"... Let me say in conclusion that had it not been for the in- crease in revenue generated last month by the Bearington plant and its products, the UniWare Division's losses would have con- tinued for the seventh consecutive month. All of the other manu- facturing operations in the division reported only marginal gains in performance or sustained losses. Despite the improvement at Bearington and the fact that as a result the division recorded its first operating profit of this year, we have a long way to go before we are back on solid financial footing."
Having said that, Ethan Frost gets the nod from Bill Peach and sits down. I'm sitting halfway down a long table where all the plant managers are gathered. On Peach's right is Hilton Smyth, who happens to be glowering at me in the aftermath of Frost's tribute to my plant. I relax in my chair and for a moment allow myself to contemplate the view through the broad plateglass win- dow, a sunny city on an early summer day.
May has ended. Aside from the problem with the shortages of non-bottleneck parts, which have now gone away, it's been an excellent month. We're now timing the release of all materials according to a new system Ralph Nakamura developed, which is keyed to the speed of the bottlenecks. He's got a data terminal now at both of the bottlenecks, so as inventory is processed, the latest information can be fed directly into the plant data base. With the new system we're beginning to see excellent results.
Ralph did a little experimenting with the system and soon discovered we can predict within a day, more or less, when a shipment will leave the plant. Based on this, we've been able to put together a report to marketing listing all customer orders and dates when they will be shipped. (I don't know if anybody in marketing really believes that report, but so far it's been highly accurate.)
"Rogo," says Peach, "because you seem to be the only one among us who has improved to any degree, we'll let you start the round of reports."
I open up the cover of my report and launch into a presenta- tion of the highlights. By almost every standard, we've had a
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good month. Inventory levels have fallen and are continuing to fall rapidly. Withholding some materials has meant we're no longer choking on work-in-process. Parts are reaching the bottle- necks when they're supposed to, and the flow through the plant is much smoother than before.
And what happened to efficiencies? Well, they did fall ini- tially as we began to withhold raw material from the floor, but not as much as we had been afraid they would-it turns out we were consuming excess inventory. But with the rate of shipments up dramatically, that excess has melted quickly. And now that we're beginning to resume releases of materials to non-bottlenecks again, efficiencies are on their way back up. Donovan has even told me confidentially he thinks the real numbers in the future will be almost the same as before.
The best news is we've wiped out our backlog of overdue orders. Amazing as it seems, we're completely caught up. So cus- tomer service has improved. Throughput is up. We're on our way back. It's too bad the standard report we've prepared can't begin to tell the full story of what's really going on.
When I've finished, I look up the table and see Hilton Smyth whispering something to Bill Peach. There is quiet around the table for a moment. Then Bill nods to Hilton and talks to me.
"Good job, Al," Bill says stiffly.
Through with me, Bill asks another manager to deliver his report. I sit back, irritated slightly that Peach wasn't more posi- tive, that he didn't put more praise on me the way Frost had indicated he should. I came in here feeling as though we'd really turned the plant around. And I guess I expected a little more than a "good job," a pat on the head.
But then I have to remind myself that Peach doesn't know the extent of the change. Should he know? Should we be telling him? Lou has asked me about this. And I've told him, no; let's hold off for a while.
We could go to Bill Peach and make a presentation to him, put all our cards on the table and let him decide. In fact, that's exactly what we will do eventually. But not yet. And I think I have a good reason.
I've worked with Bill Peach for a lot of years; I know him pretty well. He's a smart man-but he is not an innovator. A couple of years ago, he might have let us run with this for a while. Not today. I have a feeling if we go to him now, he'll put on his
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hard nose and tell me to run the plant by the cost accounting methods he believes in.
I have to bide my time until I can go to him with a solid case that my way (Jonah's way, really) is the one that truly works. It's too early for that. We've broken too many rules to tell him the full story now.
But will we have the time? That's what I keep asking myself. Peach hasn't voluntarily lifted the threat to close the plant. I thought he might say something (publicly or privately) after this report, but he hasn't. I look at him at the end of the table. He seems distracted, not like himself. The others talk and he seems only half interested. Hilton seems to cue him on what to say. What's with him?
The meeting breaks up about an hour after lunch, and by then I've decided to have a private talk with Peach if I can get it. I follow him out into the corridor from the conference room and ask him. He invites me into his office.
"So when are you going to let us off the hook?" I ask him after the door is closed.
Bill sits down in a big upholstered chair and I take the one opposite him. Without the desk between us, it's a nice little inti- mate chat.
Bill looks straight at me and says, "What makes you think I'm going to?"
"Bearington is on its way back," I tell him. "We can make that plant make money for the division."
"Can you?" he asks. "Look, Al, you've had a good month. That's a step in the right direction. But can you give us a second good month? And a third and fourth? That's what I'm waiting to see."
"We'll give them to you," I say to him.
"I'm going to be frank," says Peach. "I'm not yet convinced this hasn't been just a flash in the pan, so to speak. You had a huge overdue backlog. It was inevitable you'd ship it eventually. What have you done to reduce costs? Nothing that I can see. It's going to take a ten or fifteen percent reduction in operating ex- pense to make the plant profitable for the long term."
I feel my heart sink. Finally, I say, "Bill, if next month we turn in another improvement, will you at least delay the recom- mendation to close the plant?"
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He shakes his head. "It'll have to be a bigger improvement than what you gave us in this past period."
"How big?"
"Just give me fifteen percent more on the bottom line than you did this month," he says.
I nod. "I think we can do that," I say-and note the split second of shock blink into Peach's face.
Then he says, "Fine. If you can deliver that, and keep deliv- ering it, we'll keep Bearington open."
I smile. If I do this for you, I'm thinking, you'd be an idiot to close us.
Peach stands, our chat concluded.
I fly the Mazda up the entrance ramp to the Interstate with the accelerator floored and the radio turned up loud. The adren- alin is pumping. The thoughts in my head are racing faster than the car.
Two months ago I figured I might be sending out my resume by now. But Peach just said if we turned in another good month he'd let the plant stay open. We're almost there. We just might be able to pull this off. Just one more month.