You Can Be An Agent of Change!

by Dave Biggs

You 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 made?

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 module next.

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!