Last week I described the organizational transformation at high-tech hose-maker Titeflex: Orders taking months to fulfill in 1988 are now out the door in a couple of days. This week we'll see what lies behind the miracle in Springfield, Mass.
Titeflex was an early adopter of Materials Requirements Planning computer software. Unfortunately, the touted system was imposed on antiquated processes. "We automated chaos," says company President Jon Simpson. "The computer governed our lives." After taking charge at Titeflex in August 1988, Simpson, on a business trip, called the office only to find that the computer was down. Customer orders could not be shipped.
Frustrated, he ordered a manager to "go down to the local five-and-dime and get a box of crayons, then write customer addresses on the boxes and ship them." So began the simplification of a Byzantine system.
Titeflex had a superb reputation for doing "impossible jobs" for the likes of NASA. Unfortunately, Simpson says, "we weren't so hot at the routine." The company suffered, he asserts, from a "manana attitude." But starting with the great crayon caper, that soon changed.
"Velocity" became the battle cry. In August 1988, only 23 percent of Industrial Products Division orders were going out on time. (Just discovering the number, previously unrecorded, was a big step forward.) By December, the on-time rate hit 65 percent; by March 1989, 90 percent. "Brute force" -- not capital spending or fancy systems -- was key to this initial surge.
Following the first crude effort, Simpson and his senior team got down to building a "culture of urgency" for the future. When they began, key functions (accounting, engineering, manufacturing) didn't communicate. The average person on the line was thwarted at every turn. Customers searching for delayed orders used to pour into headquarters, in hot pursuit of top management. Simpson now took these irate customers down to the factory floor and turned them over to surprised Titeflex workers, telling the two parties "to work it out."
Simpson's new stock answer to any front-liner's expression of frustration became, "So go fix it." Which they did.
De-layering also started: One to three management levels (and the managers) were lopped from every function.
Workers, Simpson says, were "hungry for change." And how fast can major change proceed if you're hungry? The answer, astonishingly, is virtually overnight. In one fell swoop, for example, production controllers (expediters who wrestled with the previous, cumbersome system) were reduced from 30 to 10; and the remaining 10 were shifted to the front line.
All first-line supervisors in the Industrial Products Division evaporated in the course of one weekend: A switch to self-managing teams (the "manufacturing cells" described last week) occurred between Friday and Monday! Simpson admits that during the first two months "70 percent of [team members] wanted to kill each other." Nonetheless, improvement began immediately.
Titeflex is organized by the Teamsters. Shooting straight and earning respect -- repeatedly visiting each shift, talking with workers one-to-one, learning hundreds of employees' names, opening the books to everyone, putting five union and only two management people on the committee to select self-managing team leaders -- topped Simpson's agenda for winning Teamster support. He succeeded: During the wobbly process of introducing the teams, for instance, not a single grievance was filed.
(Simpson's story was confirmed in the ranks. The changes were "something that we've always asked for," one 20-year veteran told me. One of his colleagues even added that the change, which seems so monumental, "isn't coming fast enough.")
All traditional relationships were altered: Engineers, seldom seen on the plant floor in "the old regime," are constantly out and about today, seeking workers' advice. Front-line employees, who never before left the shop on company business, now routinely head out to work with customers.
And customers regularly visit Titeflex, to work on new product development. (The product-development cycle has been cut by about 50 percent in the last year.)
The company is also forming "partnerships" with suppliers. For example, Du Pont and Titeflex people meet quarterly to discuss product and process improvements; neither would have allowed open access to their operations in the past, Simpson reflects.
Simpson emphasizes that the turnaround is almost entirely a product of changing attitudes and eliminating silly constraints. He recalls an old-timer who explained to him how to make high-performance nuts (for hose fittings) on his 40-year-old machine, to avoid going "off line" to another department (a typical cause of delays). "Fine," was Simpson's retort. Over the weekend, the fellow retooled the ancient machine -- proudly showing Simpson the first new products he ran, early the following Monday morning.
Titeflex is now taking business from competitors, charging more for its swiftness and reliability. And revenue in the Industrial Products Division, for example, shot up 40 percent in 1989. As efficiency increases dramatically, front-line employees say they feel no threat to their jobs. But they are now putting pressure on the sales people to get more business.
As one Teamster said to me in parting, prior management "forgot about the little people. They can really do it for you."