By Policies and Directives

Leave a reply

“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

Leave a reply

“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?

Leave a reply

Registration closes tomorrow for our next Leadership program in Fort Lauderdale. Visit www.workingleadership.com. We kick-off the class this Wednesday, March 19.
__

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
__

For those believers, Happy St. Patrick’s Day!! Green beer tonight.

PAR

4 Replies

Corina was puzzled. Her simple Cap Ex budget exercise that took her a week to prepare, now knowing it was a 15 month Time Span task, had caused her to think. That’s the point. Defining the Time Span of the task communicates the “real” complexity of the task. This was not a simple exercise. The Cap Ex budget is a complicated task and will require some deep thought, some research, some data gathering.

“Where do I start?” she asked.

“Do you remember my golf analogy?” I replied.

“You mean PAR?”

I nodded.

“P stands for Purpose, A stands for Action, R stands for Results. First I have to define the Purpose?”

I nodded again. “We cannot go any further until we define the purpose. What is the purpose of the organization?”

“The organization?” she leaned back. “But I just run the plant floor?”

“But if you just think about the plant floor, you will make wrong decisions. What is the purpose of the organization?” -TF

Shrink Wraps in 20 Seconds

1 Reply

Our next Leadership class in Fort Lauderdale kicks off March 19. Visit www.workingleadership.com to register.
__
“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

Leave a reply

“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

Leave a reply

“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.

Supervisor’s Discretion

2 Replies

Job Description
Job Title: Supervisor
This is a Stratum II Position. This role in the organization is to make sure the work gets done.
Key Result Area 1 – Scheduling
Prescribed Duties: By Wednesday at 5:00p, post the team work schedule for the following week.
Time Span – 4 weeks. This task requires the supervisor to look ahead on a rolling 4 week basis, to anticipate changes due to team member vacations or other circumstances that will affect the team members attendance; and to look ahead on a rolling 4 week basis, to anticipate changes due to production fluctuations which may require a reduction in shift personnel or overtime. The supervisor will use discretionary judgment to create the schedule based on those circumstances. Overtime must be approved in writing by supervisor’s Manager.

“So, just posting the schedule on Wednesday isn’t the half of it,” Corina flatly stated. “I have always accepted that if the schedule got posted, the job was done. Now I am beginning to see that Supervisor effectiveness occurs way before Wednesday. Also, the boundary is very clear for discretionary judgment. Overtime requires approval.”

Corina thought for a minute.

“What about me?” she continued. “As a Manager, my job is different. How would discretionary judgment be stated on my job description?”
__
Our next Leadership Program in Fort Lauderdale begins Wednesday, March 19. For more information, visit www.workingleadership.com.

Discretionary Decisions

Leave a reply

“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

Herbie

Leave a reply

How do you incorporate discretionary behavior into a job description? Prescribed duties are easy, but what about the discretionary part?

When I was 17, I dropped out of high school and worked as a dishwasher at a restaurant. I quickly learned something about systems-thinking that stuck. In the middle of the work station sat a huge dishwashing machine. Temperature gauges, auto soap dispensing and a 90 second cycle timer. Whenever I placed a rack of dishes into the machine, there was a minimum 90 second cycle. No matter what I did, I could never go faster than the machine. The machine, in manufacturing terms, was my bottleneck. Herbie. My mantra was to keep Herbie working. Except for a few seconds each cycle, to move one tray out and a new tray in, my focus was to keep Herbie in cycle.

That 90 second period was my discretionary time. I could soak silverware, rack glasses, stack plates. It was my discretionary time that determined my throughput. If I kept trays in the queue, I was most effective. Whenever Herbie sat idle, I was losing ground. It is the discretionary behavior that determines effectiveness. How does a Manager capture that from team members? -TF