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Manufacturing Management: How We Got It Done

Article by Larry Valant November 13, 2016, 04:13 pm MST

This is the second in a three-part series on manufacturing management. Read the first here.

As discussed in the previous column, the strategic pivot at at Samsonite in the 1970s was no small feat. After the decision was made to simultaneously double growth and profitability while launching several new product lines, there was an immediate need for an  overhaul of processes and logistics, and the transformation involved changes large and small. 

We kept the line (manufacturing and production) organizations separate. The line organization focused on meeting existing production requirements and reported to me. The projects all were led by a competent project manager who knew what they were doing. They also reported directly to me.

Plant and project management

The plant organization structure was left largely intact with materials management, production, QC and QA, industrial relations (HR), plant engineering, product engineering, and sales coordination. They all had their specific goals and metrics on a daily, weekly, monthly basis. We kept the organization as it was with no change in functional leaders. We did change the routine to a formal weekly staff meeting (45 minutes) with reports on deliverables and discussion of key issues, opportunities, and decisions.

Initially, we had some housekeeping issues but they were resolved in the first week, and once those were corrected, we had no further problems.

Organizationally, this was a completely different story from the plant organization. Fortunately, both I and my Team of eight highly competent people had interfaced with the plant organization on several projects, which had gone well, so there was almost no "Plant Workers" versus "Corporate Suits" Because our prior joint work had gone well we knew and respected each other. Plus, they knew what we had helped get done in the luggage division and they knew we had changed the compensation system dramatically to tie it to results, with practically no upper limit if performance and residual income results merited -- so the plant organization had open minds.

King had also given me the authority to staff, with anyone in the organization being fair game. He had delegated this which meant I could take anyone but those in his core staff. We didn't take many, but we did take four or five outstanding people -- one of whom was a Marine aviator, Lon Doty, who ran the project for capacity expansion and who got it done in eight months, less than the targeted 12. It was an amazing accomplishment. He was a solid leader and a super project manager who had assembled a first rate project team.

Each of the projects had a competent project manager who understood our project fundamentals and who therefore knew how to staff, manage, and deliver expected results on time and on budget! Project success requires all these. Most project managers don't understand these, so most projects are late and over budget. We had them all, so our projects were on time and on budget.

Product engineering and development

Of the six new product lines to be introduced, one was already in pilot production, the kitchen barstool line, our first entry into this important market. The line had tested well, both in the early research and live market tests. Everyone was excited about the lines' introduction and its overall marketing value. Each line was, of course, a standalone project. This project was already behind schedule and over budget, so we had a little catchup to do. We had borrowed as overall project manager someone I had worked with in the luggage division. This man understood how to manage such projects successfully, and once again worked his magic -- this time in the furniture division.

We gave him some extra help on the barstool project. He caught that up so we made the Housewares Show with shippable product in the warehouse. Although we came in over budget -- we were too far gone to make up the difference -- the other five projects all came in on time and on budget, even though two used a fluid-bed PVC coating process that was new to us. Ron Walther, our chief engineer, was a positive genius who knew how to make a plan, even when new coating processes were involved.

These projects all came in on time, and all but one on budget, because we has valid project plans for each, competent project management, dedicated (in the true sense of the word) project staff, and great communication and cooperation from the line organization. This was a textbook example of doing project management the right way.

Schedule adherence: Pre-MRP & MRP II systems

Remember, all this took place in 1973, well before MRP and MRP II, before laptops, email, iPhones, and Excel. Fax was still in its early stages. Most planning and communicating was done with paper and pencil, typed memos, and meetings and with little computing power available unless you were friends with the director of MIS, who would move heaven and earth to schedule you on the IBM 360.

But we needed an overall plant scheduling process we could manage and control. We had to have the ability to schedule work work centers and departments ourselves, so we could define production requirements and the flow of inventory to each one, accurately. We needed this for each department, even those serving multiple product lines. Gordon Brown, a McGill and Purdue University graduate engineer understood how to do this, His inventory process had been implemented with great success in Luggage. He did the same with a project staff of two in Furniture. This provided the overall plan that gave him the information he needed to schedule the work centers and departments which he and his team did -- again, on time and budget. Today this would be done by installing an ERP Production scheduling module -- but you need competent staff, project management, and an experienced supplier support team because as ComputerWeekly has noted, ERP installation, even now, is "a hornet's nest of complexity."

Absenteeism and turnover

The Murfreesboro giant production facility had been Samsonite's furniture division key production operation in the late 1950s. During that time the furniture division flourished with growing revenues due to expanded market penetration. But for all the success, the plant grew to over 1,500 employees by 1973, the operation was plagued by absenteeism and tardiness that exceeded 20 percent, a very costly reality. For the plant to achieve the levels of growth and profitable performance, it was essential that both absenteeism and tardiness be reduced to below 5 percent. An interesting challenge.

Although only 35 miles south of Nashville, Murfreesboro was a rural farming community. Many of the employees lived or worked on small farms, and accordingly, taking three day weekends to catch-up on farming chores had become an acceptable part of many employees' lives and the plant culture.

All this became clear during many conversations I and some of my people had, both formally and informally, with first-line supervision, union stewards, and workers. When we asked them to help us solve the problem, the answer was clear -- make three-day weekends official, so a four-day work-week with 10 hour days became a reality, with the provision that absenteeism and tardiness fall and stay below 5 percent. It did, and the impact financial and morale made big news in Tennessee for quite some time. Our approach was followed by many large employers who enjoyed similar success. In our case, much of the credit goes to those original groups of supervisors, union stewards and employees who spent lots of hour with us to develop and implement the concept successfully.

This is the second post by Larry Valant and Gayle Hustad in a three-part series on manufacturing management. Coming next: "Now: The Tesla OEM supplier."

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