When is communication effective and when is it useful? Is it legitimate for an individual to filter or select information when reporting or communicating on an event or a project? How do you decide?
In business and industry, there are far too many managers who will use their own personal circumstances as a basis for the filter. In this example, failure to keep a department and company correctly informed of a project mishap has severe personal and financial consequences for a purchasing manager.
This story occurred in a lead-acid battery company in the early 2,000s. They manufactured a mixture of industrial and military batteries with a large proportion of AGM design in their production. The company had a three-year renegotiation contract, due in six months, with a platform lift company. For this tender, a new, maintenance-free, deep-cycle product was required, rather than the existing flooded-electrolyte battery, to minimise on-charge hydrogen production. This one contract represented 10% of the battery manufacturer’s total turnover and made a serious contribution to its profitability.
After an initial briefing, a meeting was held to discuss how to address the upcoming tender. The result was to offer a low Pb-Sb version, rather than use a Pb-Ca-Sn grid alloy. This design would have the same one-year guarantee and two-year life— despite being cheaper to manufacture with lower capital investment. Existing Pb-Sn grid tools could be used without machine modifications. A list of components and tooling and suppliers was drawn up for the purchasing manufacturer to contact in order to obtain delivery times and prices.
A project was set up, and a schedule was drawn up to meet the six-month deadline. There were several key elements to achieving the goal but none of these tasks was particularly difficult or onerous.
Despite the workload being divided between the various departments, everything would eventually have to be processed by just one office— purchasing. The procurement manager, Greg, called a boardroom meeting just over a week after the initial briefing to draw up the final schedule, and to ensure that all materials and tooling modifications would be finished on time.
Determining costs
All department heads and relevant staff turned up, including Nazir, the MD. Greg handed out copies of his schedule of procurement, which was based on his conversations and estimates provided by the various suppliers. After allowing time for each department to study and discuss the proposed schedule, he kicked off the meeting by asking if the delivery dates for materials and components were compatible with the technical, engineering and production departments’ schedules.
After eliciting the general agreement of these parties, he turned to finance and the MD, and asked if the costs were within their budget for the tender price. The finance manager, Neville, was concerned that the costs had come out around 3-4% higher than the budget and would reduce margins. In particular, the separator costs were higher than those of the other ranges with similar capacities and the pressure relief valve was almost double the cost of the standard valve used in all other designs.
Greg passed the question over to the technical manager (me) to explain why these components were not the standard specification. The main reason was the use of antimony rather than calcium in the grid alloy. Because of this, more water would be broken down into oxygen and hydrogen due to the lower over-voltages on a Pb-Sb grid alloy. This meant that the valve needed a slightly higher relief pressure than standard, in order to retain as much of the gases as possible for recombination.
The separator would also need to have a higher than normal oxidation resistance for the same reason, i.e. the additional oxygen gas released provides a higher partial pressure of oxygen, which may oxidise the silica. Although not appreciating the chemistry, what was clear to Neville and Nazir was that these factors had to be tolerated in the battery costs. Nazir asked: “Greg, is there any way that you can squeeze these suppliers to get these costs down? We need at least the old financial margins, but we were hoping to get more, simply because it’s a superior product.”
Brad the sales director picked up the thread: “Our customer is already overpriced in the market and is depending on this new product to keep their own major customer. In my opinion, if we cannot meet the target price we risk losing all the business.”
Nazir turned to Greg and looked over the top of his reading glasses. “OK Greg, down to you again, see what you can do, but please be aware the timescale to start trials and tests is getting very close.”
All about communication
Greg leafed through his folders, slowly shaking his head. He spoke in a very constrained tone: “Once again it is down to me. I could have addressed this a week ago if I had been given all the information from these departments. I had no idea of the cost constraints or the reasons why some materials’ specifications were mandatory.
“This is all about communication; it’s just not good enough to provide me with the bare minimum, or for the sender to decide what is relevant or not. Effective communication is about fully informing all relevant parties to ensure that the efficiency of actions and decision-making are maximised. Revisiting these points and possibly finding new companies will take time. And, of course, if we miss the deadline, then guess who will be held responsible— that’s right— yours truly!”
Nazir stepped in. “Couldn’t have put it better myself. Right, you heard Greg, he has my full support and backing to get these materials sorted. Mike and Les, stay here with Greg and provide a more comprehensive brief, giving him some leeway in the specifications for obtaining quotes. In my experience, tolerances for materials and prices can always be stretched. And that was it.
After a two-hour meeting, Greg had his revised materials specifications and leeway for a bill of materials.
Greg allocated tasks to his staff to finalise specifications, costs, and delivery times with suppliers. Within two days he sent out memos to all departments, with a schedule for meeting the materials quotation deadline. Within this deadline were two critical issues: the new valves and the new AGM separator material. Three companies had been contacted with the specifications, including the existing suppliers.
Greg’s two assistants, Tanya and Sandra, had the job of chasing the suppliers and had five working days to report back to Greg. Even with this speed of response, it was tight.
To add to his pressure, Greg was informed that his 75-year-old father, a widower who lived alone was in hospital following a minor stroke. To add to this, Greg’s wife, a marketing executive, was away for a fortnight in the USA opening up new business for her company. This meant that Greg also had to look after his two teenage children— in addition to his father, who was due to be discharged later that week.
All of this culminated in reduced time at, and reduced focus on, his work. Consequently, a request for additional information from the existing supplier of the AGM mat and the long lead time information from the existing valve supplier was missed.
A week after the messages were received Greg was informed of this missing information. To add to his stress levels, he had just received a call from the hospital saying that his father had contracted pneumonia and was being moved to intensive care. If he wanted to see him then he would need to visit straight away before he was moved. He was not at all happy.
“Why on earth did you not actually tell me about this? You know how important it is. I will need to contact these people again and see if we can hurry them up. In the case of the valves, there is only one more supplier to work with. And what if they can’t do it? We could lose a couple of weeks, just because neither of you had the sense to inform me.”
Greg’s assistants protested that they had sent several emails that had been ignored. Additionally, when he was in the office, he would refuse to listen to their requests to review these and other problems.
The valve companies were then contacted. The original suppliers could not give a delivery guarantee but would do their best to meet the deadline. Luckily, the backup company confirmed that they could meet the deadline. Greg asked for assurance that they would meet the supplied specifications, bearing in mind that they did not supply the LAB industry. They sent a fax reply stating that the order was in two parts and that they would meet the specification for the valve, and they would supply the modified valve lid insert in accordance with the spill-proof requirements. Greg filed the information and gave his assistant a message to fax to the commercial manager of the original valve supplier to inform them that the contract would be split between suppliers due to meeting delivery dates.
After several hospital visits and being reassured about his father’s recovery, Greg spent the next two weeks chasing up all the outstanding materials and tooling orders. It was now almost two months into the project schedule when a review meeting was called for department heads. Greg confirmed that all was on time and that the remaining sticking point of the pressure relief valve and seating insert had been resolved.
All seems okay
When questioned by me about the new supplier meeting the specification, Greg was adamant that the company was reputable and had assured him that they would meet the supplied specification. A slightly ill-tempered discussion ensued, during which I was asked what part of “we will meet this specification” did I not understand. In a final gesture, Greg sent a fax to the supplier’s commercial manager, asking him to verify that their company would meet the specification. Confirmation was received and thrust at me across the table. It was agreed that all the correspondence concerning this component could be sent to me in order to validate the compliance statements.
A month later the components and materials were coming in and assembly trials were starting. All was going well, and the project appeared to be on time. Greg’s father had been discharged from the hospital and was self-reliant. Greg was now able to spend more time at work and began putting together a progress report for the next meeting. Consequently, he went through all the correspondence between himself and the suppliers, to ensure his delivery dates were confirmed. During this, he came across the pressure relief valve information and faxes. He decided to put this correspondence into a separate file, as proof of his good handling of a difficult situation. It was then that he noticed the fax which stated that the supplier would meet the specification for the spill-proof insert.
This made him curious, why not just say insert? He checked the original specification and with a growing cold feeling he saw that there were two specifications listed— one was spill-proof, the other was leak-proof. Checking his fax out he noticed that he hadn’t specified which spec was to be followed. Did it matter? He quickly raked through the files until he found my request asking for a quotation on the valve insert based on the leak-proof insert specification.
After phoning both suppliers he ascertained that the original supplier had rightly assumed (from experience) that it was the leak-proof version for a VRLA design. For the new company, however, their delivery confirmation was for the spill-proof, not the leak-proof version. There was a brief period of panic; the review meeting was in half an hour. Greg decided that he would make his presentation as planned showing no hiccups, and then sort out the problem over the next couple of days. However, the importance of the leak-proof version (high internal gas pressure) was made clear in the meeting.
The insert and valve were due for delivery in one month. He spent the next couple of days in a frantic melee of pleading with and threatening his suppliers. The new supplier would have to order another mould from their toolmakers and start again— and no delivery date was forthcoming. The tooling cost, even if amortised, would increase the component cost
Greg kept up a two-week campaign with both suppliers, desperately exploring avenues to resolve the problem. Unfortunately, all were blind alleys. It was at this point, i.e. three weeks after the discovery of the blunder, that Greg asked to see the MD and explain the situation. After a 15-minute monologue from Greg, Nazir turned 180 degrees on his swivel chair, presenting his back to Greg. “I will have to call an immediate meeting to see what we can do to salvage the schedule, or minimise the impact, due to your cock-up.”
Nazir then turned back to face Greg. “I have every sympathy, and I do appreciate the pressures on you two months ago with your father’s illness and wife’s absence to deal with. We can forgive such errors or oversight. What I cannot condone is the fact that you did not bring this to light as soon as it was discovered. Now we need to pull some sort of solution out of a magic hat, and I sincerely hope we do have a magician or two on our payroll.”
After that, a meeting was called, and the situation was laid bare. I was the first to make comments; these included some of the choice phrases used by Greg to describe the importance of full communication. However, it turned out that we had an alternative lid design from another supplier and all other design features were the same.
By halving the 2% scrap and 5% materials contingency costs I had put in we would still be financially on track. The production and engineering managers promised to work around the clock, which would halve the time for production trials. I was able to speed up the testing procedure and, with a fair wind, we would be back on schedule.
Success by the skin of our teeth
In the end, the target was met by the skin of our teeth and the project was delivered on time. The customer gave us 100% of the tendered business based on our previous record and their own battery performance trials. As for Greg, he had a personal meeting with the MD. During this Nazir calmly explained to him that he was willing to make allowances due to his mental state and both the personal and professional pressure that he must have been under at the time.
However, he had been considered for promotion to procurement director based on his past performance. This was now in question. It was not because of making a mistake— it was having the ability to work under pressure and to make judgement calls in the best interests of the company, rather than one’s own personal position. Above all, it was selecting or even editing information to help his own personal position that was the most difficult to condone.
Nazir went further; he was due to attend an annual corporate review the following week where he had been going to recommend Greg’s appointment to the company board. He was no longer considering that proposition. He ended by asking Greg one question: “Have I communicated the situation effectively?”
Greg nodded.
