Featured Story 4: Efficiency vs. Effectiveness
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FEATURED STORY: Efficiency vs. Effectiveness

This story is copyrighted by Spectrum Publishing. All requests to use it must be addressed to info@spectrum-pub.com

 THE STORY:  Bob was a long-time employee of a mid-size manufacturer of electronic timekeeping instruments where he worked up from a machine operator to a line supervisor.  He had just left his performance review meeting with his boss.  He was unfairly (he believed) criticized for not meeting the 95% on-time delivery goal that was set for him.  "It wasn't my fault that Purchasing didn't have the material here on time or that some of it wasn't to spec," he said to himself as he left the meeting.  "What about the end of the month where someone screwed up and didn't have enough dollars shipped to make budget?  We had to change the schedules to get the big orders out.  While all of this was going on, I still had to make my earned hours and get efficiencies to 90%.  Well, the boss did give me a pat on the back for meeting the 90% efficiency goal."

Bob decided to take a quick trip to the cafeteria for a cup of coffee.  As he rounded the corner, he almost ran into Pat from Material Planning."  Bob, I want to talk to you about the work in process in your line.  I had a bad meeting with my boss about not meeting my goals."  "So did I," replied Bob.  "Join me for a cup of coffee?"
As they were standing in line, they both saw Fran from Purchasing.  "I want to talk to Fran if you don't mind, Pat."  "Mind?  I want to talk to her too.  She is the one who bought all of the raw and purchased materials that my boss was on my case about."
As they approached Fran, she looked up and smiled.  "Sit down and I'll buy you something to go with your coffees."  Bob said, "You seem pretty happy."  "I met my purchased part variance goal.  I dropped the budget on your line by 5%."  Pat decided to play cat and mouse.  "How did you do it?" she asked.  "Well, first I bought with quantity discounts; second, I found a supply of less costly material; and third, I found a tool house that could really cut corners on tooling."

"But the tooling is not the same and I have to change tools more often," Bob said, fuming.  "The material has hard spots which take longer to machine and the vendor doesn't deliver on time so I have to run more overtime.  I'm going crazy to get my efficiencies up which means I have to combine orders…"   Pat cut Bob off, "Bob, combining those jobs creates more work in process.  Fran, you're buying more than we need so inventory is going up, and the quality of the tooling and material is slowing down the machines increasing the inventory even more.  Boy Fran, you get the cigar while we get the shaft!" Keith from Personnel overheard the argument from a nearby table.  "Whoa.  Let's go out for lunch together later to discuss this.  I'll buy."  "OK," said the group.
They headed to a local fast food restaurant.  In the car, Keith explained how everyone affected each other and how they all affect the customer.  As they arrived at the restaurant, Keith told everyone to look behind the counter carefully and that they would discuss it later. 

After the group gave their orders, they sat to wait for them to be put together while they watched the action behind the counter.  The drive-in person was helping put fries in packets.  The manager was running around helping each of the order people finish their order.  The hot dog man was cleaning the grill.
They picked up their orders at the counter when they were ready.  Bob's onion rings weren't ready, but the counter person told him that someone would bring them to him at his table when they were ready.  Nobody remembered this kind of service at a fast food place before.  "Boy", said Bob, "everyone seems to be helping someone else.  I wonder if something like this would work at our plant?"  Just then a young man delivered his onion rings and then began to clean the empty tables.  "This can work," said Keith.

DISCUSSION:  The group was watching true teamwork in action.  They could see that the team goal was to get each customer his food as quickly as possible to preserve the freshness, make sure it was hot, and maintain the 'fast' in fast food.  Keeping the customer happy with personal delivery when necessary (onion rings) and cleaning tables and bathrooms all go into the customer service aspect of fast food.
They also realized that if the team goal was to maximize efficiencies first, and provide customer service second, there would be lots of burgers left uneaten, shakes, fries and apple pies not fresh, and delays in any unusual items.  Things like cleaning tables and restrooms would be considered "non-productive" time.  As they related these thoughts back to their plant, they could see how the way each of their departments worked caused a lot of the problems they had. Their plant always seemed to have the wrong finished goods on hand, and special orders were always very difficult to get through the plant.  Also, the aisles were always cluttered and tools were always being misplaced.
THOUGHT:  Back at the plant, they will probably find that if they try the teamwork approach they saw in the fast food restaurant, they'll have some problems.  Management's mindset has been for workers to specialize even though there was talk of cross training.  Even if they can get some of the workers in their departments to help each other and they can get improvements in the way the products move through their departments, the products will only "hurry up and wait" at subsequent departments.  Since other departments would continue in the same manner as before, the products will still be delivered in the same total time to the customers.  Also, since Bob's department is still being measured in efficiency, his numbers might suffer because he will be concentrating on the effective use of his people, not the traditional efficient use of his people.
You will find that unless all departments and management change their focus from productivity-only measures and include customer service measures as the most important, they will have difficulty making headway on their improvement programs for more-timely customer delivery, shorter lead times and lower inventory.  Focus on being effective, not just efficient.

Product Code:X1004
Product Condition:New
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