Wednesday, February 29, 2012

Value Engineering

You don't have to be an engineer to appreciate this story.

A toothpaste factory had a problem. They sometimes shipped empty boxes
without the tube inside. This challenged their perceived quality with
the buyers and distributors.
Understanding how important the relationship with them was, the CEO of
the company assembled his top people. They decided to hire an external
engineering company to solve their empty boxes problem. The project
followed the usual process: budget and project sponsor allocated, RFP,
and third-parties selected. Six months (and $8 million) later they had
a fantastic solution - on time, on budget, and high quality. Everyone
in the project was pleased.

They solved the problem by using a high-tech precision scale that
would sound a bell and flash lights whenever a toothpaste box weighed
less than it should.  The line would stop, someone would walk over,
remove the defective box, and then press another button to re-start
the line. As a result of the new package monitoring process, no empty
boxes were being shipped out of the factory.

With no more customer complaints, the CEO felt the $8 million was well
spent. He then reviewed the line statistics report and discovered the
number of empty boxes picked up by the scale in the first week was
consistent with projections, however, the next three weeks were zero!
The estimated rate should have been at least a dozen boxes a day.  He
had the engineers check the equipment, they verified the report as
accurate.

Puzzled, the CEO traveled down to the factory, viewed the part of the
line where the precision scale was installed, and observed just ahead
of the new $8 million dollar solution sat a $20 desk fan blowing the
empty boxes off the belt and into a bin. He asked the line supervisor
what that was about.

"Oh, that," the supervisor replied, "Bert, the kid from maintenance,
put it there because he was tired of walking over every time the bell
rang."