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TOC customer Interview




TOC customer Interview with Craig Mead, Book Manufacturing 
Vice President Finance, Thomson-Shore, Dexter, Michigan


DW: Tell me about Thomson-Shore. 

CM: We're in Dexter, Michigan, just outside Ann Arbor. Approximately 40% of our customers are university presses. We would be considered a short-run printer, meaning we print runs of between 200 and 10,000 copies. We're also an ESOP company-98% of the stock is owned by the employees. We've had as many as 300 employees. Right now we're at 280.

DW: 1 understand that everybody in your company has read The Goal.

CM: We made it mandatory reading for all our employees.

DW: Top to bottom?

CM: Yes.

DW: So what was the problem you were trying to correct with the help of The Goal

CM: Our main problem was with on-time delivery. We also had problems with a department-type mentality at the company. People had a hard time looking beyond their departmental responsibilities. Everybody was functional in thought.

DW: Were you able to turn things around?

CM: Yes. Before we started, we were at around a 70% on-time delivery. After implementing the TOC policies and practices, we got up to around 95%.

DW: Your first step was to have everyone read The Goal?

CM: Yes, that was the first step. The next step was to bring in a TOC consultant. We put 30 people through a three-day training course on Theory of Constraints. From there the leadership group identified what we thought was the constraint and began to follow the Five Steps.

DW: What was the constraint you identified?

CM: In our business we have two areas of major investment. One is in the press room and one is in the bindery. We basically settled on the press room as the constraint and began to manage the business with that in mind. As we focused on the constraint and began to subordinate everything else to that, we began to break down departmental barriers. It took a lot of education and training. We developed our own internal course for employees. Basically we took the three-day course, pared it down to about an hour, and had every employee go through that. The course dealt with the major concepts of constraint management, subordination, flowing work, and re-moving localized thought processes.

DW: What changes did you make in the press room? 

CM: We chartered some teams to look at the various products that we made and began to challenge assumptions on how we use the presses. We make two types of books, a perfect-bound paperback book and a casebound hardcover book. We have sheet-fed and web presses. We began to devise rules on what type of books went on what pieces of equipment, to maximize the capacities of the equipment and to meet customers' needs. By creating new standards we eliminated an incredible amount of waste. Before, we were constantly reworking jobs to meet what we thought were customer needs. In reality it was forever putting us farther and farther behind. Rethinking all our assumptions forced us to discipline ourselves and to maximize each component in the press room. That allowed us to flow the work more consistently.

DW: How did you involve the employees? 

CM: Employees at Thomson-Shore have the ability to influence the standards and the way work moves within their area of expertise. When you're strictly localized in your thinking, every person wants the job designed to benefit themselves. And that creates chaos. Before we did our TOC implementation, we could never agree on anything without a long, involved discussion. If we wanted to make a change we had to get 12 people in a room and then try to reach a compromise on everything. We could never please everybody. Having everyone read The Goal helped everyone understand that the basis for everything we do wasn't localized thinking anymore. So, for example, if a job had to spend a little more time in the bindery, that's okay, as long as that's what's most effective for the press, which we had identified as the major constraint. In the end we got the throughput that we needed.

DW: As a finance guy, what was your specific contribution?

CM: The Theory of Constraints is built on the premise of breaking the barriers of the cost model of accounting, and we were a heavily cost-driven organization, as a lot of manufacturing companies are. Everything in the company was designed as the cost-system would dictate. That's where 1 began to add value - by helping to develop different measurement tools that we could use instead of the traditional cost tools. And that's what 1 believe began to drive real change in the organization. We are still struggling on the sales side but we've made progress in breaking away from the cost method of sales and estimating.

DW: How does that work?

CM: The cost method of accounting creates departments and it allocates indirect overhead expenses. TOC, however, says you're one big happy family, you have fixed expenses and you have variable expenses. Your variables are your materials and your fixed is everything else. And sitting around spending all your time trying to figure out how much electricity and square footage of air conditioning and cooling goes to the press room, how much to the binderv and the prepress and how much to the office doesn't help you manage your business.

DW: Because it distracts you from the goal.

CM: Yes! Of meeting the needs of the customer. And flowing the work in a timely fashion. When we began to concentrate on making the work flow, that is, maximizing the capacity of the press room, and subordinating everything else to that, we began to improve our on-time delivery. The critical issue is how you measure the performance of the organization. We use two methods.


TOC customer Interview with Craig Mead, Book Manufacturing 








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Published on: 2009-06-14 (9802 reads)

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