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Featured Story 5: Matching Tactics to the Strategy
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Featured Story 5: Matching Tactics to the Strategy

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


 THE STORY:  Jeff was on his way to a special meeting with the president of the company and the engineering staff.  Jeff had just started working for Big Bent Metal Inc., a major supplier of automotive parts to the big three.  He was hired to implement cell technology in a new product line of gas tank enclosures.  The plan was to design a machine that would create a wrap out of prepainted material, eliminating the need for punching out four walls in the press department.  This wrap would also eliminate the need for welding and would only require folding the two ends together.  Bypassing the paint line would reduce more time and money from the process and still provide a quality product.
Jeff was sure the meeting was about some new product or something.  Within the first few minutes everyone received a real eye opener.  "Do you know our mission statement?" the president asked the group.  Someone said providing a quality product, another said the lowest cost product and another customer service.  The president then stated "WE WILL DELIVER THE HIGHEST QUALITY PRODUCT AT THE LOWEST COST, DELIVER ON TIME AND SERVE THE MARKET WITH NEW PRODUCTS ON A TIMELY BASIS."  "We are about to be dumped by our largest customer because even though we have been telling them that we are working on it, it is just not good enough anymore."
The meeting ended just as fast as it started.  Jeff was shocked.  He thought he joined one of the best automotive suppliers in America.  All the information he had ever read about the company said so.  With all the new technology he was responsible for implementing, it was only a matter of time before everything got turned around.  He saw his boss Mike in the corner with the president and it didn't seem to be going to well.  As Jeff started back to his office he heard his name called out. It was Mike.  He asked Jeff if he really felt that the project he was working on would address the mission statement the customers were counting on.  "Sure," said Jeff, "quality will improve because we won't be using the paint line."  "But the President asked why the prepainted material won't get scratches," said Mike.  "We took care of that by having someone nesting the part correctly.  It well require more boxes to be moved than we do today, but the work will move faster, giving us shorter lead times at a reduced price," responded Jeff.  "Ok Jeff, just checking," said Mike.  Jeff went for a cup of coffee rethinking his logic.  "Will the new technology really do what everyone said it would?"

 

DISCUSSION:  Jeff and all of the other people at Big Bent knew the mission statement.  When a customer called and asked them if they could hurry up an order, didn't they do it?  When customers changed their mind at the last minute, weren't they accommodated?  Isn't that customer satisfaction?
The sad truth of the matter is that reacting to customer changes and demands is not customer satisfaction.  It is really changing from what you thought the customer wanted to doing what he really wants.  We want to run a customer's order our way to meet our measures, not the way the customer wanted it.  That is why the changes occur that need to be reacted to.
The mission statement hanging in virtually all manufacturing company lobbies these days is a strategy based on customer satisfaction.  Companies have not traditionally been run on such a strategy though.  They have been run on a production-oriented strategy where the major focus has been on improving productivity and reducing costs.  This can easily be seen by the measures (tactics) they have in place like earned hours, labor and material variance reports, absorption, etc.  Since all of the tactics used to run the plant are based on a production strategy, just stating that you are now focused on customer satisfaction does not mean it is so.  A fundamental change in the tactics of running the plant from day to day must occur to support this change in strategy.
 
THOUGHT:  Jeff would later come to realize that to get the return on the cell investment he would have to do long manufacturing runs.  This would result in finished goods inventories and a long time between runs of different stock keeping units.  Lead times would probably be the same as before the project even though the manufacturing cycle time would be shorter.  Quality would improve with the new project, but the quality could have been improved if the root cause (the nesting issue) in painting was addressed separately. 
Welding would be reduced, but the expense of the new wrap press really wouldn't offset the labor savings.  The press would be freed up, but the run time will just turn into more work in process.  Therefore, what Jeff realized was that the improvements from the project were being measured in terms of productivity and cost reduction with lip service being paid to customer satisfaction.  If customer satisfaction were the driving force, changes would be made by rolling up the sleeves and addressing the root cause of the problems.  This will usually result in improved quality, reduced lead times and lower costs without additional investment.  Try to do your job better with the tools you have.
 

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