Critical Thinking During An Economic Challenge
Critical Thinking for Business
At one point in my career, I was the chief engineer of a VHS-tape mass-duplicating plant in Northern California. We had over 23,000 VHS-type vcrs on-line, twenty-four hours per day. We produced pre-recorded tapes for Hollywood Movie Studios to be sent to rental stores like BlockBuster Video and Hollywood Video.
The facility at peak production capacity, could record ten complete 'passes' or copies of a Hollywood movie in a 24-hour day. For a yearly figure we produced just over 77-million tapes.
One day I was introduced to the new Director of Engineering. He was wearing a business suit, and I was dressed in business casual. His first request was that I begin wearing a tie to work. His next request was that I inventory every vcr in the plant, for it's model year of manufacture, serial number and it's physical location in one of three large rooms in our plant.
I wondered as I drove home what he would use the data for? Then it hit me! He was going to analyze the cost of each vcr, it's 'real estate value' as it sat on the shelf. I have a background in broadcast television engineering and preventative maintenance in a post-production house for broadcast tv and motion picture films in Burbank. So I am familiar with accounting proceedures, and why this information was important for our plant, and to the new Director of Engineering.
Not only was the 'real estate cost' per vcr analysis important, but also the MTBF or 'mean-time-before-failure' calculation was important. After all, if a vcr is not in service, recording movies, we are losing money! So the age of the vcr indicated it's useful service life remaining, after which maintaining it would become too expensive, and replacement was the only option. He wanted to know how many vcrs were at the end of their life so he could replace them with new ones.
I proceeded to perform the calculations, including how many vcrs per shelf, how many shelves per rack, how many racks per 'bank', or row of racks, and how many banks of racks in the entire facility. I also included the cost of labeling each vcr, each shelf, each rack and each bank of racks in the building, as I anticipated he would want to have us perform this task as well.
Then I estimated the cost of the usual replacement parts to refurbish a vcr, video head drum, capstan shaft, pinch roller, belts and guides, and technician's time to remove and install the parts, calibrate the electronics, align the machine's tape path, and restore it to service on the shelf and rack.
When I shared the document with him he studied it for a long time, then laughed, "OK, I can go play golf and you'll take care of this right?" I said "Of course", and the project was begun the next day. The first step was to meet with the crew of 40 technicians, cleaners and the Control Room staff. We discussed the impacts to the production schedule in taking so many vcrs off-line per day.
We actually saved money because the 500+ plus vcrs we discovered were too old to reuse, were causing problems in recording tapes that would not pass our quality checks so the tapes had to be recycled as 'B-stock' and sent to the airlines as 'in-flight' movie tapes. By not introducing bad recordings into our duplication process, our net good recordings increased per day!By not having to handle bad tapes we saved money and increased productivity at the same time.
The Director was pleased with this result, and no doubt had predicted this, as he had come from the number two duplicator in the business and we were number three, in gross tape duplication and to-store delivery numbers per year.
I knew the next step would be to 'organize' each vcr by it's age or year of manufacture, and to implement and design a year-by-year rack shuffling-party, so that each rack by rack 'bank' of vcrs had only vcrs with the same age. Mass duplication requires constant operability, and once per month the vcrs are taken out of service into a maintenance shop, where they are disassembled, inspected, cleaned and the critical worm parts are replaced.
I supervised a staff of over 30 technicians, and a special crew who would 'clean' and inspect seleted vcrs while they remained in place on the rack shelf.
VCR's experience excessive wear when in constant usage, due to magnetic tape acting like a mild sandpaper, on the video record heads, the tape guides, and rubber parts deteriorate or are coated with a dry lubricant which is applied to the back of the tape during manufacturing. The tape will begin to slip or curl out of position once the rubber parts age or wear out.
Just as I suspected, the Director of Engineering had this plan in mind, only on a much larger scale than I imagined. He wanted to shut down an entire room at a time, comprising over 10,000 vcrs, remove, stack and sort the vcrs by year of manufacture, setup a massive preventative maintenance production line where each step in the preventative maintenance required required the vcrs to move along on wheeled carts. Technicians serviced the oldest ones first, and then returned them into the desired year-by-year order into the production racks.
The Director was very specific in our discussions for each maintenance station, the tasks to be performed there, and even which technicians I had selected and why? I organized the tools, parts and seating required, and created a final, 'quality control' and alignment station, for the purpose of calibrating, aligning and testing each vcr to factory standards prior to it's return to service. Our best technicians were placed in these positions to insure a quality result.
The formal program began on a Monday, and by Wednesday we had a serious problem, There were so many vcrs removed and stacked on the floor of the recording production room, that the people who collected the recorded tapes, and replaced them with blank ones, could not roll their collection carts freely through the rooms where recording was ongoing.
I solved this problem, by asking the executives if we could borrow their conference room for one week, while the project continued. They agreed and we moved 10,000 vcrs in one day (!), from one room to the other, maintaining the year-by-year sorting required. It was an awesome accomplishment.
Now we began the task of servicing the vcrs. Starting with the newest vcrs first, each technician was given the same task to do for four hours per day, then we rotated them out to another station to insure accuracy and no boredom from repetative tasks. They seemed to enjoy this work, and I even arranged for some music to be piped in which seemed to create an atmosphere that increased productivity. The Director wanted statistics so I would generate a spreadsheet each evening with that days results.
As the days progressed, the number of vcrs processed per day increased, and each one passed testing as expected. This was a pretty amazing sight to see, 35 technicians in a long row, servicing vcrs, old removed parts filling bins and being carted away, new parts being stacked nearby awaiting replacement. The air was humming with activity and the Director was pleased with the results.
After a period of six weeks, finally the last vcr was serviced and placed back on the shelf. We hosted a party for the entire company, including the packaging line where the tapes were labeled, sleeved, shrink-wrapped and placed into cartons and palletized for shipment by truck to the rental stores. This was a remarkable achievement, and individuals were recognized for their contributions to the success of the project.
The sum total of the exercise was each of 23,000 vcrs now possessed a known value, had all been recently serviced, and we could predict how much longer each vcr would produce good recordings until it's retirement. In addition, we could now keep better records for prevenatative maintenance by keeping spare vcrs on hand when one was removed for service.
A red tag on the vcr in the rack indicated a spare vcr was in use, and we could track this using a spreadsheet to insure the original vcr being serviced came back to it's designated location while the spare went back to the spares storage until needed.
All in all a very coordinated, professional and positive result came out of the project. The Director of Engineering left the company soon after, and so did I. I later learned that the company moved to Mexico to save on manufacturing costs, and to stay competitive. This was just before DVD's became the defacto standard movie format after VHS tapes began phasing out.
So this is the reason companies need to analyze their operations from time to time. To determine how cost effective their processes are, to determine if any changes need to be made to become more efficient, nimble, and make more profit! In this way companies can grow and prosper. The alternative is costs getting ahead of profits, and layoffs and downsizing steps are implemented.
Then the competition steps in and takes your customers away, because you cannot deliver on your contractural agreements.
Critical thinking can be done for any process, I've even analyzed how I mow my lawn, and can save fuel by not shutting down the engine when emptying the grass catcher. The mower engine consumes less fuel when idling for one minute, than when starting up each time.
Of course, by 'thinking green', I may have to invest in either a push-mower or an electric one as gas costs continue to rise, and carbon output from my mower added to all of the others adds up.
Please comment below if you enjoyed reading this article as much as I enjoyed writing it!