After delivering bad new, I usually grin. Unless I feel personally affected by the events.

This week in the daily meeting, M.B. the production manager gave us the sketchy details of the recent visit by the Scary One (the member of senior management most prone to asking for what we are not ready to deliver). The Scary One had two main points:

1. We spend too much time analyzing problems that we should be simply attempting to fix.
2. We need to complete our visual management system.

On the first point, I agree. To my mind, analysis is a tool for when you no longer have a very clear idea of what is causing your problem. When you have a pretty good idea, take action without waiting for the nitty-gritty. Your solution may be wrong, may even be significantly wrong because of a critical overlooked detail, but it is likely to at least be an improvement, and to be more educational in practice than most analyses are in theory.

As for the second point–well, the greater Acme corporation has comitted itself to a system of communications boards whose design I think is seriously flawed. They communicate a lot of information that the nominal beneficiaries of the boards do not understand or directly influence, thus jeopardizing the communicative function of the boards. But the standard has been agreed upon and committed to by the corporation. In situations where you clearly have to do something ill-advised or unpleasant, it is best to just do it quickly and get it over with. And we haven’t.

After being told about how the Scary One wanted to see those boards in place in short order, one of the planners–one who is admired for his intelligence and not just tolerated for his seniority–began to opine, loudly, insistently, and with some earthy adjectives, on the worthlessness of these boards. His immediate supervisor was in the room, but the two members of the plant staff to whom he is most responsible were present. After initially attempting to interject responses to the planner’s criticisms, the two waited silenty for him to finish his tirade. When he was done, the meeting adjourned.

Within days another planner, who is not respected by anyone, spoke even more disrespectfully in direct reply to his superior.

Nothing that I know of was done in response to either outburst. Something may have been said or done behind closed doors, but I would think that for public rebellion some public punishment ought to follow. Not necessarily what my former boss suggested, immediately escorting the man out of the building and possibly not letting him come back, as that could have blowback. You need employees who will strive to implement management decisions, not deride them publically, but if you don’t want a bunch of empty sycophants, you must also allow some evident disagreement. But the disagreement should be expressed reasonably, respectfully, and with the right audience.

Suspension or firing may be in order. If I were to suspend someone for that, I would want to state clearly to the same audience that witnessed the outburst that nobody would be suspended for criticizing the management policy in my office behind a closed door. I would remind them that they are employed to execute the strategies of the management as well as they possibly can, not to complain about how those strategies can’t possibly work.

I am not very fond of these boards and I can’t blame anyone else who also thinks they are useless. But the decision to use those boards did not come from the managers on the site. It is not their choice; their job is to execute the decision of upper management. They cannot be subjected to abuse for doing their job if it is legal and ethical, and certainly the case in question meets those requirements.

When it comes to ethics, though, I think poorly of my own response to such outbursts, which was to immediately tell people I work with what happened. Did you hear what he said?

It was a public meeting. While those I told were not at the meeting, they had the right to attend. In a strict sense, I did nothing wrong to repeat what was openly said. But there is no glory in revealing the sins of others. I tried to justify myself by saying that this was a major event in plant politics and could have reverberations that would affect so-and-so and it would add so much more clarity to their lives if they knew what was behind it all… but clearly, that is an artificial excuse.

The next week is shaping up to be not much fun. It is the end of a quarter, which raises the stakes, and the end of a bad month that saw a particularly widespread quality issue, and it ends on Sunday. So Saturday and Sunday are both work days, and then at the beginning of the next month all hands are required for the annual plant-wide inventory.

However, because the Scary One, um, scared everyone, certain staff members are frantic to make changes–and not to bother worry too much if the are even at first glance reasonable or reasonably executed, because after all we have been spending too much time analyzing. So my supervisor, the stockroom manager’s supervisor, he decided to start relocating some inventory in this week right before inventory. The timing seems spectacularly bad and this kind of urgency bodes ill for the entire month of October.

So, when I wondered several posts ago if P.B. would keep up the good fight, the answer at this time is it really doesn’t matter. I went with him to his latest performance review, and it turned out not to be a review of his performace so much as an opportunity for other staff members to argue amongst themselves about how best make these hasty changes in P.B.’s area. The man himself, the nominal supervisor of the area, kept his mouth shut, since he had nothing to gain by opening it.

This week at Acme I totally neglected the program to reduce shipping errors. I didn’t have any time for it. I was busy doing nothing.

Through no fault of my own, I got conscripted into a project to do nothing. The goal of the project was to see what kind of information transactions occurred during the entire process of a customer placing an order and receiving the goods and the accounts being balanced–within one particular sales/production model that Acme uses. There was no particular driving concern or goal. It was just data-gathering.

In my experience and training (which is limited), an exercise with no goal accomplishes nothing. Theoretically, this exericise identified some ways we can improve our process. Realistically, we were already aware of the opportunities to get better. So actually, the whole point of us in our plant participating in this exercise was so that we could be seen by the very top level of the company as participants.

Our site was an especially pointless location for a pointless exercise, because we perform no direct customer service functions. We do not take orders or bill customers or do anything other than react to the orders that have been placed on our site by the customer service center, or respond to complaints about orders that have been referred to us by the customer service center. I was not the only one to note that we seemed to have the wrong people and the wrong place to accomplish the stated goals, such as they were.

However, one of precepts of the Intra-Company Code of Conduct kicked in. The Code appears below:

1. I have never seen a problem that we are not in the middle of solving or are about to solve.
2. This was a productive meeting and all participants made an important contribution.
3. I believe and fully trust that all resources I need to overcome the identified obstacles will be made available to me.
4. Everyone is doing a good job and we are on the verge of revolutionary success.

Needless to say, the two-day project was a smashing success.

With Labor Day off, and a half-day wrap-up on Friday, only Tuesday was available for me to do anything. Most of Tuesday was spent doing yet another inventory count at the express request of Accounting, so they could at last reconcile the differences between what we think we have and what we actually have. I happened to talk to the responsible party in Accounting during the week, and now that we have done our third count of the inventory without actually making adjustments, he is planning to just wait another month for the plant-wide inventory. Never mind that he knew full well about the plant wide inventory before expressly asking us to conduct this one. (A thought of actual physical violence went through the back of my mind.)

But let me get back to the theme of the post, and the last precept of the Code of Intra-Company Conduct. I have observed two supervisors–both of whom I respect in at least some degree (these are the skunks of Acme)–who address their employees by telling them that they are doing a fantastic job, they are working hard, and that on the whole they are more successful than anyone in their role ever has been before. This when I know both of them to say, semi-privately, that there are too many people who are doing things quite wrong, and are lazy, and are performing worse in at least one crucial way than we have been recently.

Are they lying? I began by thinking they certainly were. But I turn it around in my mind. If my supervisor, or my supervisor’s supervisor, got up in front of us and said that we were goofing off when we should be working, we were doing important parts of our job wrong, and he was getting pretty severly irritated, I would not respond with affection and increased effort. Even if I were goofing off some of the time and knew it and would admit it, still his blatant disregard for the amount of work I did get done in spite of all the obstacles would make me mad, resentful, and obstinate.

Maybe I am the real liar. When I got a break from the project to accomplish nothing, I ran back to my office and told everybody what a stupid waste of time it was. When the break was over, I ran back to the meeting room and particpated with gusto and smiled and shook hands and agreed that we had attained some important new knowledge as a result of this analysis.

I suppose the idea the managers have is not so much to just misrepresent things in the best light possible, but to say something that will encourage the employees to do better, rather than justifying them in doing worse. Often in these manager pep talks a few things will be noted as somehow, stupefyingly getting worse, despite our valiant efforts; and even perhaps just one point on which we flat out must improve. Maybe this is about all the rebuke the human physce can withstand, and still be cooperative. Granted the positive-negative ratio is typically reversed in military training, recruits can’t unionize or strike or leave for a better job. It makes a difference.

But I wonder how often I have been “spun” by my direct superior, who perhaps thinks I am a pain, or a little dense, or chasing my tail, but tells me that I am doing marvelous things and, while still not perfect, am on track to be sainted before my own demise.

One of the problems I have with leadership, or whatever limited responsibility has come my way, is that I can clearly and passionately see the merit in everyone’s objections to whatever it is I want to do. In the moment, I can usually more empathize with my opponent’s position than my own.

This is a serious disability. But as I observe the successful people around me, it seems that practically the only way they are different than me is their ability to maintain their own idea of what is going while appearing to go along with whatever is being said around them. Obviously they are not mavericks doing whatever they please. Their own charted course must include pleasing their boss. But they are not very upset by, or empathetic with, any objections to their chosen course. They can listen, nod, and say, “You’re right, I completely agree,” and then slip in one very subtle caveat that sounds utterly harmless, like, “we’ll do what you said, just like our customer wants,” and that little caveat actually means “You’re ignoring the obvious fact that we are going to do things my way.”

Is this sleight-of-hand leadership?

I think it is always a part of social leadership. I think, too, that those who try to “lead” with nothing more than this slight-of-hand accomplish little or nothing. I think one of Acme’s problem is that the managers generally aren’t identifying those few, critical obstructions to their goals and eliminating them with overwhelming force. Some people need to be fired. Some people need to be called into the office for a frank explanation of where things stand.

I seem to have survived another end of month. Month ending is alway a busy time because we try to ship as much as possible so that our monthly financial statement looks as good as possible. This practice is deeply engrained in Acme, deeply enough so that all our suppliers realize that we don’t really insist upon having product until the end of the month. Thus there is always a spike in production at the end of the month, as material from languid supplies finally makes it to the factory and into tools.

One of the unpleasant aspects of our inventory management system is that it routinely allocates finished product to orders that cannot ship. There are a number of reasons why an order may not be shippable, but if we generalize and describe all such orders as “on hold,” it will suffice for this discussion. An order may be on hold for reasons the customer is responsible to resolve or for issues with the order internal to Acme. In the latter case, it is evident that inventory should allocate to the order and wait there until Acme figures out its business. In cases where the customer is responsible, however, it would seem that at some point the order should lose its place in line and give all the inventory over to a shippable order. Such is not the case, though, and we have one or two orders allocating inventory that have been there in excess of 100 days.

One of the other unpleasant aspects of the inventory system is that it will allow us to allocate for orders more product than we actually have. This is almost exclusively a problem for spare parts, which are sold to the customer and also used in production of finished goods. The best justification for this loose planning is the parts that are “supplier owned” until we actually take them from stock to use. This allows us to show less inventory on our books and gives the suppliers a convenient way to warehouse their inventory and deliver it to us on time. However, it means that we never show having enough inventory to meet future work orders. So we allocate inventory that we “know” will be available even though it currently does not show as available.

Of course we sometimes do run out of this inventory, despite it being designed to allow uninterrupted supply. But the real problem is the system’s distinction between “hard” allocation and “soft” allocation. With “soft” allocation, the system will reason that I have 10 of part A in total and work order 1 may have seven of those parts and sales order 2 may have seven of those parts. That’s overallocated–that’s demand for 14 parts where only 10 are available–but the system is willing to entertain both commitments. May the best man win, and all that.

Hard allocation is different. Hard allocation says I have 5 pieces of part A in location X and 5 pieces in location Y. Work order 1 will get the 5 pieces in location X and 2 of the pieces in location Y. Hard allocation occurs when an order is actually released to be filled, rather than being booked on the system. Once this is done for work order 1, sales order 2 cannot be released because it can only hard allocate 3 pieces of part A from location Y.

Actually, to be more accurate, sales order 2 would still be releasable for the quantity of 3. The problem comes when we show 3,280 pieces in stock and there are orders vying for 15,743 pieces. Quite frequently the sales orders lose out altogether.

But we could actually ship them. There are 30,000 pieces in “supplier owned” stock on the site. The system simply isn’t aware that we could ship them. By manually intervening and pulling out some of the stock to location Z and manually hard allocating that to sales order 2, you can drop and ship the order. Of course you don’t know for sure if there are enough pieces or if this is one of those cases where we truly don’t have enough pieces to go around. But you can drop the order.

Since, as noted above, a sales order can be released for shipment even if the entire order is not available, it is very possible for half of an order to be released for shipment when the other half becomes available. Theoretically there is no reason why the second half could not be released also. In practice, though, it would be a nightmare in any situation where the veracity of the inventory is not guaranteed. If the first half of the order is out there for 10 parts but we don’t have the parts and I must adjust the order, the system may be releasing orders at that very same time and see that the 10 parts show available and go right ahead and release them on the second half of the order. As to whether that might ever happen–refer to the above on supplier owned inventory.

So there can be some part of an order with truly available stock allocated to it, waiting for the rest of the order to clear shipping so that it can drop. But the order could also simply appear to be allocated, and actually be allocated with non-existent stock so that it cannot actually drop when the first half of the order clears. But this depends on whether the inventory is all “hard allocated” or if there is some that is only “soft allocated” and still up for grabs.

Sometimes there are further glitches so that an order which appears to be shippable is not, or vice-versa.

Okay, got all that? Now come on over to the production manager’s office. His production team needs the spare parts to build tools and gets very upset if you take those parts to ship on sales orders. Also his team builds the finished tools that you need for sales orders. However, they may produce tools “to plan” (that is, for orders that are expected) even if there are no actual orders for the tools and even if there are actual orders for other tools. (In this case, it is likely that we do not have all the components to build the tools that are actually ordered; it is not usual for production to overlook an order that is shippable for one that it is not. But it is possible.)

This production manager told me that if “we” did not ship every single tool for which there was an order by the end of the month, “we” were idiots. The production manager does not understand that it is nearly impossible to make sure no tools are allocated to unshippable orders when the tools are actively coming in to stock; the production manager does not particularly care. The most important thing is that the customer is served, and I am assured that whatever resources I need will be made available to me to accomplish this.

I don’t know if you can guess from just reading this, but it is not altogether easy to explain the situation and the processes for managing it. I cannot take someone from the assembly line down at the computer and tell them to keep pushing this button until all the orders are shipped. Of the four people in the shipping department who manage orders, I am the only one fluent in this aspect of order management. One of the others concentrates on invoicing orders, especially international orders (which is just as complicated), one concentrates on managing the orders when they have been released (which also has a lot of snares and complexities, and requires some management of the workers), and one of them is the supervisor for shipping, receiving, and stock, and has all the bureaucratic hassle thtat cames with that. All of them are generally familiar with the difficulties of getting orders to drop, but none really know the techniques to make it happen besides the basic command to drop available orders. It just makes too little sense and requires analyzing too much data that is not coherently presented by the system.

None of this makes any difference to the production manager, who only understands the first principle of customer service: the customer must be served at all costs. This is indeed extremely crucial for successful business, and is thus very hard to argue against:

Production manager: “If we don’t ship every order we possibly can, we’re idiots.”

Me: “I can’t ship every order that is possible to ship, because there are too many difficulties for me to overcome them all.”

Production manager: “I will give you whatever resources you need to overcome these difficulties.”

Me: “You can’t give me adequate resources to overcome these difficulties.” (He is not my superisor or the manager of my deparment and cannot hire personnel who would be trained to do this work; he can only loan his assembly-line workforce, mostly comprised of temporary workers.)

Production manager: “You are only telling me problems and we need people who can find solutions.”

He kept throwing me “right” principles, and I dearly love right principles, but none of them could be applied in the manner suggested. His most brilliant suggestion was that I make myself more of a pain to my boss until the problems were fixed. I have not failed to make my boss aware of the issues, but to nag, whine, and carp about them does not to me seem like advice with my career in mind.

It would help out customer service a great deal if orders that could not be shipped (because of non-paying customers, which in point of fact are not customers) did not allocate inventory. It would help out customers if the inventory on hand were accurate (a lot of the inaccuracies are driven by loose practices in assembly and machining, responsible to the production manager). We cannot suddenly start worrying about what the customer wants at the end of the month.

And we don’t. The customer is not really in view here, not the customer who wants to use or resell our tools. The real effort is to “ship” as much dollar-value as possible, thus reporting as large as possible profit, which makes the company appear more desirable to stockholders.

The way transportation is set up–your friendly UPS or Fed Ex or DHL, and also your large-freight trucking companies–freight moves to a terminal where it is distributed to other modes of transportation and moved on. There is a deadline for this. Planes and trains and even trucks must leave on schedule. On any ordinary means of transportation (leaving from our location, as schedules vary depending on transportation routes), “shipping” something after 6pm today does not get it any closer to the customer by 3pm the next day than if we ship it at 2:30pm the next day. But on the last day of the month, it is the difference between profit in August and profit in September.

This is why other departments, especially production, always want shipping to stay open as late as possible (even, if they could hope to achieve it, until midnight)–to achieve “credit” for the maximum possible profit to the company. This is good for the shareholders.

A bystander remarked to me, during my discussion with the production manager, that “the stockholder is our customer too.” I understand the reasoning, but is a false equivalence, a confusion of terms. Fundamentally the stockholders rely on us to provide a product or service the actual customer wants. If we spend time and energy doing things that please the stockholder but provide nothing to the customer, we have lost a certain amount of customer support. It may not have an immediate effect; we may have only lost an opportunity to make the customer a certain degree more pleased. But sales is often all-or-nothing. You don’t buy 10% of a tool, or 30%, or 90%; you either buy the tool or you don’t. Often, you contract to buy all of your tools from one company–or another. So if you erode your customer support too far, suddenly it will snap, and you will lose the customer. That can also snowball.

Hence it is extremely dangerous to allow yourself to believe or behave as if the purpose of a publically traded company is to make money for the stockholders (as one of my professors emphasized). This is no doubt how all companies are conducted to a degree, and many companies to a large extent, but it is also what gives you Enron. Morality may be black and white, but cause and effect rarely are; customers will tolerate a certain amount of transgression on their priorities by a company courting stockholders. But the erosion is real, and the breaking point impossible to predict. You cannot provide long-term value to stockholders without spending all your extra effort on providing what the customer wants now and preparing to provide what the customer will want in the future.

In other words, rather than giving extra effort to polishing our monthly financial statement, we should put that effort into producing what the customer wants all month long.