Patty was staring out the window of her new office. She had just been made manager of a new department responsible for corporate wide productivity and advanced processes. At 25 years old, she was the youngest manager at ACME by six years. She was surprised that Pete was one of the folks in the new department and was concerned that Pete might have trouble accepting her as his boss.
When Patty mentioned her concern, Pete replied, “Hey ‘kid,’ are you joking? I’m thrilled to be in your department. Not only is the work the most interesting, but you are one of the few managers that really knows what they’re doing.”
Considering that Pete was Patty’s father’s age, this vote of confidence meant a lot.
The view out of her office window was terrific. She could see some of the local hills in Southern New Hampshire and the fall color change was striking. A few coworkers claimed that on a clear day you could just see the top of Mount Monadnock. Patty had made some calculations using the position of her office, the distance and height of the local hills and had proven to herself that “the most-climbed mountain in the US” was 100 meters to short to be seen from her window. But the sky was so clear she couldn’t help by strain her eyes to see it she could get a glimpse of that majestic beak. Her pleasant interlude was jarred by the rude, demanding ringing of her office phone.
“Advanced Processes, Patty speaking,” she cheerfully spoke into the phone.
“Patty, it’s Sam. Can you come to my office now?” the voice on the other end spoke to her.
It was Sam Watkins, the site GM, and his call now did not make her nervous. Ever since the first visit of The Professor, Sam had treated her like a valued member of the team. It was his suggestion to launch a corporate center of competence for productivity and advanced processes and name Patty the manager. When he gave her the job, he said that a lot of the work would be corporate troubleshooting. She expected that Sam’s call related to this topic.
When she entered his office, Sam got right to the point. “Patty, there’s a crisis in our plant in Columbia, SC. A new COO took over four months ago and went on a cost-cutting spree. Since then, the plant’s profit is down 8%. We can’t figure out why. Go there and find out what’s going on. And develop a plan to fix it,” he ordered.
Patty excitedly returned to her office. She called Pete in and they discussed plans for their trip. Patty was trying to limit her use of The Professor, but this assignment seemed to beg for his participation. His uptime improvement recommendations so impressed management, he was now on a permanent consulting retainer.
As Sam said, “Every time The Professor visits one of our facilities, they make several more million dollars a year. I wish he lived here!”
Patty made a call to The Professor and to her surprise he was available. They agreed to meet at the Columbia airport at noon in two days.
The time passed quickly and before she knew it she was in a rental car driving to the ACME facility in Columbia. Their first meeting was with the assembly process engineering team and the new COO. After introductions, the COO, Fred Perkins, spoke.
“I really don’t know why you are here,” he commented brusquely. “Profits are only down 5%; it’s probably just a random fluctuation. I came here with a mandate to cut costs and dammit I did. I couldn’t believe what we were paying for solder paste, and I found a vendor that would charge 25% less. This was the first cost savings I implemented. Solder paste is solder paste. It’s just like butter. When I was COO of American Foods, they were paying too much for butter, and I found a vendor that would charge 9% less. Butter is butter, solder paste is solder paste,” he concluded.
“How much money will you save on paste this year,” Patty inquired.
“For all of our five lines, $100,000,” Fred proudly answered.
“How much profit do your lines produce per year?” The Professor asked.
“We have five, 20 -2 lines,” replied Jane Wilson, the site CFO.
“What’s a 20-2 line? “ asked Patty.
“Oh, sorry. It’s a term we use to here to describe line financial metrics. The ’20’ stands for $20 million in sales and the ‘2’ stands for $2 million in profit.” Jane responded.
“Thanks,” said Patty.
“Oh, but I guess we would have to call them 18.4 -1.84 lines now that the productivity and profit are down by 8%.” Jane sarcastically said as she glared at Fred.
At this comment, Fred lost his cool, he slammed his fist on the table and shouted at Jane. “It isn’t 8%, its only 5% and I told you it’s just a random fluctuation,” he fumed.
Is the lost profit just a random fluctuation? If not, what is the cause? And how are Patty and Rob doing?
Stayed tuned for the latest.
