Friday, April 30, 2010

Day 126 - Dangerous Flora

          My wife is sorting out what to sell, store, or take with us, and organizing the impending garage sale. It's a huge undertaking. We are moving out of a four bedroom house with a pool into one tiny bedroom in her dad's tiny house. The logistics are daunting. Fortunately my wife is good at stuff like that. I’m not. My natural inclination is to pile it all up in the back yard and set fire to it. Unfortunately you don’t get any money for bonfires.
          We’ve schedule the sale for the third week-end of the month. We’ll be moving on the last week-end. The 31st is a Saturday. The new tenants will be moving in on the 1st of February. Arranging for the trucks and the moving help is my job. I’m probably not any better at that than I am at organizing a garage sale, but at least there’s nothing that I can reasonably set on fire.
          In order to complicate matters as much as humanly possible, we will be renting a storage unit near our son’s place on the other side of the state. Rentals over there are about half what they run here on the East Coast. Hopefully the dollar savings will more than offset the added inconvenience of having our stuff three hours away from where we live. I guess it all depends on how well we choose what to store and what to keep with us. I’m already beginning to dread the hours I will be spending bouncing back and forth across Florida in a rented truck. My back is killing me.

* * * * *

Marjorie Tinn’s attachment to Quentin Parks became problematic for me in dramatic ways in fairly short order. She was like a bromeliad in the swamp, nestled in saw grass and scrub palmetto, surrounded by mangrove, bald cypress, slash pine, gators and snakes . She was pretty to look at but more trouble than she was worth. You just couldn’t get close enough to reason with her, and if by chance you ever did, you'd find her as bristly and dangerous as the stuff that seemed to protect her.
Probably my most telling run-in with Marjorie had to do with rearranging the offices. This was a task mandated by my new nemesis, Rod Chandler. Rod decided that we needed to move cubicles and people around and shuffle some offices in order to optimize work flow in the department. I suppose this was a laudable goal, but given our by now dire cash position, we weren’t allowed to spend any money to reach it.
My feeling was that we had plenty of other, more pressing things we ought to be doing. We were out of cash. Our vendors were on the phone sunup to sunset every day screaming for the money we owed them. Our production lines were constantly running out of parts that our vendors wouldn’t ship because we hadn’t paid them. Optimizing workflow in accounting was precisely like the proverbial rearranging of deck chairs on a sinking ship. Still, I had my orders, and Rod was not the type of manager who would brook a challenge to his authority. I had tried logic on him before. The interjection of logic looked like insubordination to Rod.
Eddie Sharpe and I set to redrawing the cubicle farm in the center of two large rooms that were ringed with private offices. There was no easy way to do it. It took several days of back and forth until we had what we thought was a workable plan. Any improvement we might achieve over the current state of affairs would be marginal at best.
The real difficulty would be not to piss anybody off. Since we would be asking several people to move all their years of accumulated stuff anywhere from 5 to 15 feet into a smaller cubicle to achieve an “optimum work flow” that would represent hardly any improvement, we were at a pretty considerable risk in that regard. Naturally that’s just how it worked out. Everyone who had to move was pissed, and not just a little bit either.
I knew this would happen. I took some pains to prevent it. We had several meetings with all concerned parties where I explained at length what we were trying to do and why. I asked for input. We shared the drawings. We got a crew from maintenance to do the heavy lifting. We gave everyone plenty of time to adjust. I apologized to everyone in advance. Maybe that was my problem. Apologizing made it look like I wasn't really committed to the project, made me look weak and susceptible to whining and chafing.
When the day to move came, Quentin, who may not even have known what Rod was having us do, was at a meeting of the board of directors. The maintenance guys were dismantling cubicles and re-running electrical service. Eddie was coming to my office with constant progress updates. Rod was holed up in his office seemingly oblivious to the project he had ordered. We made it to almost 10:00 a.m. when Marjorie came to my office to tell me that Quentin had finally put an end to our foolishness.
“What foolishness is that?” I wanted to know.
“Moving all these girls around for no good reason,” she said. “You’ve got the whole department upset. I finally had to call Quentin to get him to put a stop to it.”
“Quentin is the one who wanted us to do this!” I protested. I had Rod’s word on this. I would have been skeptical, but I had actually discussed some aspects of the changes with Quentin. He certainly knew what we were up to.
“Don’t be ridiculous,” Marjorie said. “Quentin would never authorize this kind of chaos. This is you and Eddie trying to make everyone miserable.”
Apparently Quentin could not stand up to Marjorie’s disapproval. When she called him to dip me in the grease, he pretended not to know anything about it. He was either afraid of her, trapped in the web of her defter enchantments, or both. It wasn’t the first time the bastard let me go down a path with his explicit blessing only to pull the rug out from under me at the worst possible time and place, but it was the first time where my undoing at his hands had been orchestrated by Marjorie. The realization of how thoroughly I had been skewered left my stomach churning for weeks.

           Rod took the afternoon off, and escaped any connection to the events of the day. He may have been as deft as Marjorie at feigning innocence while screwing the hapless. What he had ordered me to do and pestered me to do sooner rather than later, was suddenly my mistake to answer for…and mine alone. That happenstance would have set a lot better with me if I had ever thought what we were doing was a good idea. I don't like fading the heat for my own mistakes, but at least it's fair. Being made the scapegoat for someone else's folly sucks...a lot. 

Thursday, April 29, 2010

Day 125 - Return to Philanderville

          I’ve decided that I’ve run out of time to get a job before I have to move. Things are accelerating on all fronts now, except the job hunt. There is no acceleration there, nor even any movement. The job hunt is dead in the water, becalmed, no wind, no current, nothing. The up-tick I hoped for in the listings after the holidays has not materialized. We’ve decided to move in with my father-in-law rather than our son. This will be more difficult in some respects, but less complicated too. At Nelson’s place we will have a purpose. At our son’s, not so much. Purpose is good.
We’re having a garage sale to get rid of our excess stuff. There’s a lot of excess stuff. The garage is already full of stuff we don’t have room for in the house. We haven’t been able to put a car in the garage in years. I hate garage sales. I hate moving. I hate organizing and packing crap that, when I look at it, I wonder what the hell we were thinking when we bought it. I want to set fire to the whole lot of it, and run away. I’m not looking forward to any of this. It sucks to be me. It probably sucks even more to be my wife because in addition to all the crap I have to deal with, she has to deal with me.
          Another problem for me is the growing possibility that I’m not going to get a job at all—that the economy is so well and truly flushed that it will never recover to be like it was. That is not to say that there won’t be growth in wealth and income, or even that there won’t eventually be a return to something like full employment, but that the growth of wealth, income, and jobs will look completely different from what it did just a short time ago.
There is no question in my mind that certain things have changed permanently. For instance the transfer of manufacturing capacity and jobs from the U.S. to China is a trend that will not reverse. Even if the U.S. were to take drastic protectionist measures now, it would only slow the erosion of manufacturing base in this country and create an artificial respite from the inevitable. A better—that is more logical—tack would seem to me to be a quantum shift in our knowledge and skill base toward more technical and service oriented productivity.
Some of this may happen naturally and organically, driven by market forces, but a lot of people are likely to be displaced one way or another along the way. Some are going to lose their jobs. The less fortunate are going to lose their livelihoods. The pitiable are going to lose their homes, their utility, and their dreams.
A quantum shift in a population’s knowledge base is a long term enterprise. It will take years to accomplish. Even on an individual level—the level where it will begin and end—it takes a long time to change careers and get back up to speed in something new. For a guy over 60 who still doesn’t know what he wants to be when he grows up, there may not be enough time left. The problem on a personal level, my problem in other words, is to determine where all this is going to lead and to anticipate both the pitfalls and the opportunities that are going to be presented. Hoo boy! Tell me that’s not a tall order.
*****
          Like most places, there was sub-text at Albatross—stuff going on beneath the surface and behind the scenes that influenced and flavored the larger currents. Some of these had to do with the by now familiar bane of my working life, philandering. I’ve grown to hate philandering. Men and women who are seemingly at the mercy of their baser instincts, unable to resist the charms of the opposite sex, powerless to cool the flames of their own ardor, are willing in the end to crater their workplace and ruin the lives and livelihood of their co-workers, friends, and neighbors to sate their passions. That something as pervasive and banal as lust can undermine the flow of commerce and industry seems ludicrous to me, yet I’m sure it is so.
The principals this time were the corporate CFO and his secretary. Let’s call them Quentin Parks and Marjorie Tinn. Quentin was a distinguished looking gentleman, silver haired, ruddy complexioned, a sharp-dressed man. I never saw him when he wasn’t splendidly turned out.
Marjorie was much younger of course—a thirty something divorcĂ©e, exceedingly pretty, who spent most of her income on smart dresses, killer shoes, and a regimen of physical enhancements calculated to augment her appeal.
Together Quentin and Marjorie were a resplendent couple, the very picture of a titan of industry squiring arm candy like the spoils of war. Of course I had to imagine that. I never actually saw them together in public other than in the office where it was completely appropriate for them to be together performing their various work day duties.
          There were few people in the office who did not know or suspect what was going on. Marjorie would drive Quentin’s silver Mercedes around town on errands like picking up his laundry and getting lunch for the two of them to share in his office with the door closed. She spent way more time than one would have thought necessary in his office, bending over his desk, standing behind him with her hand on his shoulder, leaning against him, even occasionally rubbing his neck. When she wasn’t busy attending to his needs, professional and otherwise, she sat at her receptionist station in the middle of the finance department and played solitaire on her computer.
She was not a popular girl with the other women in the office. She was popular with most of the men because she was pretty, as I have already mentioned, and flirtatious and happy to describe the intimate particulars of her lingerie with anyone who would listen. But the women hated her.
I know this because they came to me about it, complaining and demanding that I do something. It wasn’t just that she didn’t do any work other than for Quentin. Ostensibly her job was to provide reception and support for the entire department. After she took up with Quentin, she pretty much refused to lift a finger for anyone else. And she didn’t just refuse. She copped an attitude. She let it be known in no uncertain terms that her station was improved and that any secretarial drudgery was now and forever beneath her.
If you’ve ever worked in an office, you know that women do not like that shit. They do not like a woman who doesn't pull her own weight. They do not like a woman who screws around because it seems to put their own husbands at risk. They do not like a woman who screws around with the boss, and leverages her intimacies into what looks like a better position. They may like all these things in soap operas and day-time TV, but they do not like them where they work. It's like the difference between a frog on the Discovery Channel, and a frog in your house. Too close to home is just wrong. I knew all this. It was painfully obvious to me, but there wasn’t a damn thing I could do about it. I knew that too.

Wednesday, April 28, 2010

Day 124 - Slouching toward Decrepitude

          I miss Bud a lot. I’m not really sure why this is. I haven’t really known him a very long time, and most of the time I have known him I’ve also known that he was sick and not likely to survive his illness. I had plenty of time, in other words, to prepare for his death. So here in the realization I ought to find resignation, acceptance, closure, and peace in the finality of it, but I don’t.
I want Bud back. Bud and I had an affinity that I can’t explain…or maybe can, but don’t want to admit. I find the things that I miss most about him are his least redeeming qualities. I miss his stinking breath. I miss his messy eating habits. I miss the tortuous way he got up off the floor to go do his business. I miss his general slovenliness and his abiding uselessness. When I think of all the things I miss about Bud I realize that, except for (hopefully) the bad breath, these are all attributes that I possess in equal measure.
I haven’t eaten a meal in recent memory that I didn’t get part of on my shirt. I’ve taken to telling people that at my age and with my history of colon cancer it’s important to keep an accurate record of what I eat. I keep mine on my shirt.
It takes me forever to get up out of a chair. It takes me an average of 28 seconds to get out of our car. I know this because my grandson times me. He got tired of waiting for me. He’s usually out of the car and inside our destination before I even get my seatbelt off. Putting a stopwatch on my torpor seems to him like a good way to occupy otherwise wasted time just waiting. He takes a lot of pleasure in announcing my times to the general amusement of the rest of the family. If I had anything to leave I would consider writing him out of my will.  
Now that I’m unemployed I just putter around getting in other people’s way. My wife often has to park me in a corner when we go shopping together so that I don’t impede the flow of traffic up and down the aisles of the stores. Bud and I were images of one another. We were old men sliding inexorably into decrepitude, and both grown useless as the tits on a boar hog. This is why I mourn Bud so much. It’s as if a big part of me has gone missing.
*****
There was a point in the midst of all the turmoil at Albatross where it seemed as though my star was in its ascendency. It was short lived. This happened when the new CFO, let’s call him Quentin Parks, asked me to assume the duties of the Operations Controller in addition to my own. This was to be a short term assignment that would be made permanent if I acquitted myself well. I planned to acquit myself well. There was, of course, a monkey wrench waiting in the wings for the opportunity to hurl itself into the mechanics of my forward progress. Let’s call him Rod Chandler.
Rod was a nemesis of monumental proportions, although I didn’t realize that at first. Rod was the new controller of the North Alabama plant. Rod had a career track in mind, and that track intersected mine. My problem was that where my career track was a passive thing that went where I thought the company needed it to go, Rod was actively engaged in mapping his track to take him where he wanted to be.
Where he wanted to be was where I thought I was going to end up if I acquitted myself well. So while we were both headed for the same destination, I remained blissfully unaware that I was in a competition. I had a huge amount of work and responsibility to take care of in order to acquit myself well. Rod on the other hand, less blissful and infinitely more aware, arranged to have nothing to do but lay track.
I know this because the old controller of the North Alabama plant complained to me about it. The old controller was trying to retire. He had announced his retirement, and the company had hired Rod to replace him. The old controller agreed to stay on and train Rod in the particulars of the job.
Even in the worst circumstances, this shouldn’t have taken more than a couple of months. Rod was, after all, a degreed accountant with years of experience in manufacturing as an assistant controller and controller. He didn’t need to be trained. He only needed to be shown where things were.
It took way more than just a couple of months though. This is what the old controller complained to me about. It was taking forever because Rod never got to the point where he was actually taking over the work. The old controller continued to do all the things he had been doing all along while Rod engaged full time in managing his career.
Now I don’t mean to suggest that Rod wasn’t doing any useful work. He probably was. At least he was doing work that seemed useful to the plant manager at North Alabama and to the CFO at the corporate offices because the work he did was deliberately tailored by Rod to appeal to their particular management sensibilities.
It was not, however, the work he had been hired to do. It would have been nice if the rest of us finance and accounting stiffs had the same luxury—to have some poor slob who was trying to retire do our jobs while we cherry picked tasks and projects calculated to make us look like geniuses to senior management.

Monday, April 26, 2010

Day 123 - Mourning Bud, Changing Plans

          We had Bud put down on Saturday. He was game to the end. It’s a hard thing to do—having a pet euthanized—even when it’s been an inevitable outcome for a long time. Bud is the second dog we lost to cancer this year. The first one, Ani, was also a fawn greyhound. Both dogs were fosters that we ended up adopting because they were so personable and engaging.
Well-meaning friends keep pointing out to us what a difference we made in the lives of these two hounds. Maybe so, but what they don’t fully realize I think is how much difference the dogs made in ours. Difficult as it is to have to palliate gentle and needful creatures like Bud and Ani through a terminal illness, I would not trade away one minute of time with them for anything I can imagine. I miss Bud’s crooked grin and his rank breath.
          My wife’s dad, Nelson, had a cardiac event over the holidays. It had to do with his congestive heart failure. He spent a week in the hospital, and now he’s in the middle of several weeks in a rehab facility where they are teaching him to walk again. The Parkinson’s got ahead of him while he was laid up. His muscles lost their memory. He’s no longer able to care for himself. This is making him crazy.
He’s a proud man. He’s always been the one to take care of everyone else. Having to be done for is an affront to the essence of the man. He hates the rehab facility. When he gets out he’s going to have to live with someone. He won’t be able to go back to his house by himself.
          We’ve decided, my wife and I, over the past couple of weeks that we will go live with her dad rather than with our son. That way at least Nelson will be able to go back to the house he is familiar with and in which he would be comfortable. He will have a caregiver during the day and a series of therapists and nurses throughout each week. My wife and I will run his errands, cook and serve his meals, and see to his needs the rest of the time.
*****
          The last, and the most disastrous, of the new regime’s initiatives at Albatross was a project to rationalize our pricing. What management hoped to accomplish was a simplification of pricing models by bundling options together into packages, much like the automakers do, and making a lot of commonly ordered options standard equipment. The result would be higher average unit prices as customers were forced by the bundling to purchase options they didn’t care about in order to get options that they did care about. The higher volumes of heretofore lackluster options would result in lower unit costs and increased assembly efficiencies. This is the way it works in the auto industry. Why shouldn’t it work the same way in ours?
          Here’s a possible reason why that might not work. The customers are different. Most automobiles are purchased by individual retail consumers. Most school fixtures are bought by school boards. School boards are elected. They answer to constituencies, and they also have legislative mandates and imposed budgets to deal with. School boards are vastly different from retail consumers.
Mark Twain once wrote, “In the first place God made idiots. This was for practice. Then he made School Boards.” Twain had equally disparaging things to say about legislators. School boards occupy a kind of middle ground. They answer to the voters on one side—a collection of individuals many of whom are the very idiots that God made for practice. On the other side school boards answer to legislators—fools, charlatans, and liars if Twain is to be believed. There is certainly plenty of evidence to support that view. So we have idiots answering to and at the mercy of idiots and nefarious idiots on all sides. What possible chance do they have of behaving in a logical and predictable manner?
          This was management’s problem. They had a model in mind for pricing options that depended on not only the logical and predictable behavior of our customers, but a logical and predictable behavior that mirrored that of individual consumers. Right out of the gate this model didn’t have a prayer.
Many of the Albatross natives knew this, but Boome and his imported lackeys had already instilled a healthy fear of reprisal in those same natives to the point that they were understandably reluctant to share this bit of knowledge. Once again arrogance and a management style that depended largely on threats and abuse would trump the tribal sensibilities of an old and well established organization.
          The results were spectacular, but they took a long time to play out. Because management’s attention was by then focused elsewhere, corrective action was slow in coming. The symptoms were disguised as cost overruns—something we were already experiencing and thought we knew how to address. What appeared to be high costs however were actually discounted sales prices, because what actually happened is that the idiots on the school boards didn’t think that they should have to pay higher prices to get optional features on their orders that they hadn’t specified and that they didn’t want.
Because we had made this stuff standard equipment we couldn’t easily take it off the things we were building. The sales people were put in the position where they either had to give the extra equipment away by discounting the base price of the buses or walk away from the sale. Discounts and concessions were the order of the day, but because they were written into negotiated contracts, they didn’t get reported as discounts and concessions. They were just lower than normal contract prices.
What showed up instead were lower margins that quickly translated into operating losses. The person who finally figured all this out was my genius cost accounting manager—by then so universally loathed that no one wanted to give him credit. Total cost of this fiasco--$35 million. Did Jed Boome get fired over this? Nope. A lot of people lost their jobs in the reorganization that followed, but Boome wasn’t one of them. I was, but not Jed.

Friday, April 23, 2010

Day 98 - The Fractious Path of Righteousness

          My wife and I took a van load of stuff over to our son’s place today. He’s got a shed where we can store some of our outdoor stuff like the pool toys, the barbecue grill, garden tools and so forth. Also we have never seen his place, something we really need to do in order to get an idea how much space we have to work with. It turned out to be a lot less than we had imagined, and a lot more rustic. We can make it work if we have to, but it’s going to be really uncomfortable. I can’t tell you how much I hate being in this situation.
*****
Naturally there ended up being a problem with the cracker brothers as our hose and fitting supplier, although in the final analysis it had more to do with us than it had to do with them—even though Ringcomme and Bloome went out of their way to make it the brothers’ fault. The whole incident to me was a case study in just how screwed up a business relationship can get when stubborn and egotistical managers insist on doing it by the book.
I had hired a new cost accounting manager. Let’s call him Eddie Sharpe. He came with good experience and good credentials. He was high energy and very knowledgeable in cost accounting issues. He was also ambitious. He got a handle on the cost accounting routines early on, and started looking for other things in which to get involved.
I was feeling overwhelmed by the strategic sourcing project so I let him take over the accounts payable department. It was supposed to be a temporary assignment. The plan was that the cost accounting responsibilities would expand as volume grew, and at some point we would be adding an accounts payable manager position. Letting Eddie run the payables section was an interim solution, but once he got the bit in his teeth there was no stopping him.
In a very short time Eddie became almost universally reviled. All the women in finance hated him, especially the payables clerks he was now managing. Most of the men hated him as well. Everyone thought he was arrogant, abrasive, and difficult. That much was probably true, but Eddie’s genius for accounting process issues was hard to overlook. As a cost accountant he had a genuine flair for tracing and isolating the pesky and sometimes devious drivers of specific costs. As an accounts payable manager he understood the intricacies of information flow. As a manager he had no finesse whatsoever. His principal people-handling skills were the peremptory demand, followed quickly by sarcasm and derision. He was a fantastic accountant with the people skills of Freddy Krueger.
Now enter the hose and fitting brothers. I had just negotiated our new agreement with them and we had signed a memorandum of understanding. Among the things they had agreed to was a 5 percent discount on any invoice we paid within 30 days, provided we paid all their invoices within 45 days. These were fantastic terms for us. Having 45 days to pay was nice. Getting a 5 percent discount for early payment was huge. We were all as happy as we could be.
Then Eddie started reviewing their invoices and decided that they didn’t meet our standards. He didn’t say anything to me about it. He just held payment. When we went beyond our 45 day payment terms, the brothers called up to find out what the hell was going on. I had given them my personal word that we could make those terms work. I hadn’t considered Eddie’s imperiousness.
Eddie was right, of course. The invoices were a mess, and that was a problem that needed to be addressed. The problem is that the brothers would have been happy to address it if we had approached them like the partners we purported to be in the negotiations rather than talking down to them and giving them ultimatums.
I figure a guy who pulls a knife on you, even in jest, is probably not a guy who is going to respond well to an ultimatum. What Eddie told them, in so many words, was that he wasn’t going to pay them at all until they got their invoicing act together. They reacted like any red-blooded American knife-wielding, 4x4 driving, bass boat towing, cracker-ass cowboys would do. They stopped shipping us product. They shut our production lines down—all of them—in the space of 8 hours. This is the point where I got a call from Ringcomme wanting to know what the hell was going on.
That phone call from Ringcomme was the first I knew that we even had a problem. You would think that, somewhere along the road to shutting down our production lines, somewhere in the midst of escalating tensions and deteriorating relations, someone would have had the good sense to tell me what was going on. You would think that, but you would be mistaken. All along this road to ruin Eddie was convinced that he had things firmly under control, and that before it was over he would have taught the red-neck hose and fitting brothers a valuable lesson in how to conduct business with a real company. All along that same road the red-neck brothers knew that they had Eddie, and Albatross, firmly by the short hairs, and if we weren’t going to honor our word, they were going to give those short hairs a good yank to teach us some manners.
Because our lines were shut down for a time, this became a much bigger deal than it had to be. It ended up requiring the attention of executive management. The problem and the fix were removed from my control. Apparently, even though I had got favorable terms from them and still enjoyed a good rapport with the cowboys, no one thought I was capable of getting them back under control. A way out was negotiated by the guy who eventually fired me from Albatross in the last desperate reorganization in bankruptcy. He had to give up the discount and promise payment in thirty days. We had to fix their invoices for them. In other words, he got significantly worse terms than I had in the original negotiation, a nice ironic twist to the whole sordid affair.
I would like to say that I learned from this that sometimes it is best to swallow one’s pride and even to ignore what you know to be the best textbook procedure in a given situation, and look at the common ground between fractious parties to find a way forward. I can’t say that because I didn’t learn that at all. I didn’t learn it for the simple reason that I already knew it. Anyone with the slightest little bit of sense at all would have known to look for ways to help the red-neck brothers fix their invoicing. They would have been happy to do it. We would have been happy to pay our invoices early to get the lovely discount they were offering.
We all wanted the same thing, but sometimes the righteous among us would rather be correct than actually fix a problem. They’d rather have the right answer than the right result. I know religious zealots who act the same way. They’d rather be theologically correct than to reach out gently to lead another soul to salvation. Being correct is a necessary and laudable thing, but it should not get in the way of the goals of the enterprise. What I learned from this little story is that, more often than not, these righteous bastards are the guys in charge, and they just ruin everything for the rest of us.

Thursday, April 22, 2010

Day 97 - Cutting Edge Negotiation

          If my wife and I are going to move in with our son, we’re going to have to downsize—a lot. We’ve got a 4 bedroom house filled to the rafters with stuff. This includes the attic and the garage where we haven’t been able to park a car for as long as I can remember. There is stuff in the garage, still packed in boxes that haven’t been unpacked since we moved from Arkansas to Alabama 9 years ago. The task is daunting. The garage sale will be the stuff of which legends are made. It’s already too late to start planning it. We are going to have to pray for and get a miracle. A job would be good too.
*****
I had an interesting exchange during the strategic sourcing negotiations with one particular vendor. It was a hose and fitting company owned by two brothers. They made all kinds of hoses for a variety of applications—hydraulic lines, fuel lines, water lines, vacuum lines, and all the associated fittings.
They had bought a building close to our plant specifically to service the Albatross account. They went beyond normal bounds to provide us what I considered to be stellar service. If we needed something in a hurry, they would fabricate it on the spot and drive it over to us in a matter of a few minutes. They made Albatross proprietary parts to our specifications as well as providing aftermarket and replacement assemblies made by other hose and fitting manufacturers. Their price structure was very competitive. They were committed to doing whatever they had to do to keep our business.
Negotiating with this company was a trip. The two brothers came along with the fellow who managed their local facility and dealt with Albatross on a daily basis. The manager wore a suit and kept a business-like and professional demeanor. The brothers wore jeans and knit shirts and cowboy boots. They were personable and relatively well focused, but they were anything but professional.
They were a couple of hard-scrabble country boys who were having a good time with their modest success. They weren’t trying to grow their company or groom it for a public offering or a sale or merger. They wanted to keep our business, but their primary concern it that regard was that they wanted to be able to buy bigger fishing boats and spend more time on the water.
What I’m suggesting is that their goals were modest and very concrete. They didn’t translate what they wanted into percentage increases in annual volume or improvements in margins or better overhead absorption. They wanted fishing boats and pick-up trucks.
They knew what they wanted and they knew what they needed to get from us and what they could afford to give up in order to get there. To my thinking this made them a lot easier to deal with than some of our other vendors who had grander schemes and better calibrated yardsticks, but no clear picture of what they hoped to gain.
The brothers were neither ignorant nor naive, although that is precisely what most of my colleagues thought. The younger brother actually pulled a knife on our materials manager during a break in the negotiations. It was meant to be a joke, although it wasn’t received very well, and no one thought it particularly funny. Other than a deranged low-life (or Bill, the last division president to fire me, or a fat chef), who brings a knife to a business negotiation? That was the consensus in our group anyway. It didn’t bother me that much, but then he hadn’t pulled the knife on me, and, in any event, I had already been desensitized to knife lore and cutlery flashing in my past working life.
In a couple of days the event, stripped of its context and amplified in its implied threat, had become company legend. Ringcomme and Boome in particular liked to hold the knife pulling incident up as a prime example of why we had to reshuffle our vendors and start doing business with professional business people rather than crackers and rodeo clowns. 
As it turned out though, in spite of their lamentable social graces, the brothers were excellent vendors. When we started talking numbers, they showed themselves to be astute and to have a large amount of quantitative data committed to memory. They were emphatic without being hardnosed. They were more than willing to horse trade, but they knew exactly how far they could go and when we got them there they dug in with all four heels.
I thought we did very well by them, and they were so far ahead of their competition across the board that they became our vendor of choice for all our hose and fitting needs in spite of the ‘knife pulling’ incident. They were so far ahead in the rankings that not even Ringcomme could undo our recommendation. And boy, he really wanted to.

Tuesday, April 20, 2010

Day 96 - One for All, and All for Naught



          I told our landlady today that we would be moving out by the end of January. This should give her plenty of time to find a new tenant for the house. I hated to do it, but time is growing short. It sure looks to me like nothing good is going to happen anytime soon on the job front or in the economy.
Last year I put on a seafood boil for the neighborhood for New Year’s Eve. It was a great party. Everyone brought their own beverages and desserts and appetizers. I did a huge pot of Low Country Boil that included shrimp, crab, scallops, clams, mussels, lobster, kielbasa, potatoes, corn-on-the-cob, and onions. I put out bowls of drawn butter, cocktail sauce, tartar sauce, and a chipotle rĂ©moulade. We dumped the cooked seafood onto a central table covered with newspapers, and everyone just dug in. It was fabulous.
Everyone had a great time. I want to do it again this year—kind of a last hurrah before I have to pack up my stuff and run to safety. The neighbors have agreed to ante up on a ratable basis so I don’t have to pay for the whole thing like I did last year. I love this place.  
*****
The next big project we launched at Albatross was the strategic sourcing initiative. This was a very big deal. It came under Ringcomme’s supply chain umbrella, but it was actually initiated by the new CFO, another of Jed Boome’s cronies from the crane company days. The CFO, let’s call him Wylie Lovett, was a smooth talking, silver haired, sharp dressed man who exuded class and competence. He made everyone, including me, feel as though we were on the right track. He had grand ideas rooted in good sense that we vetted thoroughly before implementing. Everything seemed so rosy for a time.
We hired a consulting firm to shepherd us through the process. They sent a squad of high energy kids down from Chicago—all bright, focused, and confident. Management picked Albatross employees to be involved in the project. Before we finished more than a hundred of us were involved in one aspect of the project or another.
Central to the project were a handful of commodities teams. There was one for wood and fiberglass, one for hardware and fittings, one for metals and extrusions, one for rubber and plastics, and one for MRO or maintenance and supply items. Each team had eight to twelve members from all different areas within the company.
The teams were to stage a supplier conference, post a list of items they proposed to buy, solicit bids from selected suppliers for the items on their list, visit the suppliers to determine their suitability and capacity to meet our requirements, negotiate with suppliers to achieve the best overall performance in terms of quality, service, and price, and select the best overall vendors. The idea was to save in total costs, to partner with suppliers to provide the best possible products in the most agreeable time-frame to our customers at the lowest possible cost to us.
To achieve these laudable goals we put in a tremendous number of hours beyond what it took to do our usual jobs. We developed lists. We made phone calls. We studied cost structures. We mapped product movement. We developed and published specifications and drawings. We attended classes in communication and negotiating. We wrote, developed, and rehearsed presentations. We did role playing exercises. We went to endless meetings. We beat ourselves half to death for the company because the promise was—the promise that we believed with all our hearts—that we stood to save tens of millions of dollars over the next five years if we did a good job. That was tens of millions of dollars that we absolutely needed to save in order to remain competitive and profitable.
I got tapped to join the MRO team. I didn’t want to do it because, for one thing I didn’t even know what MRO meant at the time. Besides I felt I’d already been assigned more than I could hope to accomplish is a lifetime. Since starting at Albatross as controller of the boat division, I’d also assumed responsibility for all the commercial fixtures products, and then, when the shared services controller was canned and the school business controller left for greener pastures, I got their jobs added to mine as well.
I calculated that if the company paid me the salaries of all the controllers whose duties I had assumed they would have to give me an annual wage of $540 thousand. If they also gave me just a quarter of the salary they were paying Robert Lester, who was still eating up a tremendous amount of my time trying to get an understanding of the boat business, I would have been the highest paid individual in the company—knocking down nearly $630 thousand.
I’m not complaining about the money, but I did have plenty to do without getting immersed in the strategic sourcing project. I tried to get out of it. I went to the CFO and made a pretty good case I thought. Rongcomme made a better one against me. He wanted me on a team, and he had way more clout than I. I started going to the MRO meetings.     
It was a huge commitment of time and effort, but I ended up enjoying it a lot, especially when we got to the negotiation phase. There was something about sitting across the table from teams of supplier executives and hammering out deals that really tripped my trigger. The hours were incredibly long and arduous, but the satisfaction quotient for me was as high as it’s ever been in my working life.
If I could do that all day every day I’d be a happy fellow. I think I’d be pretty successful too. I mean I think I’m good at negotiating, good at overcoming objections, finding common ground, making persuasive arguments, getting to ‘yes’. I’m not a natural. It didn’t come easy to me because I’m naturally shy and reticent. I don’t like meeting and interacting with strangers, and I don’t like having to put on a performance. But with practice I can get really good at something I enjoy, and I enjoyed this…a lot. It would have been even better if, after the project was done and we had new agreements with a new slate of suppliers, it had meant anything at all to any of us.
Like so many other things I’ve been involved in at work over the years, executive management sabotaged the whole deal. In the end no matter what vendor we thought offered the best hope of helping us reach our goals, Ringcomme picked vendors based on prior relationships he had with them. The whole sourcing initiative was just a shell game. We paid the consultants $5 million and change, paid another bucket full of money on travel and staging dog and pony shows, put in an astronomical number of hours doing homework and taking meetings, negotiated our hearts out, and we could have saved all that time, money and effort by just asking Ringcomme who he wanted to do business with.
So we didn’t save any real money. We just spent it. Even the vendors who gave us price concessions did so based on volumes we never achieved. Favorable payment terms that I personally had beaten out of a goodly number of suppliers never materialized because we couldn’t even meet the extended payment schedules. We didn’t have the cash. We’d spent it on consultants and projects.

Monday, April 19, 2010

Day 95 - Variance Schmariance


          We took Bud back to the vet today for another round of x-rays. We were clinging to the hope that what looked like osteosarcoma on his shoulder would actually turn out to be an infection. To this end we had him on some really strong anti-biotics and anti-inflammatory drugs. If our hope turned out to be true the shadow on Bud’s x-rays should have been markedly diminished. It was not. This is as close as we can get to absolute certainty without getting a biopsy. We don’t see the need to put him through the additional pain just to be certain of what is by now obvious to us. Bud has bone cancer, and he is rapidly failing. Still he offers no complaint. He continues to eat well and seems to enjoy his walks as much as ever, although he is noticeably slower.
*****
The new president at Albatross, let’s call him Jed Boome, went about the business of stacking the local executive management posts with his buds and cronies from past companies. Notably, we got a new CFO and a new supply chain manager. Then it was back to business as usual with the new guys in charge. Just because they were new didn’t mean they were any smarter or any more qualified to run the company as they soon proved.
Several new initiatives were started that accomplished, in the final analysis, not much more than stirring the pot. That may have been their sole purpose all along because nothing makes a cook look more like he or she is doing something useful than stirring the pot, but as any cook will tell you the main thing it does is keep things in motion so they don’t stick to the bottom and burn up.
To keep anything from sticking to the bottom and burning we started a huge strategic sourcing project, an outsourcing project, and an option optimization project. These were all touted to streamline operations, save buckets of money, and return us to profitability. Instead they paved the way to our next major reorganization.
The first of these initiatives to get off the ground was the outsourcing project. The new vice president in charge of supply chain management, let’s call him James Ringcomme, decided, probably because he’d read somewhere that this was a good idea, to start having all the parts that we had been fabricating in-house manufactured and delivered to us by outside vendors instead.
No studies were done, no detailed cost analysis undertaken to determine whether or not this made any sense in our particular situation. It was just done. Not only was it done, it was done as quickly as humanly possible, and accompanied by a great deal of yelling and threats when it still didn’t happen fast enough to suit Ringcomme.
Yes, Ringcomme was yet another of those over-energized, take-no-prisoners managers who substitute hysteria and abuse for good sense and reasonable attempts at communicating ideas. Ringcomme burned through a rapid succession of competent lieutenants by such antics as calling them at two o’clock in the morning to give them unreasonable assignments and then taking them to task in front of the rest of the staff the following day for not having accomplished the job he gave them to his satisfaction.
The purpose of outsourcing is to save total costs. You expect to get some uptick in productivity, in this case reduced labor cost by the amount of labor normally input into the fabrication of the parts now being outsourced. This savings would be offset by the increased cost of materials now purchased from the outsource vendors. The labor that would have been applied to the parts fabrication process may then be applied to assembly instead, hopefully earning a better return.
The better return is essential because there is not a direct trade off between the labor saved and the additional materials costs. The additional materials costs, all other things being equal between Albatross and its parts vendor, will now include the profits of the vendor. In other words if Albatross doesn’t earn more efficiently on its re-directed labor, there is no savings and no reason to outsource. This is not rocket science, but it is complicated and difficult to measure. It requires some sophisticated analysis and intelligence to do properly.
Unfortunately, at Albatross and many other places I have been associated with, managers do not do the kind of sophisticated analysis that is required to make these kinds of decisions. What they do instead is skim through popular business literature to get an idea what the current buzzwords are, and then attempt to manage to those buzzwords.
We even had one manager who made it his business to learn what the president was reading at the time so he could pepper his conversation with appropriate buzzwords from the same book. He never actually read the books himself just skimmed the chapter headings to pick out the buzzwords and get some inkling as to what they meant.
In our case the buzzword Ringcomme was most enamored of at the time was outsourcing. Outsourcing had been touted by several large auto makers, and Ringcomme figured what was good for them would be good for us, so outsource we did. Because we did it without sufficient forethought and analysis and because we did it quickly, it failed miserably.
Our total costs did not go down. They went up. We did not post gains in the efficiency of our assembly operations. Instead we had operators standing around waiting for parts that our vendors couldn’t deliver because, among other things, we had done nothing to ensure that our outsource vendors had the capacity to meet our demands. The materials cost of a 45’ boat increased by nearly $20,000 within several months. The labor cost on the assembly side remained virtually the same.
When it became obvious that something was seriously wrong with our new cost structure, Ringcomme began trying to manipulate the accounting numbers to deflect the blame. He had taken a savings number to the board to get them to approve his outsourcing scheme. He came up with this number by getting the vendors to commit to advantageous pricing at a given (aggressively estimated) volume. We never reached those volumes so the vendors were under no obligation to meet the advantageous pricing that Ringcomme had in effect taken to the bank.
When the smoke cleared the new and advantageous prices were established in the system as the standard cost for the associated outsourced items. Whenever we were invoiced for an amount greater than the standard, the situation that usually attained because our volumes were too low to get the standard prices, the system would spin off an unfavorable purchase price variance for the difference.
The purchase price variance account is meant to allow a company to track the performance of its purchasing department. If they can negotiate better prices than the standard they get a favorable variance, and that reflects well on their performance. If they secure prices that are greater than the standard they get an unfavorable variance that reflects poorly on their performance. Since the purchasing department belonged to the supply chain manager, Ringcomme, these unfavorable variances reflected badly on him. His solution to his problem was to direct the purchasing agents to go into the system and increase the standard costs in order to make the unfavorable variances disappear.
Standard prices are usually only changed once a year and under the direction and control of the accounting department. Standards that are fixed over time allow you to get meaningful data out of your variance accounts. Changing the standards changes the total standard product costs and therefore the standard margins. What Ringcomme was doing was shifting the margin erosion caused by the ill-concieved outsourcing project into the standard cost structure at the same time he was claiming that he had saved the company a ton of money.
When we caught him at it, and called him on it he put on an innocent act that was worthy of an academy award. He promised not to do it any more. Not only did he continue to do it, when one of the purchasing managers refused to bump up a standard cost for some critical hull fittings, Ringcomme had him fired for not being a team player. Naturally he had to give him a big severance package to keep us out of a wrongful termination suit, but we did after all have all those substantial outsourcing savings so we could well afford the severance.
Of course it didn’t matter to the company whether the extra costs were in the variance accounts or the standard cost accounts. Either way we had the same additional costs to deal with. You’d think if Ringcomme was serious about doing a good job, serious about making the company more competitive, he would have been attacking those costs with dogged energy. Such was not Ringcomme’s bent however. He was all about smoke and mirrors. All his energy went to making himself look as good as possible. There was none left over for actually doing the right thing.

Thursday, April 15, 2010

Day 94 - Crash and Burn































          There are ten days until Christmas, and I am not in the holiday spirit. One of my good friends at Albatross was the IT director. He was (and still is) a smart, sensible, and unassuming fellow full of good humor and grace. He used to wear a different Christmas themed tie to work every day from the Monday after Thanksgiving until the Christmas break. I thought this was a wonderful tradition and worthy of emulation so I started doing it too. I continued to do it at my new job. I won’t be doing it this year, but I do stare wistfully at those ties every morning when I’m in my closet picking out a t-shirt to wear with the shorts that I have worn every day for the past two months.
*****
          The boat division at Albatross was not the only division for which Richard Hardin had grand designs. He also intended to create a commercial seating division. The idea was to leverage our capacity and expertise in school based applications to create both individual and stadium seating solutions for non-school applications. These would be more up-scale, comfortable, and expensive than the school products and would both broaden our markets and improve our profit margins.
          Development projects had been launched and project managers put in place. A new head engineer was brought on board so that the old head engineer could take over the commercial division. A new controller was hired for the commercial division. Things were popping. There was a lot of excitement in the air. We were spending money like water on new product launches including new office furniture suites, new stadium seating packages, a new classroom suite aimed at private schools and universities, and two new boats. It wasn’t very long before every project was over budget and in trouble.
          At the outset I wouldn’t have thought it possible for a company like Albatross to burn through $600 million in such a short period of time. The failures were legion and the timing even worse. Every project went over budget and every new product went over its target unit cost. This was a huge problem because they all had to compete on price in the marketplace. The markets had all gone to hell for a variety of reasons—not the least of which were the tragic events of September 11, 2001.
          It seemed we couldn’t get traction with anything we were trying to do, and what products we did manage to sell were sold on such skinny margins they made hardly a dent in their astronomical development costs. To make matters worse almost everything we sold came back with serious warranty issues.
          Bad as things were for the commercial fixture and boat divisions, almost everyone at Albatross remained calm and composed, secure in the knowledge that we could always depend on the school product sales to keep us afloat while we sorted out our problems. This or course was precisely the time that the bottom fell out of the school fixtures division.
          The problems at the North Alabama plant had continued unabated and largely unnoticed. Everything imploded in one catastrophic day when our largest school system customer rejected a huge shipment of furnishings destined for a dozen or so new schools being built in a high growth population center. This was the inventory that had been stacked in the warehouse in North Alabama—the stuff that wasn’t shipped because it wasn’t finished. When DeLeon couldn’t delay shipment any longer he sent the stuff out late and incomplete. It was so far below standard that the school system refused the whole lot out of hand, and cancelled all their pending orders.
This presented a number of immediate compounding problems. First and foremost was the immediate loss of about $60 million in revenues, revenues that were not going to be recovered easily. The second problem was that the returned items were going to have to be fixed.
They couldn’t be fixed in North Alabama because they obviously didn’t know how. North Alabama had its own problems to address. That would be the third problem, but the second was more immediate and more critical because we needed to turn that inventory into cash as soon as possible. The solution ended up being to load it all into trucks and haul it to the Mid Alabama plant to be reworked. When we started doing this we found that the number of hours required to fix the items was nearly the same as the hours it took to build them in the first place. Thus ended the fatal Albatross complacency—the belief that the school business would keep the rest of the company afloat.
As you can probably imagine, this debacle caused quite a shake up in executive management. Richard Hardin was forced to step down in the UK. Not surprisingly he had made some other costly missteps in the European operations. The Albatross problem was the final straw. Personally I think it was his arrogant management style that was his undoing, but no one is listening to me.
Robert Lester, the U.S. president of Albatross had to step down as well, although he didn’t really go anywhere. The directors brought in a new president, one who had recently presided over the dismantling of a crane company, and Robert moved over to the boat division to become the sales manager. He moved at the same salary he had been making as president, which probably rankled a few souls. I know it rankled me.
While Robert’s duties and responsibilities had shrunk considerably, he was making north of $350 thousand a year. Meanwhile my duties and responsibilities had more than doubled in scope, but adjusted for inflation, I was making less than when I started. To make matters worse Robert came to my office every day to get my advice and opinion on every decision he had to make in his new reduced capacity.
Now I have to say that I actually liked Robert. He was an engaging and personable fellow, and he certainly tried hard. It’s just that when it came to actually moving the company forward, Robert was just taking up space. He once said to me in the course of a rambling philosophical soliloquy, “You know, as long as I live I don’t think I’ll ever understand what went wrong at North Alabama.” That’s too bad really because almost everyone else did know, and almost every one of them blamed Robert for being asleep at the switch.
I guess it should go without saying that DeLeon was forced out. The only surprising thing about it was that he was allowed to leave under his own steam—that is to say, still walking. He stopped me in the hallway to say goodbye. He told me he’d given it a good run, but it was time for him to move on and try something different.
I asked him what he had lined up, and he said nothing definite. He was just beginning to explore his options. I personally thought that one of his options ought to have been scrubbing the restrooms at Albatross while the production employees took turns kicking and insulting him, but apparently you get better treatment than that when you cost a company millions of dollars. The bigger the screw-up the more likely it is that you will be allowed to walk around with your dignity intact.
A few weeks later I read in the paper that DeLeon was teaching a course in industrial management at one of the local community colleges. Knowing that he was passing his special brand of production know-how on to the next generation of plant managers gave me a sick feeling in the pit of my stomach.

Wednesday, April 14, 2010

Day 91 - The Forest and the Trees

          This was another day without anything of interest in the job search, although I did get a call from Gina, the HR manager who had to witness my termination. She got canned too, several weeks after my last day. She called to make sure that I had applied for unemployment benefits. I have not. I never have. I never thought I would, and it wouldn’t have occurred to me in any event that I could apply for unemployment while I was still getting severance. Not so, according to Gina. Severance, apparently, is not earned wages for unemployment purposes. Severance is not owed compensation for work performed. Severance is largesse. It is a gift, although I never would have characterized it as such. I might call it hush money, a bribe not to try to do the right thing, but never a gift.
          What unemployment benefits I receive will, of course, be charged against my former employer’s experience rate. Knowing this I have decided to apply. I qualify to receive $275 per week, a paltry sum compared to my former earnings and my severance, but decidedly better than the zero I will be getting after January. It won’t prevent me from having to move, and it won’t even cover my expenses after I move, but it will keep me in groceries and gas money while I continue to look for work. It is surely best to get it in place now before I really need it.
When and if we have to move, there is another place to live besides Brian’s house in Lakeland. That is with Madeline’s dad, Nelson. Nelson lives on Florida’s east coast near one of Madeline’s sisters. He has some fairly serious health issues and he is nearly 90 years old. He doesn’t want to go into a home or an assisted living facility because he doesn’t want to be surrounded by ‘old’ people. If Madeline and I were to move in with him, we could help with his care, run his errands, and otherwise ensure that he is able to stay in the home where he is comfortable and where he can still exert a certain amount of independence and control over his life.
*****
          The practice of mislabeling inventories set Albatross on the path to its first of several reorganizations while I was there. DeLeon acted in concert with his lieutenants, one of whom was the production manager at my division. He was the guy being made to look bad by Ben’s premature completion of parts. What was actually happening was that the cabinetry and other parts for the boats were made in the main plant on one side of the street, then brought to our side of the street to be installed in the hulls. These parts were being shipped incomplete. The boat division was absorbing all the rework hours to complete parts that had been shipped to us in an unfinished state by the furniture division.
          The furniture division looked good. The boat division looked bad. DeLeon had shifted his problem to a place where, if he couldn’t make it go away, at least he could make it someone else’s fault. The boat production manager was complicit in all this. As a reward for fading the heat he was put in charge of a larger plant in the north end of the state, and the boat division got a new general manager. Let’s call him Jim Poole.
          I was actually consulted on this change, although for what reason I have not a clue. The HR director called me one day to ask if I knew anyone who had the experience to head our division. It turned out that I did know a fellow who had impressed me with his background and abilities in production management at Quilnutz. I gave his name to the HR director and then promptly called him myself to alert him to the opportunity. He was interested.
          After a week or so of dithering on DeLeon’s part we hired someone with no boat experience. I had to wonder why. The HR guy indicated to me that DeLeon had never seriously considered the fellow I had suggested. In fact he had already decided on Poole before anyone bothered to ask me if I knew a qualified candidate. I can only assume that DeLeon wanted another name in the hopper to make it look like he had chosen Poole from among a number of qualified candidates.
          As it turned out Poole’s principal qualification was that he was even more ignorant than DeLeon, a happenstance that I’m sure gave DeLeon a comfortable assurance that he wouldn’t have any difficulty getting Poole to buy into his harebrained schemes.
          Poole turned out to be a change agent. It’s hard to believe, looking back on it, that someone so gloriously inept could exercise enough influence to change the course of an entire company, but he did, and not for the better either. That’s another story, though.
          The most momentous thing that happened next had to do with the production manager that Poole replaced—the one who was sent to the North Alabama plant to preside over a doubling of capacity there—the one who along with Ben DeLeon managed to tank the company for the first time.
          The school fixtures business was Albatross’s bread and butter. School desks, lockers, and bleacher sets were the core products and the reason for Albatross’s success and longevity. While Richard Hardin had everybody from the board of directors to the janitorial staff committed to expanding into the commercial fixtures business and doubling the boat business, school fixtures would remain Albatross’s most important segment.
Everyone knew this. Everyone believed in the school business as the bedrock on which Albatross was built. Everyone expected the school business to remain stable, viable and strong. This faith was so deep and abiding that in effect everyone believed that we could royally screw up the commercial fixtures and boat segments, and no matter how bad things got there, the school segment would always be there generating the cash and profits to keep us not just afloat, but healthy. Everyone underestimated Ben DeLeon’s capacity to bring the 75 year old company to its knees.
          The plan was to move production of the largest, most complicated, and highest volume stadium bleachers to the north Alabama plant in order to make room at the main plant for the new commercial fixtures lines. This was to reassert Albatross’ competitiveness in its usual markets, which had been eroded somewhat by the recent entry of two new companies into the school fixtures business.
Moving production to North Alabama presented a raft of problems that it would seem, in retrospect, were not adequately considered beforehand. The North Alabama facility was a sleepy little backwater by comparison to the main plant. It had never produced a bleacher set, let alone anything as complicated as the one we were moving there. It had only ever made our simplest and lowest volume school desks. It had never produced anything in the volume it would now be expected to produce.
If anyone had thought about it at all, they would have realized that they were going to exhaust the available local labor supply to get to the production volume we wanted, and would then have to go in search of production employees at the local rehab facilities, half-way houses, and homes for the mentally challenged. To compound the staffing problem, there were no clearly documented work instructions detailing the processes required to assemble the bleachers.
          To sum up, we were going to double production of a product at a facility that had never built that product before, a facility with inadequate access to staffing resources, with little or no training resources, and with inadequate documentation of assembly processes. This effort was going to be overseen by a manager who had already demonstrated that he was unable to recover from manufacturing bungles and snarls foisted on him by his boss, Ben DeLeon.
          It seems obvious, when you state the problems that succinctly, that this was a disaster in the making. You might be tempted to excuse those in charge for failing to recognize this before the fact because hindsight is always so much clearer and easier than foresight, but the fact is that many people knew this was going to be a serious problem and tried to sound the alarm before the whole thing went off the rails.
          One fellow in particular, the Alabama controller who had hired me and had, prior to assuming that job, been the controller of the North Alabama plant, circulated a memo stating clearly what was likely to happen and why. He was not just ignored; he was roundly spanked by the powers that were.
          No one wanted to hear about failure. Mention of failure was politically incorrect. Probably everyone in a position to do anything about it was afraid to bring the subject up to Richard Hardin because they already understood that the result would be another of his blistering counseling sessions. Eventually the Alabama controller was fired for not being a team player. Talk about irony.
          Like anything huge, this disaster took a long time and a lot of money to build. All the while it was tended lovingly by DeLeon and his new plant manager. There were some sign posts along the way, but they were largely ignored. There were some rumors and rumblings heard occasionally from long term employees in North Alabama who could see what was going on, but who had also seen what happened to the Alabama controller for daring to mention his reservations.
          The biggest, the most glaring, of these sign posts was the huge build up of undelivered inventory at the North Alabama plant. It couldn’t be delivered because it wasn’t finished. It was classified as finished on the balance sheet of course, but it wasn’t—DeLeon’s favorite trick come to roost in a new place.
No one in the corporate finance management group saw this alarming build-up because they were too busy chasing accounting minutia for the UK management group. The UK boys liked a robust analysis. They liked a lot of detail. They liked their charts and graphs and trend lines and a whole raft of other analytical esoterica. It was a classic case of not being able to see the forest for the freaking trees.