Lou gives up.
"I can't help you there," he says. "I don't have anything on inventories by part number."
"Okay, let's get Stacey in on this."
Stacey Potazenik manages inventory control for the plant. Lou makes a call and pulls her out of another meeting.
Stacey is a woman in her early 40's. She's tall, thin, and brisk in her manner. Her hair is black with strands of gray and she wears big, round glasses. She is always dressed in jackets and skirts; never have I seen her in a blouse with any kind of lace, ribbon or frill. I know almost nothing about her personal life. She wears a ring, but she's never mentioned a husband. She rarely mentions anything about her life outside the plant. I do know she works hard.
When she comes in to see us, I ask her about work-in-process on those parts passing through the robot areas.
"Do you want exact numbers?" she asks.
"No, we just need to know the trends," I say.
"Well, I can tell you without looking that inventories went up on those parts," Stacey says.
"Recently?"
"No, it's been happening since late last summer, around the
75
end of the third quarter," she says . "And you can't blame me for it-even though everyone always does-because I fought it every step of the way."
"What do you mean?"
"You remember, don't you? Or maybe you weren't here then. But when the reports came in, we found the robots in weld- ing were only running at something like thirty percent efficiency. And the other robots weren't much better. Nobody would stand for that."
I look over at Lou.
"We had to do something," he says. "Frost would have had my head if I hadn't spoken up. Those things were brand new and very expensive. They'd never pay for themselves in the projected time if we kept them at thirty percent."
"Okay, hold on a minute," I tell him. I turn back to Stacey. "What did you do then?"
She says, "What could I do? I had to release more materials to the floor in all the areas feeding the robots. Giving the robots more to produce increased their efficiencies. But ever since then, we've been ending each month with a surplus of those parts."
"But the important thing was that efficiencies did go up," says Lou, trying to add a bright note. "Nobody can find fault with us on that."
"I'm not sure of that at all any more," I say. "Stacey, why are we getting that surplus? How come we aren't consuming those parts?"
"Well, in a lot of cases, we don't have any orders to fill at present which would call for those parts," she says. "And in the cases where we do have orders, we just can't seem to get enough of the other parts we need."
"How come?"
"You'd have to ask Bob Donovan about that," Stacey says.
"Lou, let's have Bob paged," I say.
Bob comes into the office with a smear of grease on his white shirt over the bulge of his beer gut, and he's talking nonstop about what's going on with the breakdown of the automatic test- ing machines.
"Bob," I tell him, "forget about that for now."
"Something else wrong?" he asks.
76
"Yes, there is. We've just been talking about our local celebri- ties, the robots," I say.
Bob glances from side to side, wondering, I suppose, what we've been saying.
"What are you worried about them for?" he asks. "The ro- bots work pretty good now."
"We're not so sure about that," I say. "Stacey tells me we've got an excess of parts built by the robots. But in some instances we can't get enough of certain other parts to assemble and ship our orders."
Bob says, "It isn't that we can't get enough parts-it's more that we can't seem to get them when we need them. That's true even with a lot of the robot parts. We'll have a pile of something like, say, a CD-50 sit around for months waiting for control boxes. Then we'll get the control boxes, but we won't have something else. Finally we get the something else, and we build the order and ship it. Next thing you know, you're looking around for a CD-50 and you can't find any. We'll have tons of CD-45's and 80's, but no 50's. So we wait. And by the time we get the 50's again, all the control boxes are gone."
"And so on, and so on, and so on," says Stacey.
"But, Stacey, you said the robots were producing a lot of parts for which we don't have product orders," I say. "That means we're producing parts we don't need."
"Everybody tells me we'll use them eventually," she says. Then she adds, "Look, it's the same game everybody plays. Whenever efficiencies take a drop, everybody draws against the future forecast to keep busy. We build inventory. If the forecast doesn't hold up, there's hell to pay. Well, that's what's happening now. We've been building inventory for the better part of a year, and the market hasn't helped us one damn bit."
"I know, Stacey, I know," I tell her. "And I'm not blaming you or anybody. I'm just trying to figure this out."
Restless, I get up and pace.
I say, "So the bottom line is this: to give the robots more to do, we released more materials."
"Which, in turn, increased inventories," says Stacey.
"Which has increased our costs," I add.
"But the cost of those parts went down," says Lou.
"Did it?" I ask. "What about the added carrying cost of in-
77
ventory? That's operational expense. And if that went up, how could the cost of parts go down?"
"Look, it depends on volume," says Lou.
"Exactly," I say. "Sales volume... that's what matters. And when we've got parts that can't be assembled into a product and sold because we don't have the other components, or because we don't have the orders, then we're increasing our costs."
"Al," says Bob, "are you trying to tell us we got screwed by the robots?"
I sit down again.
"We haven't been managing according to the goal," I mut- ter.
Lou squints. "The goal? You mean our objectives for the month?"
I look around at them.
"I think I need to explain a few things."
An hour and a half later, I've gone over it all with them. We're in the conference room, which I've commandeered be- cause it has a whiteboard. On that whiteboard, I've drawn a dia- gram of the goal. Just now I've written out the definitions of the three measurements.
All of them are quiet. Finally, Lou speaks up and says, "Where the heck did you get these definitions anyway?"
"My old physics teacher gave them to me."
"Who?" asks Bob.
"Your old physics teacher?" asks Lou.
"Yeah," I say defensively. "What about it?"
"So what's his name?" asks Bob.
"Or what's 'her' name," says Stacey.
"His name is Jonah. He's from Israel."
Bob says, "Well, what I want to know is, how come in throughput he says 'sales'? We're manufacturing. We've got noth- ing to do with sales; that's marketing."
I shrug. After all, I asked the same question over the phone. Jonah said the definitions were precise, but I don't know how to answer Bob. I turn toward the window. Then I see what I should have remembered.