Can Be An Agent of Change!
know what's wrong. You even have a pretty good idea of how to fix it. In
fact, you've known for years. Sound familiar? Why don't improvements get
Let me tell you a true story about how I learned the answer. A number of
years ago, I worked for a company that experienced a disaster. A fire consumed
nearly all of our manufacturing area and three-quarters of our storeroom.
We were underinsured and in the "school of hard knocks" that
followed, many valuable lessons were learned.
Before the fire, an order point system was used to plan and schedule parts.
As with all order point systems, the planning and scheduling had deteriorated
into shortage-expedite activities. The change caused by the fire overwhelmed
the shortage-expedite and order point practices. The founder of the company,
Don Bently, decided that we needed to implement "material requirements
planning" and I was selected to be the project leader. Since resources
were short, the system had to be implemented a module at a time. We started
with the master schedule. The material requirements planning module followed,
and then a rudimentary shop floor control system was implemented.
With those modules under our belt, it was time to decide what to do next.
Discussions focused on whether the capacity requirements planning or the
sales and operations planning module should be next. As the project leader,
I crystallized the decision by calling a meeting. Based on the observation
that our delivery problems were often associated with shop capacity problems,
Don's opinion was that we should implement CRP next.
Our consultant, Dave Garwood, had said that sales and operations planning
should be next. When I told Don that we should do S&OP next, he asked
me why. My answer was "Because the consultant told me so." Don's
response was "fine, do capacity planning next." I have a lot
of respect for Don Bently's abilities, so I implemented the capacity planning
Unfortunately, capacity planning worked just as advertised. The shop was
able to effectively coordinate the resources necessary to execute the master
schedule, front-end load and all. And what a front-end load it was! Before
CRP, Bently Nevada had a $3 million bubble of production in the front of
the master schedule above the $16 million annual business plan. The shop
planned the capacity and built the $16 million the customers wanted plus
the $3 million of over-planning in the front of the schedule. What the
customers didn't want went into inventory.
Then came the shock of my life. I was held responsible for the increased
inventory, which had badly compromised cash flow. Why me? I hadn't made
the decision to do CRP first. I struggled with these questions for a long
time until I realized that, in fact, I was responsible.
You see, I should not have answered Don's question with "because the
consultant said so." Good leaders don't blindly follow. Leaders think
and decide. Seeing the capacity mess on the shop floor carried a lot more
weight with Don than a third party saying, "do this first." I
should have taken the time to gather the facts (we were asking the shop
to do $3 million more work than the customers wanted) and present the concepts
(get the supply plans balanced with the customers' demand and inventory
won't build up.) I am convinced that if I had presented the facts and concepts,
Don would have said "do sales and operations planning first."
Ironically, Dave Garwood would have been glad to help me organize a presentation,
if I had only asked.
Even smart business people cannot make the right decisions without the
facts and concepts. I didn't do my job. I didn't present the facts and
concepts. I was responsible. You might think that he should have gotten
the facts and concepts himself, but after the fire, Don had a lot on his
plate. We had to get machinery rebuilt, manage credit with the bank, remain
in contact with the customers until we could start delivering on time.
He had to depend on what he had observed and information I presented.
Your leader may have different concerns. A merger or acquisition might
be in progress. It is always necessary to spend time communicating with
the parent company or shareholders. And understanding the marketplace is
a critical but time-consuming process.
The moral of the story is - your job is to clearly present the facts and
the concepts to the decision-makers. When ideas for improving the business
are not effectively presented, they don't get implemented.
Need help? Give us a call and we will brainstorm the best approach for
you to present ideas to your decision-makers!