The Business Must Be a Winner
Left to myself, I wondered: had I sparked the enthusiasm necessary for recovery? Strange as it seemed, bearing in mind that none of them had any experience of me, I felt certain that not one would seek a job with another organization, as in their place I might have done. They were in the hands of a completely unknown quantity. I had nothing to lose. The fact that the place had survived at all, despite the current state of affairs, meant that the business must be a winner if it could be put in order, and this depended upon the manageability of the workforce. If they could not see that I was working for them as well, that would be their error of judgment.
It took two days to design a method for stock, stores and production control. With all hands to the wheel, it took four 12-hour days to write up stock control cards and a Saturday and Sunday to take stock under my personal supervision. There was almost as much unrecorded as there was indifferently recorded. Against recorded stock there was a 17% cost deficiency; 9% of which was found as unrecorded stock. The remainder of the unrecorded stock was obsolete and was equal to 12% of the now recorded useful stock - and stock represented the major asset.
I next sorted out the production program, made appropriate reservations on the stock control records and arranged for Purchasing to make good the deficiencies or cancel where over-covered. After this, I set about assessing the production capability in terms of time and analyzed each product for this element. This gave fair certainty about what could be produced, providing I had all the parts. More importantly, at last I could orientate production economically to suit customers' needs.
From this exercise I discovered that the programs were 29% in excess of the maximum potential of the works. It also revealed the over-cover on material; and, more importantly, showed that each new program had always ignored the shortfall on the previous one, and stock control had failed to carry forward the cover onto the new program. This factor, together with failure to organize production and control costs, had resulted in over-buying and under-producing, hence the cash flow problem.
Add to this the studious avoidance of available standard products around which the designs, in the main, could have been built, and you have the general picture of a small business in large confusion. It required no great mind to find the faults and nothing but applied determination to put them right. After dealing with and initiating the major remedies, I called all the senior people together, including the shop steward, and informed them that, having set up the method of control; I was now going to revert to my proper function as a General Manager. This was quite simply to succeed in my job by providing them with the facilities to succeed for it was on their success that I must depend.
I promised to provide the climate, tools, and encouragement, but not to do their jobs or accept their responsibilities. If they were in difficulties I would help. If they had let things go too far, and I had to take over, I would expect their resignation if I succeeded where they had failed.