Terry, an Assembler, picked up the defective proximity sensor, put it in the bench vise and crushed it. Two hours wasted, he thought, troubleshooting and fixing the problem! Terry loved building and tuning packaging equipment to the customer's specifications, but he was really annoyed when defective components caused problems. At least, that particular sensor would cause no more problems; he smiled as he tossed the mangled electronic component into the waste bin. Little did he know how wrong he was!

Rebecca, the Operations Manager, had gone walk-about on the Assembly shop floor that morning and watched Terry destroy the sensor. She stopped and asked when that machine would be finished.

"Oh, we are just cleaning up now. This will be ready for the shipping department in about one hour," Terry responded. "We should change the brand of sensor we use. These Magnatex ones might cost less but it can take a long time to troubleshoot when there is a defective one," he added, as he pointed at the waste bin.

"I was surprised you destroyed it," Rebecca answered. "It seems to me that if you returned that sensor to the Storeroom, the Storekeeper would return it to the vendor; we would get a replacement; there would be a record of the defect and we would be able to communicate the need for improvement to the sensor manufacturer more effectively. Now, we will still say there is a problem, but that point won't go anywhere without the part."

"That isn't how it works at all," Terry answered, now feeling a little exasperated and thinking that what was needed was someone tough enough to whip those Storekeepers into shape, not a woman from the Pollyanna school of cheerful management. "Quality isn't the only problem. We also have availability issues. If I returned that sensor to the Storeroom, they would put it on a problem shelf for return to the manufacturer, which never happens, and then Stores runs out of proximity sensors altogether. Their solution is to re-issue the defective ones. There are 17 proximity sensors in the machine and, soon, some Assembler will be troubleshooting another new machine because Stores deliberately issued a defective sensor. That is a serious problem which I just eliminated by destroying that sensor. You should be thanking me," he finished, thinking that she would be gone within three months.

"It shouldn't work that way; thanks for the insight," Rebecca mumbled as she walked on, wondering how much of Terry's comments were caused by frustration and how much was based on fact.

Rebecca didn't even return to her office. She wanted to get the Storeroom perspective on what she had just heard and Mohammed, the Storeroom Supervisor, was letting her have it. "Every wrong decision in the company eventually shows up in the Storeroom," he started. "You made the assemblers responsible for the quality of what they produce. It's a great idea, but some of those folks are not that good at troubleshooting. Sometimes, Terry will take every sensor out of a machine he built and return all of them to the Storeroom and ask for replacement ones, hoping that will fix the malfunction. Often, there is nothing wrong with any of them. The problem is something else completely. We can't return sensors that work and have already been installed to a vendor just because the Assemblers are not strong troubleshooters. We test every sensor that is returned from the Shop floor. If it really is defective, it gets returned to the vendor for credit. Usually, the sensor passes the test and we put it in a Quality Assurance location, not back on the shelf. After that, QA is supposed to review and determine disposition, but they can't ever find the time. Jim in Purchasing told me that there is only one manufacturer with a sensor approved by our Engineering department for this application. The manufacturer is in Europe. A distributor brings a sensor in for us, but we have to order batches of 4,000 three months in advance. Predicting the number that will be used in machines is relatively straightforward, but Purchasing doesn't plan for the sensors required by our Service Department or After-market Sales. Those guys are always stealing our parts. So, if there are none on the shelf, we probably would ask the assembler if he would accept one from the Quality Assurance location; but it wouldn't be a surprise to him. The part wouldn't be packaged and, besides, the wires would have been cut to length for one of our applications. We are holding the whole thing together and Assembly blames us for all of their problems. Sometimes, we offer one to Terry and he says he'll find one out in the Assembly bay. Then, he will ask all of the assemblers if they have any, and some guy who noticed Stores was running low, will have twenty in his toolbox. Everyone acts like it's a lucky thing that he managed to stash some, when really it just aggravated the problem. In fact, Jim in Purchasing has a stash too, so that if you go in saying the shop is coming to a standstill because we are out of proximity sensors, he can produce them instantly and be the hero. Everybody loves to be the hero, ride in and save the day in the nick of time. Nobody is too interested in preventing the problem. You should be thanking us for sorting through it, not blaming us for those guys' mistakes."

"I'm not blaming you; I am trying to understand what is really happening and why Terry thinks it is less costly to destroy a sensor than return it to the Storeroom. Thanks for helping me see more of the picture."

Although this sensor was only one of the 12,000 parts in the ERP system, Rebecca decided to follow up with the other people involved. After spending an hour with Engineering, Purchasing and Quality Assurance, the situation seemed more complex than ever.

Rebecca thought about her predecessor, whom she had met briefly. He had said that everything he tried to fix got worse until, finally, he just sat in his office, unwilling to do anything. Now she felt that the sensor issue was as tangled as Medusa's hair and anything that she straightened out immediately disappeared back into a knotted mass of slithering snakes defying order and logic. Her predecessor had stared at Medusa and had been turned to stone.

Peter, the Engineering Manager, had explained that there were other proximity sensors that would do the job and were readily available; however, they were not interchangeable from the perspective of form, fit and function. Besides, the Magnatex sensors were the lowest cost by far. They were a different diameter than any of the competitors', falling midway between two standard sizes, which meant that if you changed sensors, you would either need to drill all the mounting holes larger or else use the smaller sensor and find or make oversize nuts. In either case, a different part number would be required.

Hershey, in Quality Assurance, was not that happy with Rebecca's visit. He explained that it didn't mean much when the Storeroom tested the sensors because their test didn't really simulate the working condition environment. Furthermore, the Storekeepers were testing sensors that had been issued to the Assembly area, probably installed in a machine, with the wires cut to length. We couldn't throw them out; we couldn't send them back; the best solution was to keep them in QA and release them on an exception basis as required for specific applications.

"Unacceptable," had been Rebecca's only response as she turned and headed towards Purchasing. Jim in Purchasing looked despondent. "The ERP system says there are plenty of proximity sensors available, but that is because QA was set up as an "available" location for planning purposes. Originally, it was set up as "not available", but when we ran the Material Requirements Planning (MRP) module, the system would tell us to buy or make everything in QA over again. This way works better because most items there are going to be accepted anyway."

Rebecca was almost beginning to think that destroying the sensor was a good idea. She started a list of elements in the story that were just bad business: the sensor quality seems suspect; new components that are defective are not being returned to the vendor; the lot size is too large and the lead time is too long; there are secret stashes of components in the Assembly shop and in Purchasing, making control difficult; QA seems to have abdicated responsibility for quality. The Storeroom has tried to take on that responsibility, but without adequate understanding of acceptable standards or procedures.

The sensor was a sole source part. The management of parts in QA for planning purposes may be flawed. There seemed to be inadequate planning for after-market parts. The Storeroom resents After-market sales, although this is both profitable and a requirement for customer satisfaction. Engineering uses the low cost justification, but low purchase price may have very little to do with low cost to the business.

The issue had been there long before Rebecca arrived. Could she help the company find a solution? She wondered if this was an exceptional story or if every one of the 12,000 part numbers had a similar tale.

Q1-Do most employees believe they are doing the right thing? Who does and who doesn't? Why do you believe that? What other cultural elements can you see in this case that might help or hurt a change initiative?

Q2-What is the change challenge with implementing different actions? How deep a change is required?