Jay cut his teeth in the automotive industry, working his way up to General Manager of a leading automotive business in Detroit, Michigan, focused specifically on kitting modular bumper systems for passenger cars. In plain English this meant making bumpers with all the individual parts consolidated into one whole part for assembly.
At the corporate level, this consolidation process meant the purchase and merger of a handful of companies under one umbrella, with Jay’s facility itself being a $70 million business pumping out 18,000 bumpers a day for some of the largest automakers in the world. More specifically, Jay’s facility provided bumpers to a sequencing facility which fulfilled orders on vehicles before they moved onward.
As GM, Jay’s assumed financial responsibility for his facility, not to mention what he saw as the equally important responsibility of motivating and gaining the trust of the people he led every day. These two responsibilities collided head on one morning as he walked into his office to find an edict on his desk to cut 78 jobs within the next 48 hours….
Actually, the writing had been on the wall. It had been no secret to Jay and the C-suite the newly formed company had not been profitable enough to service its bank loan and had overextended on many levels, namely within the sequencing facility. In short, over-ordering bumpers from Jay’s facility had created costly excess – the sequencing facility was simply overstocked. Yet, no one expected such a drastic personnel move — especially not Jay, who had been recognized personally on numerous occasions as had his facility for efficient service and profitability.
With the corporate mandate weighing down, Jay attempted to minimize the human damage as much as possible. He stayed up two nights in a row to carry out the necessary paperwork and other steps to meet the edict while he watched his facility literally come to a standstill as person after person received the news and walked out as others looked on. Gutted, he eventually drew the line…
“One of the last cases was a woman who was a few months from full pension and they were gonna let her go. I simply refused,“ Jay explained. “I told them they could fire me for insubordination and I would accept it, but I would not lay her off because it was wrong, it was morally wrong.“
After weathering a tongue thrashing and threats of various kinds from the C-suite, Jay actually kept his job, and his female employee received a decent cash settlement she otherwise would not have received, had Jay not stood up for her.
“Emotionally, the layoffs broke the spirit of the operation. It was not about machines and nuts and bolts and bumpers anymore – it was about everybody being emotionally hurt. So, I had to change my style from manager to counselor for months. And the entire mood of the place changed for the worse.“
Looking back, knowing what he knows now, what would he have done differently in this specific situation?
Listen, Design, Execute
“Our corporation should have listened to the customer more to determine how much material to buy in order to service the menu,“ Jay said. ‘It‘s like if you owned a popular seafood restaurant with a large menu, but underestimated the cost of the ingredients.“
He also suggests that better communication with the customer might have limited the number of choices in terms of colors and other features, thus nipping the problem of too much inventory in the bud. “The customer might not have even known the problems that were being caused with their orders.“
Such communication might have improved aspects of the design, too. Jay felt the company was very successful in designing the product, but unsuccessful in designing the workflow. “The product was top-notch, but the process was not. Again, too much inventory, too many choices, sequencing inventory levels were not maintained over time and too much money spent which bankrupted the company.“
In terms of execution, a better scoping of the market would have made a difference. “They did not have a forecast of what and how much to buy. In the end it was pretty simple, they bought too many parts that did not sell,“ Jay explained. Shaking his heading as he thinks back, “we could have avoided the job cuts.“ Clearly, the last resort to problem solving in Jay’s mind.