VELOCITY - DEE JACOB [135]
“Hmm, yes. Yes, I do see it now,” he mumbled.
“Oh, and look at Oakton’s operating expenses,” Amy continued. “Overtime has come down, because we’re expediting less. Shipping costs, too, are less – because we’re not having to pay for hugely expensive overnight shipping to make up for production delays.”
“But then how do you explain the precipitous drop in resource utilization?” asked Nigel.
“Resource utilization is looking at each and every individual workstation in the plant, not at the production system as a whole. You see, what we’ve done, in effect, is we’ve added what we call ‘protective capacity.’ And we’ve done that in a couple of ways. One is that the release of materials into production is such that every resource is not being used to the max, but only to the extent that the system can utilize what is produced. And we are no longer working to takt time. We have reconfigured to achieve the fastest flow through the nonconstraints, which means that not everyone will be working to the max all the time.”
“The nonconstraints?”
“Yes.”
Nigel sighed and complained, “You’re confusing me.”
“I’m sorry, it is somewhat counterintuitive. Let me try again. You see, going for the fastest flow means that once a workstation has finished its processing, and passed on its WIP to the next station, there may often be a brief idle period, because more materials have not yet been gated in. That’s going to cause the utilization metric to fall.”
“Well, why wouldn’t you want all equipment and workers to be busy all the time? It just doesn’t make sense!”
“Sir, it does makes sense. You want the speed to the system constraint to be fast so that Godzilla never starves. And after Godzilla you also want speed so that you don’t miss your shipping window.”
“What?! Godzilla? Starving? What are you talking about?”
“Mr. Furst, please, never mind. It’s technical,” said Amy. “Just look at the bottom line. Look at Hi-T’s operating income. It’s turned! It’s on the increase – and that growth will continue. Right now we’re in the middle of the quarter and it doesn’t look like much, but as it goes on our operating profits will accumulate.”
Forty-five minutes later, and after reaching Peter Winn on his yacht in Rio de Janeiro harbor so that she could explain the bottom line improvement to him, Amy had defused the crisis.
But the experience had unnerved her. She was immediately connecting by phone and email. There was a scheduled meeting of what Amy was now calling the Velocity team, but she moved it up by a week. What if the corner had not yet been turned? She needed assurance that the turnaround plan was really working, that everything that could be done was in fact being done.
The portable conference room from the Hi-T trade show display had by now been erected on the plant floor near Godzilla – and had become quite a conversation piece among the employees with its carpeting, fabric-covered walls, plush chairs, and its huge and beautiful high-strength light-weight carbon-fiber conference table that could be easily lifted by two people yet could withstand a direct hit by an artillery shell. The inevitable joke that followed, delivered ad nauseam at trade shows, was that those around the table might not be so lucky.
Gathered around that high-tech table forty-eight hours after Nigel’s call were the members of the Velocity Team: Elaine, Wayne, Sarah, Murphy, Garth, and Amy herself. Outside the windows was a splendid view of Godzilla.
“When one’s head is on the chopping block, it can be a little unsettling,” Amy said, having described her conversations with Nigel and Peter. “Therefore, that’s why I moved up our meeting. I really need to know, first of all, if everyone is completely confident