used and talk about the problems we were seeing with their products, there would be an immediate improvement in both quality and on-time delivery.  Another employee suggested that we pay all of our bills within thirty days as an incentive for suppliers to improve their delivery performance.  Guess what……both ideas worked!!  Within a matter of weeks, our supplier performance improved dramatically and because we were paying within thirty days, we were able to negotiate significant early pay cost reductions which also helped improve our bottom line.


Earlier, I mentioned that when we subordinated the non-constraint processes to the newly identified system constraint, our efficiencies took a significant negative hit.  I remember our corporate office sending a team down to our plant to determine the cause of our deterioration in efficiencies.  They came unannounced and just sort of showed up at our front door.  I invited them into our conference room and they made a presentation demonstrating on a run chart the sudden decrease in our efficiencies.  I let them finish their presentation and asked them if they had looked at any other performance metrics?  Of course, they hadn’t!  I had anticipated a visit from corporate at some point because of our deterioration in efficiencies, so I had prepared a brief presentation of my own for when they arrived.


TO BE CONTINUED

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