"Any messages?" I ask Fran.
"Yes," she answers, to my surprise. "From Bill Peach. He wants to talk to you."
I get him on the phone. "Hey Bill, what's up?"
"I just received your numbers for last month," he says. "Congratulations hotshot, you definitely made your point. I've never seen anything even remotely close to this."
"Thank you," I say pleased. "By the way, what are the results at Hilton Smyth's plant?"
"You must turn the dagger, huh?" he laughs. "As you pre- dicted, Hilton is not doing too well. His indicators continue to improve, but his bottom line continues to sink into the red."
I cannot contain myself, "I told you that those indicators are based on local optimum and that they have nothing to do with the global picture."
"I know, I know," he sighs. "As a matter of fact, I think that I knew it all along, but I guess an old mule like me needs to see the proof in black and red. Well, I think that I've finally seen it."
"It's about time," I think to myself but to the phone I say, "So what's next?"
"This is actually why I called you, Alex. I spent the entire day yesterday with Ethan Frost. It seems that he's in agreement with you, but I can't understand what he is talking about." Bill sounds quite desperate. "There was a time that I thought I understood all this mumbo jumbo of 'cost of goods sold' and variances, but after yesterday, it's obvious that I don't. I need someone who can explain it to me in straight terms, someone like you. You do un- derstand all this, don't you?"
"I think I do," I answer. "Actually it is very simple. It's all a matter of..."
"No, no," he interrupts me. "Not on the phone. Besides, you have to come here anyway-only one month left, you should get familiar with the details of your new job."
"Tomorrow morning okay?"
"No problem," he answers. "And Alex, you have to explain to me what you've done to Johnny Jons. He goes around claim-
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ing that we can make a lot of money if we sell below what it costs us to produce. That is pure baloney." I laugh, "See you tomorrow."
Bill Peach abandoning his precious indicators? This is some- thing I have to tell everyone; they'll never believe it. I go to Don- ovan's office, but he's not there, nor is Stacey. They must be on the floor. I ask Fran to locate them. In the meantime I'm going to Lou to tell him the news.
Stacey reaches me there. "Hey boss, we have some problems here. Can we come in half an hour?"
"No rush," I say. "It's not so important, take your time."
"I don't agree," she says. "I'm afraid that it is important."
"What are you talking about?"
"It probably has started," she answers. "Bob and I will be in your office in half an hour. Okay?"
"Okay," I say, quite puzzled.
"Lou, do you know what's going on?" I ask.
"No." he says. "Unless of course, you're referring to the fact that Stacey and Bob have been busy for the last week, playing expeditors."
"They are?"
"To make a long story short," Bob concludes the briefing of the last hour, "already twelve work centers are on unplanned overtime."
"The situation is out of control," Stacey continues. "Yester- day one order was not shipped on time, today three more will be delayed for sure. According to Ralph, we're going downhill from there. He claims that before the end of the month we'll miss the shipping dates on about twenty percent of our orders, and not by just one or two days."
I'm looking at my phone. It won't take more than a few days and this monster will ring off the hook with furious complaints. It's one thing to be consistently bad; the clients are used to it and they protect themselves by stocks or time buffers. But now we have spoiled them, they are already used to our good perfor- mance.
This is much worse than I've imagined. It might ruin the plant.
How did it happen? Where did I go astray?
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"How come?" I ask them.
"I told you," Bob says. "Order no. 49318 is stuck because of..."
"No Bob," Stacey stops him. "It's not the details that are important. We should look for the core problem. Alex, I think that we simply accepted more orders than we can process."
"That's obvious," I say. "But how come? I thought we checked that the bottlenecks have enough capacity. We also checked your seven other problematic work centers. Did we make a mistake in the calculations?"
"Probably," Bob answers.
"Not likely," is Stacey's response. "We checked and double checked it."
"So?"
"So, I don't know," Bob says. "But it doesn't matter. We have to do something now, and fast."
"Yes, but what?" I'm a little impatient. "As long as we don't know what caused the situation, the best we can do is to throw punches in all directions. That was our old mode of operation. I had hoped that we learned better."
I accept their lack of response as agreement and continue, "Let's call Lou and Ralph and move into the conference room. We must put our heads together to figure out what is really going on."
"Let's get the facts straight," Lou says after less than fifteen minutes. "Bob, are you convinced that you need to keep using so much overtime?"
"The efforts of the last few days have convinced me that even with overtime we are going to miss due dates," Bob answers.
"I see," Lou doesn't look too happy. "Ralph, are you con- vinced that at the end of the month, in spite of the overtime, we are going to be late on many orders?"
"If we don't find a smart way to solve this mess, without a doubt," Ralph answers confidently. "I can't tell you the dollar amount, that depends on Bob and Stacey's decisions of how much overtime to use and which orders to expedite. But it is in the neighborhood of over a million dollars."
"That's bad," Lou says. "I'll have to redo my forecast."
I throw him a murderous look. That is the major damage that he sees? Redo the forecast!
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"Can we address the real issue?" I say in a freezing voice. They all turn to me waiting.
"Listening again to what you're saying, I don't see a major problem," I say. "It is obvious that we tried to swallow more than we can chew. What we have to do is to determine by how much and then compensate. It is as simple as that."
Lou nods his head in approval. Bob, Ralph, and Stacey con- tinue to look at me with poker faces. They even look offended. There must be something wrong in what I've said, but I can't see what.
"Ralph, by how much are our bottlenecks overloaded?" I ask.
"They're not overloaded," he says flatly.
"No problem there," I conclude. "So let..."
"He didn't say that," Stacey cuts me off.
"I don't understand," I say. "If the bottlenecks are not over- loaded then..."
Maintaining an expressionless face she says, "From time to time the bottlenecks are starved. Then the work comes to them in a big wave."
"And then," Bob continues, "we don't have a choice but to go into overtime. That's the case all over the plant. It looks like the bottlenecks are moving all the time."