"Yes, you are right," I say gloomily. "Whenever the con- straint is broken it changes conditions to the extent that it is very dangerous to extrapolate from the past."
"As a matter of fact," Stacey adds, "even the things that we put in place in order to elevate the constraint must be reexam- ined."
"How can we do it?" Bob asks. "It's impossible to question everything every time."
"Something is still missing," Ralph summarizes.
Something definitely is still missing.
"Alex, it's your turn to explain," Lou says.
"Explain what?"
"Why did you claim that it's much better?"
I smile. It's about time for some good news.
"Fellows, what stopped us from once again taking another jump on the bottom line? Nothing, except for the conviction that we don't have enough capacity. Well, now we know differently. Now we know that we have a lot of spare capacity."
How much spare capacity do we actually have?
"Stacey, how much of the current load on the oven and the NCX10 is due to the fictitious orders?"
"Roughly twenty percent," she says quietly.
"Marvelous," I rub my hands together. "We have enough capacity to really take the market. I'd better drive to headquar- ters tomorrow morning and have a heart-to-heart talk with Johnny Jons. Lou, I'll definitely need you. On second thought, Ralph, will you join us? And bring your computer with you, we're going to show them something."
314
It is six o'clock in the morning when I pick up Lou and Ralph at the plant. We (I) decided that it will be best, since pick- ing them up at their houses would mean I would have had to leave home close to five. In any event, we're probably not going to spend more than a few hours at headquarters so it's reasonable to assume that we'll be back to work in the afternoon.
We hardly talk. Ralph, in the back seat, is busy with his lap- top computer. Lou probably thinks that he's still in bed. I drive on automatic pilot. That is, my mind is busy constructing imagi- nary conversations with Johnny Jons. I somehow have to con- vince him to get many more orders for our plant.
Yesterday, in the heat of discovering the amount of free ca- pacity that we have, I looked only on the bright side. Now I wonder if I'm not just asking for miracles.
I recheck the numbers in my head. In order to fill our capac- ity Johnny will have to come up with over ten million dollars of additional sales. It is totally unrealistic that he holds so much up his sleeve.
So, squeezing, begging, and pleading techniques will not help. We'll have to come up with some innovative ideas. Well, the truth is that so far I haven't been able to come up with any. Let's hope Johnny has some clever ideas; he's the one who is supposed to be the expert in sales.
"I want you to meet Dick Pashky," Johnny Jons says as we enter the small conference room. "He's one of my best people. Dedicated, professional, and above all he's full of innovative ap- proaches. I thought it would be a good idea for you to get to know him. Do you mind if he joins us?"
"On the contrary," I smile. "We need some innovative ideas. You see, what I want is for you to get my plant additional business -ten million dollars' worth."
Johnny bursts out laughing. "Jokers, all of you in production are wonderful jokers. Dick, what did I tell you? It's not easy to deal with plant managers. One is asking me to persuade his client to pay a ten percent increase in price, another wants me to get rid
315
of a pile of old junk for full price, but Alex, you're the best-ten million dollars!"
He continues to laugh, but I don't join in.
"Johnny, put on your thinking cap. You must find more or- ders for my plant, ten million dollars more."
He stops laughing and looks at me, "You are serious. Alex, what's happened to you? You know how tough it is to get more business these days; it's dog eat dog out there. Everybody is cut- ting each other's throats for the smallest order and you're talking about ten million dollars more?"
I don't hurry to respond. I lean back in my seat and look at him. Finally I say, "Listen Johnny, you know that my plant has improved. What you don't know is to what extent it's improved. We're now capable of delivering everything within two weeks. We've demonstrated that we never miss an order, not even by one day. Our quality has improved to the extent that I'm sure we're the best in the market. We are very responsive, very quick, and above all, very reliable. This is not a sales pitch, it's the truth."
"Alex, I know all this. I hear it from the best source, from my clients. But that doesn't mean that I can immediately turn it into cash. Sales take time, credibility is not built overnight, it's a grad- ual process. And by the way, you shouldn't complain; I'm bring- ing you more and more sales. Be patient and don't press for miracles."
"I have twenty percent spare capacity." I say, letting this sentence hang in the air.
From the lack of response I understand that Johnny doesn't see the relevance.
"I need twenty percent more sales," I translate for him.
"Alex, orders are not apples hanging from trees. I can't just go out and pick some for you."
"There must be orders that you decline, because the quality requirement is too high or because the client is asking for unrea- sonably short delivery times or something. Get me those orders."
"You probably don't know how bad the economy is," he sighs. "Today I accept any order, anything that moves. I know that a lot of dancing will be required later, but the current pres- sure is simply too high."
"If the competition is so fierce and the economy is so bad,"
316
Lou says in his quiet voice, "then it must be that clients are press- ing for lower prices."
"Pressing is not the word. Squeezing is much more appropri- ate. Can you imagine, and this is just between us, in some cases I'm forced to accept business for practically zero margin."
I start to see the light at the end of the tunnel.
"Johnny, do they sometimes demand prices that are lower than our cost?"
"Sometimes? All the time."
"And what do you do?" I continue.
"What can I do?" he laughs. "I try to explain the best I can. Sometimes it even works."
I swallow hard and say, "I'm ready to accept orders for ten percent below cost."
Johnny doesn't hurry to answer. His peoples' bonuses are based on total sales dollars. Finally he says, "Forget it."
"Why?"
He doesn't answer. I persist, "Why should I forget it?"
"Because it's stupid, because it doesn't make any business sense," he says in a hard voice, and then softer, "Alex, I don't know what tricks you have in mind but let me tell you, all those tricks have a very short life span before they explode in your face. Why do you want to ruin a promising career? You've done an outstanding job, why go and mess it up? Besides, if we lower prices for one client, it's just a matter of time until the others find out and demand the same. What then?"
He has a point. The last argument shows that the light at the end of the tunnel was just a train.
Help comes from an unexpected side.
"Djangler is not connected to our regular customers," Dick says hesitantly. "Besides, with the quantities he's asking for, we can always claim we gave him a volume discount."