Change has sprouted
I knew nothing about manufacturing or business when I came to Acme, so I heave learned all my notions of the proper way to do things from influences within the company. Any time I point out something that is not being done the right way, there is a discrepancy between theory and practice in Acme.
Now the plant manager is pushing to close that gap. One of the nice theories that we recently finished detailing says that Acme should keep no finished product on hand except those with an overall steady, high demand. Keeping these tools in stock will allow same-day shipment of orders, even large orders. All other product should be built to order, which will result in a longer lead time.
Half of this theory went into practice without a hitch. Suddenly we had piles of our high-volume product sitting in shipping, where there was no room for them because we still had plenty-plenty of our other products in the same space. The strategy and geography of storing product in shipping has been woefully confused for as long as I’ve known it, and plans have been in the works to make improvements. Then one day the plant manager came out to shipping and jostled the cart when he told P. B., the shipping manager, to include space in his plans for only the high-volume products.
This is radical. From a traditional perspective, this is the tail wagging the dog. An enlightened customer perspective may see nothing out of place in the last function of the factory dictating what it will allow the production area of the factory to produce, but it is heterodoxy to the old school. Production and planning build product based on component availability. There may be orders for product A and no order for product B; but if you have no components for A and you do have components for B, than you obviously should build B now while you can so that you do not wind up with orders for A and B at the same time and not enough capacity to build both at once.
This makes a certain amount of sense, and if you offered only products A and B it might even work. But when you have a huge range of products for sale, building in hope of future orders means that you use up in B components that you could have put in orders for C, while hogging machine capacity that could have been used to produce parts for sold product for Line 3 — but that is not your production line or your responsibility, so (to be polite) you don’t care about them.
After all, your first priority is to build a number of units equal to or greater than your “takt” number, the number you are supposed to build each day in order to meet the goal number for the month. This goal is determined at the beginning of the month and is projected. Whatever customer orders are on the books are taken into account, of course, but a large percentage of the orders that will be due in the month are placed near the end of the month, when marketing starts offering sweeter promos so they can make their monthly goal.
Note that the takt number is in units, not specific model numbers, so that building 5 of tool B is measured equivalent to building 5 of tool A.
Many people, including my replacment as the Lean department’s errand boy, seem to think that level-loaded production (or “building to takt”) is a tool of Lean production. It is not. It is a crutch for Lean production. True takt is customer demand divided by available time, which is a Lean tool, but in our implementation takt is projected demand divided by available time. It is a device to spread the work out so you are not building 500 units today and 2 tomorrow. Ideally, though, your production would be capable of doing just that–producing however many the customer wanted at a given moment in time, and not a single unit more. Monthly takt based on a projection of customer orders is a concession physical realities.
Since takt is meant to be customer demand divided by units of time (one day, at Acme), a measurement called Daily Schedule Adherence keeps track of how close to takt production actually ran. Build too few, DSA goes down; build too many, DSA goes down. When takt is based on a projection, DSA is close to useless, but you can make it even more irrelevant if you measure the daily adherence to what the planners said they could accomplish at the beginning of the day.
I said I could build 2. I built 2. My DSA is 100%. The customers wanted 300; who cares? I measured well.
I said I could build 700. I built 700. There are only orders for 20. Who cares? I measured well.
Evidently, this is at least the perception of DSA that our planning and production department has had. The plant manager asked my former boss, the Lean leader, to straighten everyone out, and now the factory is filled with furious faces, bitter words, and sometimes loud arguments. What? DSA is to be measured against takt? But I can’t build that many tools–I don’t have the parts!
But it is not about what the planners are able to do, or what production is able to do, or what parts are in stock. It is about what the customer who pays money wants to get. If we cannot meet that demand, let the record show that we cannot. A failure should show as a failure, not as succesfully meeting our goal to deliver what nobody wanted.
On top of that, the management has also had the gall to say that production cannot have more parts if the computer system shows that they have more than enough already. It is recognized by all that the computer system will frequently be wrong, but one camp says that is the way it works and the other camp says that needs to be fixed. Well, it is harder to fix than one would think–but that is another long story. I hate our computer system.
All together, these changes make life very difficult for a section of the workforce at Acme, and our part in shipping has not yet come into play. Once we have our area overhauled, we are to refuse tools for which there are no orders. We are to send them back to assembly to be torn down into components and restocked.
Yes, change has sprouted at Acme, but it remains to be seen if it can grow in such unfriendly conditions. I think there are planners here who will either have aneurysms or quit.