"You sure got all of that one, Craig," Maggie remarks. "Looks like that one went two-fifty."
Craig beams while dropping his driver back into his golf bag. "It was much better than that slice on the third hole. Never did figure out where that ball went."
"Those woods are pretty thick. I've been fortunate enough to search around in there myself."
Maggie was invited to Pierco's top executive retreat to give a half-hour presentation on the last stages of the ERP project. And, as every executive knows, there is no better opportunity for a golf game than an executive retreat.
It is an unusually beautiful day, brilliantly sunny and not a cloud in sight. The breeze off the ocean makes the temperature absolutely perfect for a friendly game of golf. Maggie and Craig are joined by two of Craig's division vice presidents, Brian and Stan.
"No, both of you go right ahead," Maggie motions to them. "I really don't mind hitting last. There's no good place to hide up by the women's tees anyway. Not that I don't trust you, of course."
"Of course," remark Brian and Stan in unison.
After each has hit a reasonable drive, they walk together to the women's tee. Maggie turns her attention to the task at hand, and with all of her concentration sends a beautiful 200-yard drive straight down the middle of the fairway.
"Not bad yourself," remarks Craig. "Looks like you outdrove Brian."
"The tee placement makes all the difference in the world." Maggie smiles sweetly.
"I just hate hitting over water/' she continues as they walk down the fairway, caddies close behind. "Stan, I meant to ask you earlier. How are things going in your division now that the system has stabilized?"
After taking a long puff of his smelly cigar, Stan replies, "Honestly, I haven't seen that much of a difference."
"Now come on, Stan," says Craig. "Don't give Maggie such a hard time. I just told her that your divisional inventory is down thirty million dollars so far."
Stan shrugs and responds, "Yes, that's true, but you still can't make me believe that BGSoft was responsible for all that. We have done a lot of things to help reduce those inventories."
Maggie says with humor in her voice, "We all know that success has many parents, and that only a failure is an orphan."
Stan is a stocky man, a person you know to stay away from, unless you like to be the target of practical jokes. He was one of the few divisional managers who actively opposed the ERP project. Now that it was implemented and working well Maggie was hoping that he would have changed his mind. Well, some people never change.
With a straight face, he asks, "You want me to credit your system with something? Fine. I'll admit that it did make a difference."
"Let's hear it." Maggie is cautious.
"When I walk around/' he says grinning, "there seem to be a whole lot more people sitting at computers, entering a whole lot more data."
Then he adds, "Not quite sure why we need it though. Whoever said that computers were going to eliminate paper should see our place. I think there's more paper than before."
"In ours too," Brian chimes in. "Last week during our division review, I told our director of Materials that the meaning of MRP hasn't changed with all the advancements in technology. The initials still stand for More Reams of Paper."
Stan is not going to let Brian steal his thunder. He waves his cigar and roars, "I told mine that MRP was More Ridiculous Priorities!" His laughter irritates her all the way to the green.
Stan takes one look and says, "Watch the break on that putt, Craig. Looks like it'll break right unless you power it in."
After missing the putt, Craig says dryly, "This time you were right, Stan. "Put me down for a bogie."
"That's a par for me," says Brian.
"Par for me, too," says Maggie.
"And I'm chirping like a birdie," adds Stan.
As they walk towards the next hole, Maggie starts again.
"Come on guys, I'm serious. The implementation went well and we all know you have good results. I would really like to get them written up as a case study."
"Depends on how you measure results," Stan retorts. "I agree that the system was installed on time and within budget. For the sake of argument, let's say that the system was responsible for the entire inventory reduction. But even with that, to me it caused more damage than benefits."
Maggie is unaware of any damage. She knows she doesn't have to ask. Since Stan is quick to air his gripes, she expects to hear the full details long before they reach the next hole. To her surprise Stan doesn't elaborate.
"What is the damage?" she finally asks.
"It's the predicted lift in sales," Craig answers.
She turns to look at him. "Actually, Maggie, it's me and my big mouth," he starts to explain, "One of the strongest arguments in the ERP justification was an expected increase in sales. Not only does it represent a substantial increase in our net profit, it was also so easy to show that it is clearly a result of implementing the system.
"For years we were unable to reduce shortages to less than fifteen percent, and now, in just six short months, we got down to less than ten. Nobody can claim that it was a fluke, or because of other things we did. Not even our friend Stan here."
Stan exhales a puff of heavy smoke. Craig pats him on the back and continues. "Since everybody knows that fewer shortages mean more sales, I had a clear case. No wonder that in the board meeting I shoved it down the weasel's throat."
"I would have loved to be there." Maggie can't help laughing. "Seeing that troublemaker's face ..." Then she notices that the others are not laughing."
"That was a mistake," Craig sighs, "a big mistake."
Stan mutters something unclear through his nose.
Seeing Maggie's surprise, Brian volunteers an explanation.
"Well," he says, "that new board member isn't just a weasel, he's a real sly fox. Since Craig was so confident about the sales lift, this no-good punk wanted to know how come we hadn't updated the sales forecast for the rest of the year. To save face we had to do it, and now we're stuck."
Maggie has to check. "From your gloomy faces I gather that there was no increase in sales?"
"Of course not," Stan barks. "Do you know how many factors impact the level of sales? Trillions!"
Seeing the nasty look Craig is sending him, he raises his cigar. "Okay, I exaggerated, not a trillion, just a few dozen. Two percent increase, bah! Anything can wash out a change that small. The market becomes softer, the competitor reduces his price, you name it. And yes, Maggie, before you ask, last quarter my sales stayed as flat as Kansas."
Maggie looks at Brian.
"Sorry, Maggie, it's even worse in my division. Inventory went down, shortages went down, but sales have gone down too. Over four percent."
"Maggie, gentlemen, I think we are holding up the next foursome," says Craig.
Maggie watches where Craig hits, arid lines up her tee shot to be in the same area.
"Tough break you two," Stan quips. "It's going to be hard to get on the green from there."
"Yeah, yeah," Craig responds, and then turns to Maggie. "Ready to walk?"
"You bet!" Maggie replies.
"Craig, I'm really glad that you arranged this golf game," Maggie teases. "And I thought you just wanted to 'get out for some fresh air.' Isn't that what you said?"
"Well, I know you pretty well." Craig smiles. "I was confident you would ask about results in Brian's and Stan's divisions before we reached the fifth hole."
"Have I become that predictable?" Maggie asks softly.
"There's more than one reason why we like working with KPI Solutions. But the most important one is that when you sell a job, you see it through—not like some of your competitors," Craig explains. "After your team did such a thorough job on the bottom-line analysis for my board, I knew you would follow up on it."
"Explanation accepted." Maggie is back in a good mood.
"Maggie, the reality is that the results we extrapolated from the first division have not materialized in these two divisions."
"Craig, what do you want me to do? The system works fine, shortages are down. And as Stan said, there are many outside reasons for sales not going up."
"Correct, but the situation is more involved than that. Brian is desperate, and he might put me, and also you, in an uncomfortable situation. Maybe you can do something about it. Have a chat with him."
They keep walking silently. Maggie is uncomfortable. She doesn't understand how she found herself in this awkward situation. This weekend was supposed to be fun. But now it looked like they were blaming her for something KPI had nothing to do with.
"That sounds about right," Maggie says to her caddie when he suggests a four iron.
It's amazing how they figure out what club length you need so quickly, she thinks. Listening to the caddie on a new course can make a world of difference. They know how to approach the hole and what traps to avoid. Always listen to an expert. Then, remembering some less pleasant experiences, she thinks, watch out for a rookie pretending to be an expert.
That was my mistake, she realizes. I'm a rookie pretending to be an expert. Why did I offer to do that bottom-line justification for Craig?
KPI is a company of system integrators. We're good at it. The best. But we are not management consultants. Why did I stick my nose into something that KPI doesn't have any expertise in? Craig could have done it himself and KPI would have been okay. Nobody would have blamed us for something we didn't have anything to do with. But no, I had to go and do this stupid justification, and now look where I am.
Maggie, she promises herself, from now on stick to what you are good at, never again pretend to be someone you are not. She feels much better.
"Watch that chip up, Stan," Brian calls out. "There's a nasty slope on that green."
All four putt out. "Looks like that hole goes to Maggie," Stan says. "So far Craig has the lead with two holes, but it is still anyone's game. That steak is going to taste even better when you pick up the tab, Brian."
"Don't get too confident/' retorts Brian. "The game is still young."
While waiting to tee off at the next hole, Brian turns to Maggie. "I want to talk to you."
Seeing her reluctant expression, he immediately adds, "Maggie, I'm sorry that we gave you the impression that we blame BGSoft. Well, maybe because of what happened we committed ourselves to the board for something we shouldn't have. And I can't say that I'm happy with the situation. But Maggie, you don't have to tell me that my drop in sales is not connected, in any way, to your work. I know exactly why my sales dropped."
"Why?" Maggie's natural curiosity forces her to ask.
"Two months ago we launched a major upgrade to one of our product lines," Brian answers. "It's quite an important line, about a quarter of our business. The new products are great; a substantial improvement over what we offered before. Of course, the minute we started advertising, the demand for the 'old' products dropped sharply, but the problem is that we can't produce enough of the new products."
"I told you not to annouce that product line so early," Stan interjects. "My philosophy is to first stock the warehouse with enough inventory, then announce your product. Everybody knows you can't sell from an empty wagon."
Craig chides, "Yes Stan, we all know your philosophy on inventory. That's probably why you had the largest reduction—your division had the most to start with."
Maggie chooses to continue talking to Brian. "So, now you're busy increasing the plant capacity; buying more machines and hiring more people. Do you think you can gear up fast enough to have sufficient sales before the end of the year?"
"Not at the rate we're moving now. That's why I wanted to talk to you."
KPI is a system integrator, she reminds herself. That helps to overcome her instinctive tendency to always look for opportunities. "I don't see how we can help," she says flatly.
"Maybe you can," Brian insists. "Let me explain to you what I really want. My division doesn't have the budget this year to buy machines or to hire more people."
"I decided," Craig says, "that for Pierco, it is less damaging if Brian's division misses their sales forecast than if they overrun the budget by so much."
"Which leaves me only one alternative," Brian continues. "I must optimize the use of the capacity I do have. In other words, I want to install an advanced planning and scheduling system. And I need to do it fast. From what I'm told, it can give me the additional twenty percent I need. Can you help us install such a system?"
"I don't like it," Craig steps in. "One of the main reasons for moving to an ERP system was to get rid of all the local systems; to have uniformity across the board. And now, before we've even finished rolling out BGSoft, we're already starting to put in 'private' systems? How will it look to the board?"
Before anybody can comment, he adds, "I know that BGSoft doesn't offer an APS as part of their system. But I read they have just purchased Intelogic, Is it already integrated? We're willing to be a beta test."
Brian doesn't look happy about being a guinea pig, but he doesn't object. It is clear to Maggie that they've discussed this before.
"We're up," Stan says. "C'mon—are you going to hit or talk?"
"We're hitting," Brian calls back. "Keep your pants on."
The opportunity for new business is clear, but Maggie is also aware of the pitfalls. She decides to move cautiously. There is no point in taking a system integration job and then falling flat on your face because of management issues.
When they walk to the green Maggie makes sure that Craig is in hearing distance and then asks, "Brian, do you know what it takes to achieve real results with an APS system?"
When Brian doesn't answer, she continues, "Are you aware that some fundamental rules will have to be changed? For example, do you know that you will not be able to continue judging the plants by their efficiencies?"
"What do you mean?" Craig sounds surprised. "The whole idea is to increase efficiencies."
Brian steps in, "Don't worry, Craig. I'm not planning to hire more people and I do intend to produce more with the same people. I'll even reduce the inventories at the same time. So what do you care if the efficiency numbers go down?"
"If you can do all that, I don't care."
"I think that it's just a lot of baloney," Stan declares. "But, as always, Brian is latching on to the newest fad. Good luck Brian, and don't forget what I'm telling you, falling for those fads is a recipe for breaking a leg."
Maggie can't stand people who laugh loudly at their own jokes.
Brian also ignores him. Turning back to Maggie he says, "Other system integrators see the implementation of an APS as if it is just another system implementation. I see that you understand the real difficulties. That's great."
So, he has already checked with the competition. Before asking KPI. Never mind, that will shorten the time to get a contract from him, Maggie thinks to herself. But she is not yet ready to offer her services. She invested too much in Pierco to risk it all by carelessly jumping into uncharted waters.
"Brian, I have to know about these things, that's my profession. But how come you know so much?"
"Because my comptroller is crazy about the Theory of Constraints. He went to a workshop on it and for the last six months that's all he talks about. And he can talk a lot."
Maggie and Brian continue to talk throughout the rest of the round.
After everyone putts on the eighteenth green, Stan says, "Looks like that one is yours too, Craig. It looks to me like you won the game as well. Nice round."
As they walk up to the clubhouse, Stan bellows, "What is everyone drinking? This round's on me."
Over drinks Brian asks, "Maggie, what do you think, can you help me?"
"Brian," Maggie says, "let me ask you one more question. What do you really want to implement in your plants, a sophisticated optimizer or a good Drum-Buffer-Rope system?"
"I want results. Fast results. There are only three months left till the end of the year, and I am considerably behind."
"The objective is clear. Now let's talk about the obstacles. We agreed that education plays a vital role in such an implementation."
Craig interrupts, "I'm all for education, but keep in mind that Brian doesn't have any time to spare. Can't he do the education at a later stage?"
"No, Craig," Brian answers. "This is a totally different ball game. How can I explain it clearly? Well, let me put it this way. You know that we need about twenty percent more capacity One way is to stay with convention and buy more machines for thirty-eight million dollars, and hire an additional two hundred people. You won't allow me to do it. That's fine, because even if you approve the expenditure I will not be able to put the machines in place to affect this year's results.
"So what we're trying here is the other way. The idea is to abolish the traditional way of running a plant in order to gain, within a few weeks, the twenty-percent capacity that we badly need. We are not only going to change the traditional rules, we are also going to change the measurements. Maggie mentioned efficiencies. That's one of them. I don't have to tell you how careful we have to be about changing the measurements."
"You're going to do that?" Stan is surprised.
"Yes, I am. I may be crazy, but I'm riot a fool. I can put whatever system I want on the computer. That's not the problem. But if I want to see results I have to do much more. It will succeed only if everyone in the plants, from the plant manager to the machinist, understands why we're making these changes. And why it makes perfect sense to do it. That's the education that Maggie is talking about. That step must be accomplished before any schedule generated by the computer hits the floor."
Craig shows that he understands and agrees.
"As I told you/' Maggie starts again, "KPI is not a management consulting company. We are not the ones to do the educating. So who will?"
"My people," Brian answers confidently. "They're been preparing themselves for it for months. If they sold me on the idea, they can sell anybody. Don't worry, Maggie, that front is covered. What about the software? What's the story with the Intelogic deal? Is Intelogic already integrated into the main system?"
Maggie makes up her mind. If she doesn't grab this opportunity, Scott and Lenny would never forgive her.
"Not exactly. What BGSoft has done is to strip the over-sophisticated features from Intelogic and place it as an integral part of the scheduling module. It's not going to be offered as an optimizer but as a powerful Drum-Buffer-Rope system."
"Exactly what we need!" Brian exclaims.
"And on top of that they're adding a comprehensive Buffer-management system."
"Perfect," Brian whispers.
"The only problem is that is hasn't been tested outside the laboratory walls. But the first one to be a beta test will get Lenny's full attention. You know Lenny, right?"
"When do you think we can start?" Brian asks eagerly.
"You want to meet this year's sales forecast? We'd better start on Monday We must make sure that everything is up and running before the end of this month."
"That's the spirit," Brian replies.
"Wait, wait," Stan waves his cigar, "I want to understand what's happening here. Brian, are you serious? Do you think that with shuffling something in the plants and putting in some fancy system you can get a twenty percent increase in capacity? I don't believe it. Have you been smoking something?"
"Stan, I intend to meet my sales forecast without spending a fortune on new machines or new people. You're going to be eating my dust."
"Fat chance. Tell you what, if you pull off a miracle of those proportions I'll eat my hat. No, even better, I'll invite Maggie to implement it in my division."
Craig laughs. "It's easier to believe that Brian will meet his forecast than that you'll invite computers in." More seriously he asks Maggie, "Your standard terms, and you'll put as many experienced people as we need on the project?"
"Absolutely."
"Brian, I think you can shake hands with Maggie. We have a deal."