Tuesday, May 28, 2013

Competing Demands

Many years ago, I was hired as the manager of a contractor operated maintenance facility. During my first week I found boxes of repair parts stashed under workstations and storage racks or laying in the isles of the parts room.

When I asked the repair technicians why these parts had not been added to the inventory and put in the correct parts bins, the answer was “we pulled the parts we need to fix the the stuff the customer needed right away and just left the rest sit till later”

As you can probably already imagine, “later” never came! Far too many of the parts left uninventoried had become critical need and repairs could not be completed waiting for parts that were under workbenches and storage racks.

My next step should be painfully obvious. Every nook and cranny, drawer and hiding place was emptied, the parts (and equipment waiting for repair!) were inventoried, placed in the correct storage location and the computerized inventory updated.

Predictably, the vast majority of EDP (equipment dead lined for parts) were cleared and the maintenance backlog that had existed for months magically disappeared. We also discovered serious overstocks of parts that were critically needed by other maintenance facilities that could be cross-shipped to clear long standing backlogs.

The point is not that simple good practices fixed a silly problem or that people taking the easy way out created more problems than they solved. The real point is that looking only at the short term issue, the customer needs this one piece of equipment by close of business, became a mind set that missed the bigger issue.

Yes, that customer might be screaming for that one piece of equipment today but, and it’s a critical but, if we didn’t return 1,200 units each and every month the entire operation ground to a halt at a cost of (in 1983 dollars) a quarter of a million dollars a day.

We can all come up with a plan to get that one critical piece of equipment repaired and back to the customer while still inventorying and stocking the newly received parts. The repair technicians, as they should be, were so focused on the single repair job they never looked beyond the immediate pressure point.

What about the manager who should have been looking at the bigger picture?

Trust me, the guy was very bright but he had been in the most high pressure, visible job the company had for just under two years and had become completely burned out. He was moved back into engineering and later to engineering management where he performed brilliantly. I always suspected that if he could have taken a month off, away from the daily pressure he would have spotted the same issues and solutions I did.

The years I spent as the manager of that facility taught me more about managing competing pressures and demands than anything before or since.

To paraphrase Kipling: If you can keep your head while all those around you are loosing theirs, you will make a great manager.

Monday, May 20, 2013

Why the US economy is in such bad shape

US census bureau reports that in 2009 the median home price was $216,700 and the average price was $ 270,000.

According to the National Automobile Dealers Association, the average price of a new car sold in the United States is $28,400.

If we accept that you only need 10 percent down to buy a house, then you will need to finance $243,000. With a 30 year fixed mortgage at 7% your monthly payment will be $1616.

To buy a new car with 1/3 down you will need to finance $18,933 resulting in a monthly payment of $580.

So lets do some calculations:

House payment          $1616
Car payment               $  580
Car Insurance              $  200
Telephone                   $    60
Electricity                   $   125
Food                            $   600

Monthly total             $3181

That suggests a weekly income of $734 a week or $18.35 an hour.

The March 2004 wage number (the latest I could find) state that the average weekly income is $520 a week or $13 an hour. Bump that monthly wage $2253 against the projected monthly costs and the average wage earner can’t afford an average house or an average priced new car and still meet the minimum to live an average life.

Keep in mind that we didn’t include clothing costs, gas costs or any of the other reasonable monthly expenses. So the question is why is anyone shocked that personal debt is so high? In attempt to live an average life style the average American worker had a short fall of about $1,000 a month or $12,000 a year.

It’s not that the average American had unrealistic expectations; it is American business that had the unrealistic expectations. Business expected people to work for less than a living wage or they expected that a lot of working Americans would live far enough below the “average” to support the people making well about that average wage.

National Center for Children in Poverty has developed a Basic Needs Budget that calculates the minimum cost for a family of 4 to live at, in their words, a bare-bones level.

The Basic Needs Budgets show that it takes an income of about 1.5 to 3.5 times the official poverty level ($22,050 a year for a family of four), depending on locality, to cover the cost of a family’s minimum day-to-day needs.

According to the Social security website, the median wage is 66.8% of the average wage.

Do these numbers give you any insight into what the problem with the US economy is and where the blame really belongs?

Tuesday, May 14, 2013

Are you bigger than your job?

Found this quote on an email from Business Insider’s Instant MBA, “If you are bigger than your job, your job will get bigger”.

An obvious fallacy since if you are bigger than your job you will either change your job, including changing companies, to a more challenging job or get small enough to fit the one you’re in!

The company you work for has a vested interest in you doing your current job and not rocking the boat, not in helping you build your job to fit your capacity or help you grow professionally.

Monday, May 6, 2013

Corporate Citizenship

The more people who own little businesses of their own, the safer our country will be; for the people who have a stake in their country and their community are it’s best citizens.
John Hancock

If old John was right, perhaps that’s part of what’s wrong with the country today. Corporations don’t think of themselves as citizens of the city, county, or even the country where their office is – they think of themselves as global citizens. As global citizens, they have little or no stake in health of the community or country where their offices and factories just happen to be located.

Just as the right choice of a car for you may not be the right choice for your next-door neighbor, the right choice for a global corporation may not be the right choice for a local business. Putting all our government support behind those big, global corporations rather than the smaller local business is, in far too many cases, turning out to be a bad choice for the nation as a whole.

Just perhaps the founding fathers were on to something in fearing big corporations. As Ted Nace points out in “The Gangs of America” the founding fathers had the example of the East India Company and it’s use of a charter issued by the king of England to stifle competition. The East India Company had no interest or concern for the lives or livelihoods of the American colonist, only for the company’s profits.

In much the same way modern corporations seem to have no concern for the lives of their workers or the communities in which the company happens to have it’s offices.