Day 27 - Conference Call: a meeting with eye rolling

          Technically, yesterday was my last day at work. My benefits have terminated, although the severance payments will now begin and continue through the end of January. I haven’t done a closing with Gary yet, and I missed some days because of the lithotripsy, so I am going to continue to work through the end of the closing process. Gary seemed happy to hear this. Now that I am dealing with him I don’t talk to Bill very much anymore. That suits me fine.

          We began today pulling dated reports from the subsidiary records to support the closing balances. Once this is done, there is not much else to do closing wise until Helen and the accounts receivable girl finish up the sales reports. This sometimes takes a week because they have to drag sales information out of the field reps to properly record the vehicles delivered. There are things to do but they’re not burdensome. I’ll let Gary do them and help him out if he gets lost. That’s the way I like to learn. It seems to suit Gary as well.

The difference between a meeting and a conference call. 

Of course video-conferencing just ruins all the fun! 

          There was one interesting development today. When I say interesting I mean the kind of thing that had me muttering profanities under my breath, and yelling them at the top of my lungs after I got into my car and started driving home.

          Bill invited me to a meeting to discuss the status of the perpetual inventory project, specifically the progress or lack thereof that has been made in implementing a sound, viable cycle count program. Some history is in order.

          One of New Ron’s projects was supposed to be orchestrating a company wide implementation of a perpetual inventory system. Fritz wanted to make it a priority because first, the auditors had suggested it would be a good idea, and second, it was a good idea. Fritz wanted to start with my division because ostensibly we had the least robust inventory system as evidenced by repeated significant write downs following our periodic physical inventories. New Ron contracted with a consulting group to come in, review our systems, and give us a conversion plan. The consulting firm left us with a report that contained a list of steps we needed to take in the approximate order that we needed to take them.

          New Ron sat on the report for weeks. Fritz kept calling him asking for a timeline for completion. New Ron kept telling me Fritz wanted a timeline, but there was no way to give him one. I suggested that all he needed to do was take the consultants’ report, assign the listed steps to appropriate individuals, and put dates next to the items. Still he didn’t do it.

          “Fritz is going to fire me if I don’t give him a timeline,” he said to me one day.

          “Give him a timeline,” I said.

          “I can’t give him a timeline.”

          “Sure you can. Just do like I told you. Take the consultants’ list. Assign names and dates.”

          “I don’t know,” he said. “I already told Fritz that this ought to come from Bill.”

          I thought that New Ron was right—not that the timeline ought to come from Bill, but that he was going to get fired. This was especially true if he was going to try to hand the whole thing off to Bill. Fritz had made it obvious that he wanted New Ron to do it. Next thing I knew Fritz had got onto Bill about it. Bill didn’t let any grass grow under his feet. About five minutes after Fritz talked to him he had called a meeting. He invited all the department heads to discuss the project. At the meeting Bill said that we had to get this perpetual inventory system going as soon as possible, but he didn’t know how to do it. Neither did he think that anyone else knew how to do it. He said that everybody needed to come back the next day with some ideas.

I already had an idea so I ran with it. I took the consultants’ list from their report, entered it into a spreadsheet, put a name and a date next to each item, and printed it out. It took about half an hour. I showed up at Bill’s meeting with stapled and collated timelines to distribute. Bill was ecstatic. He called Fritz from the meeting. He told Fritz that we had this timeline complete with task assignments and dates and that we would have the perpetual system implemented in 6 months. Fritz was ecstatic as well.

After the meeting Bill told me he had originally thought that the inventory implementation was going to be a bust because no one knew what to do, but now that I had come up with the fabulous timeline he was suddenly feeling really good about this project. He was feeling especially good because now Fritz was feeling good. Everything was good. Well maybe New Ron was not so good, but I had given him plenty of opportunity to be a hero. He wouldn’t listen to good advice.

We started having meetings once a week to track our progress against the timeline. We hired the consultants to come back and help with the software changes and data conversions we needed in order to make the system work. Bill ran the first couple of meetings, but gradually I took over. New Ron came to the meetings, but he didn’t have a lot to contribute. In a couple of months Fritz let him go—told him they had decided to go in another direction. My star seemed to be ascending. Ascending that is until we got to the cycle count process.

Cycle counts are critical to a perpetual inventory system. In a periodic inventory system (the opposite of a perpetual system) you take a complete physical inventory—wall-to-wall—at least once a year, and adjust the inventory balance in the financial records to the amount that you counted. In a perpetual inventory system you count everything at least once a year, but you do it piecemeal. You count the high value and critical items more than once a year. You do a few items every day. Every day you compare the counts of those items to the balance in your inventory records. If the amounts are different you investigate to find out why. Usually it is that you are using more or less of that item than your bills of material say you are supposed to use. If this is the case you then need to determine whether the operators are using the wrong amounts or the bills are specifying the wrong amounts. Either could be the case. You either fix the bills or retrain the operators depending. If you don’t do this, and do it effectively, you might as well not have a perpetual system because it’s not giving you any more accurate results than you would get with a periodic system.

The problem is that doing cycle counts requires dedicated resources. That is you have to have people permanently assigned to do cycle counts, and they have to be smart enough to do the investigative work and fix the problems on an ongoing basis. The trade off in terms of costs is that while you are paying a few people throughout the year to do cycle counts, you don’t have to shut the whole plant down for the day or two that it takes to do a complete physical count and pay everyone to count rather than to build the product that makes you money. That and you have better control over your inventory spending throughout the year. A perpetual inventory system is a good thing—a better thing than a periodic inventory system—but it does cost money to implement. It does add to cost at the outset, and some of the eventual savings are not immediately quantifiable.

This became my problem. Management was all for a perpetual inventory system until they found out we were going to have to hire some cycle counters. That little tidbit threw a monkey wrench into the works. My star stopped ascending. My star had the brakes put on. I wasn’t anybody’s fair haired boy anymore. Suddenly I was that dumb ‘sumbitch’ that wanted to hire more indirect overhead. This just reinforced something I already knew, but had neither the time nor the energy to put into practice in the circumstances at hand. It’s not enough to do your job and manage an extra project. Your also have to manage management’s expectations along the way. You cannot depend on them to know what needs to be done, or why, on their own. If you don’t do this you will be tossed overboard at the first sign of trouble. Think of it as the first rule of seamanship—keep one hand for the ship, and one hand for yourself. If you don’t make an effort to protect yourself, you’re not going to be of any use to the ship.

I had to fight for every cycle counter I got, and that turned out to be too few and some of them not bright enough to do the job. We launched the new system without a viable cycle count process in place, and as a direct result the system effectively crashed and burned. Guess who had to fade the heat? That is correct. New Don got fired for not doing the inventory project. I got blamed for doing it badly. It wasn’t the proximal cause of my dismissal, but it had to figure heavily.

That brings me back to the present day and the meeting that Bill asked me to attend. I had already been fired. I had washed my hands of the inventory fiasco. I had enough stuff to worry about without agonizing over the inventory. That was someone else’s problem now. Still Bill wanted me to contribute as I saw fit. He must have thought I might know something useful.

All the current cycle counters at the meeting as well as the remnant of the implementation team. The IT guys were on the line via conference call as was Fritz who as it turned out was running the meeting. Apparently Fritz didn’t know that I was there because about the first thing he said was we wouldn’t be in this terrible fix if only we’d had a strong individual in charge of the project. Then he chuckled at his own insight. The sound he made was an embarrassed choke. It was the kind of sound a pimply sophomore might make just after he has called someone ‘gay’ only to realize that they are not insulted by the term.

I looked across the table at the head of the engineering department. He rolled his eyes because he knew what an affront to good sense and sensibility Fritz’s observation had been. He could see how offended I was. I thought of all the clever things I could have said to Fritz just then, but the thing I really wanted to do defied the laws of physics. What I most wanted to do was stick my hand through the phone all the way to Kentucky, grab Fritz by the throat, and drag him back out at my end. I wanted to see the look on his face. I wanted to rearrange the look on his face…a lot. I did not see fit to make any contributions to the discussion. When the meeting was over I got in my car and drove home.