Category Archives: Timespan

Not Sam’s Problem

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“What has to happen in the next two hours that will indicate time well spent,” Sam asked. Each person looked around at each of the other members of this management team, then looked down and began to write.

It was not Sam’s intention to figure out the solution to this problem. It was Sam’s intention to have the group figure out the solution to this problem.

The responses from the team were positive.

  • We have to agree on the purpose. We have to agree on what we are trying to achieve. We have to agree on the goal.
  • We have to agree on what actions we will take. We have to agree on the coordination and interdependencies of those actions. This has to be a period of cooperation.
  • We have to agree on what results we are looking for. We have to agree on what measures we will collect and analyze. We have to agree to raise the flag when something doesn’t look right, not to bury our statistics in a warehouse.

Most importantly, this was no longer Sam’s problem. This problem now belonged to the group. -TF

A System Problem

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The conference room was comfortable. New leather chairs and a marble top. Nothing like success to create a little overhead.

Sam had assembled a cast of the brightest minds in the company. Marketing was represented, sales, customer service, production and accounting. Everyone looked armed with official looking reports, charts and graphs, ready to defend the slightest attack.

Sam was good. He wasn’t looking for a scapegoat. He knew the problem wasn’t from someone being lazy, or even a wrong decision. He knew it was more likely that the organization’s system needed some attention.

He began by explaining what he had observed, and asked each member to accurately report the real figures behind the events. Unfortunately, four weeks worth of excess finished goods had translated into an eight-week inventory turn. Something had put the brakes on the market.

“So, take a piece of paper,” Sam began, “and write down your condition of satisfaction for this meeting? What has to happen in the next two hours that will indicate time well spent?”

Hidden Over-Production

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The good news was that we had stumbled on the problem early. Sam arrived in Corina’s office about two minutes after the phone call.

“I thought something was up when I was down here a couple of weeks ago,” he reported. “I figured there must have been some snafu in shipping that was causing a bottleneck, and I had some fires somewhere else, so I hoped that shipping would figure it out on their own.”

“We figured it out,” Corina chimed in. “We put the over-production in the Fifth Street Warehouse, so we could keep working around here.”

“But, I thought we sold the Fifth Street Warehouse,” Sam interrupted.

“Almost. But I talked to the Real Estate Department and they hadn’t had any serious offers, the listing had just expired and they were actually glad that we needed the space to put the inventory.”

Sam looked especially troubled. “Corina, I need you to gather the data, the real data on what we have in the warehouse, and your current production rates. We need to do some thinking about this. Let’s meet tomorrow at 10:00 in the conference room.”

By Policies and Directives

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“I need you to make a phone call,” I told Corina. She looked puzzled, feeling guilty about something she wasn’t sure of.

“There’s a lesson in this,” I continued. “It’s a counterintuitive lesson that most people and organizations don’t learn until it’s too late.”

“So, you are talking about the difference between the company’s goal and my goal for the plant?” she asked.

I nodded, “Yes, the difference. There shouldn’t be a difference. But no one sat down and punched through all this, so there could be agreement. In fact, I would bet that you never sat in a meeting to truly clarify the goal for the plant. I would bet you assumed, by all manner of policies and directives, to produce as much as you could as efficiently as you could.”

I was nodding. Corina was nodding. “How much excess inventory is now hiding in that warehouse?” I asked.

Corina smiled, but quickly realized what had seemed to be good news wasn’t after all. “I would have to pull the reports, but I think we have about four weeks of production built up in the warehouse. I mean, we were building to forecast, but we weren’t selling to forecast.”

“Okay, let’s make that phone call.”

Out of Sight

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“Come on, I think you are splitting hairs,” Corina said. “Everyone knows that the goal of the company is to make money, and the goal of the plant floor is to make as much product as efficiently as possible.”

“Is it, really?” I asked.

Corina stopped. She was trying to be defensive without being defensive. Rarely works.

“Has there ever been a time,” I continued, “where you were doing such a good job on the plant floor that you produced more than the company was selling?”

“Oh, all the time. We always produce to the sales forecast that Joe puts together. And his forecast is always wrong. I mean, right now, is a good example. If you had been here last week, you would have seen stuff stacked up all over the place. We even had three semi-trucks in the parking lot loaded with finished goods.”

“Where is it all now?”

“Well, there was a warehouse that we were trying to sell. I got lucky and found out in time to stop it, so we moved all the excess inventory there. Now, that’s utilization of resources.”

“Who knows about this?” I probed. “Does Sam, your VP of Ops know?”

“Yeah, he was down here a couple of weeks ago and saw all the inventory. He looked concerned, but I told him we were working on it. When he came down a couple of days later, I had all the stuff taken care of. He looked relieved.”

Our conversation became quiet. -TF

Which Purpose?

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Registration closes tomorrow for our next Leadership program in Fort Lauderdale. Visit www.workingleadership.com. We kick-off the class this Wednesday, March 19.
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Corina was still puzzled. She was struggling with the question about the purpose for the organization. “The purpose for the plant,” she said, “is to make as much product as efficiently as we can.”

“I know that’s the way it seems,” I replied. “But what is the purpose for the organization?” Corina had been thinking about her Cap Ex budget for 2009. “If you only think about the plant, you will make wrong decisions,” I continued. “What is the purpose of the organization?”

Corina was in deep thought. She was certain this was a trick question. “The purpose of the organization is to make money,” she finally offered.

“Yes, and only when you remember that purpose, will your thinking about the budget be correct.” -TF
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For those believers, Happy St. Patrick’s Day!! Green beer tonight.

Shrink Wraps in 20 Seconds

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Our next Leadership class in Fort Lauderdale kicks off March 19. Visit www.workingleadership.com to register.
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“Yes, I have been looking at this new shrink wrap machine for next year. It picks up a pallet, automatically spins it and shrink wraps it, all in about 20 seconds. It’s pretty cool. It’s on my list of things to buy for next year,” Corina proudly stated.

“Great! But is that where we need to spend the money?” I asked.

“Well, I usually always get to spend what I spent last year. In fact, if I don’t spend it, I will lose my budget the following year and will have to do a song and dance to spend anything.”

“But is that where we need to spend the money?” I repeated.

Corina looked down at her feet, then back up. “I really don’t know. Every year, I go out to the equipment show in Las Vegas and look around. I have a pretty good eye for deals on equipment and I have to justify the trip.”

“But is that where we need to spend the money? Where, in your system, should we focus our attention? Remember, as a manager, your role is to create, monitor and adjust the systems in your area. I really don’t care about neat robotic equipment. I care more about impact on the system.” -TF

Cap Ex Time Span

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“I know I have a budget report to submit every October, but it only takes me about a week to put it together. I just look around and see what equipment on the floor really needs replacing, get some vendor quotes and run it up the flag pole. Sometimes I get the budget, most times I don’t. You describe this as a 15 month Time Span task?” asked Corina.

“That’s the problem,” I replied. “If you see that report as a one week Time Span task, then it is of little value to the company. That is why identifying Time Span is so important. Only when you understand that this is a 15 month Time Span task do you understand that it is a much bigger project.” I could see a glimmer of understanding, so I pressed.

“By October, I need you to really look into the future for the entire following year. I need you to get a big piece of paper and flow chart out your system. I want to see each production element, time studies on each process, handoffs, bottlenecks and dependencies. Using your discretionary judgment, I want a well-thought out recommendation for Cap Ex that will help the company earn money. It still might only take a week to prepare the report, but the thinking is much deeper. This is a 15 month Time Span project.” -TF

Manager’s Discretion

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“What about me?” Corina continued. “As a Manager, my job is different. How would discretionary judgment be stated on my job description?”

“Let’s take your job description, identify one of your Key Result Areas and see what we come up with,” I said.

Job Description
Job Title: Plant Manager
This is a Stratum III Position. This role in the organization is to create the systems in the plant, monitor and improve those systems.
Key Result Area – Cap Ex Equipment
Prescribed Duties: By October 1 each year, the Plant Manager will submit to the Management Team an analysis and recommendation for the purchase and retirement of all production equipment whose value (at purchase) is $5,000 or greater for the following calendar year.
Time Span – 15months. This task requires the Plant Manager to look ahead to the following calendar year, to anticipate changes in production systems and work flow or other circumstances that will affect production capacities; to examine the remaining useful life of existing equipment and to explore new technologies which may be useful in the plant. The Plant Manager will use discretionary judgment to analyze production capacities, market demand (from sales) and return on investment on each piece of equipment. The Cap Ex Equipment plan will be reviewed by the Management team for modification and approval by November 30 each year.

Discretionary Decisions

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“How do you talk about discretionary judgment in the Job Description?” Corina asked.

“Right at the top,” I replied. “And attached to each Key Result Area.”

“Okay, I have a supervisor position. The Key Result Areas are:

  • Scheduling
  • Equipment Maintenance
  • Safety
  • Production

“The prescribed duties are easy,” Corina explained. “The supervisor has to post the schedule, maintain the equipment, prevent time-lost accidents and meet the production schedule. How do you figure in discretionary judgment?”

“The first element to establish is the Time Span of Discretion. How long do you, as the Manager, expect the team member to be able to make routine decisions (using their discretionary judgment) without having to come to you for direction? And that Time Span may be different in each Key Result Area.

“Let’s start with scheduling. How far into the future do you expect your supervisor to schedule your team members in their work assignments?”

Corina squinted, “I believe next week’s schedule is always posted the Wednesday before.”

“And what about the week after that, and two weeks out and three weeks out?”

“Well, those aren’t posted, but the supervisor has them in a notebook on his desk. They’re not finalized because some people may have vacation, or the production schedule may require overtime.”

“So, the supervisor is looking out four weeks into the future, using his discretionary judgment, making decisions about work assignments based on things like vacation and production schedules. Would you say the Time Span of Discretion is about four weeks?”

“Yes,” Corina began to nod. “It’s not just that the supervisor posts the schedule on Wednesday. To do an effective job, it’s the discretionary decisions being made four weeks out, in his notebook, looking ahead.” -TF