There is no such thing as a dumb question…or is there?

Corporate purchasing at a major company has been charged by management with cutting MRO costs. Through a series of evaluations of cost-cutting opportunities, corporate purchasing determined that the total cost of MRO represented “low hanging fruit” and assigned a cost recovery project to the indirect materials manager. The manager visited each plant to evaluate opportunities and prioritize them, i.e. those having the highest potential recovery to those with the lowest.

Plant #101 was selected as the first target.  Here is why:

• MRO spares exist in two storerooms and are duplicated.
• There is no computer control of inventory.
• Purchases are made from an excess of suppliers by many engineers with purchasing cards.
• There is no consolidation of the buy to optimize price.
• Paperwork is excessive; audit trail invoice matching is questionable.
• There is no process of chargeback reporting to determine asset actual costs.
• There is little purchasing involvement; no negations for price control.

The storerooms are operated by facilities engineers who know the equipment and keep the production lines rolling. Little planning exists and most orders are placed without price comparisons with many emergencies and overnight freight charges.

After performing his due diligence, the manager determined that bringing a qualified supplier on site to operate the stores would release value from MRO (management’s dictate) and increase operational efficiencies at the plant (plant manager’s continuing quest).

The manager and the selected supplier studied the MRO operation and assembled a business case showing financial and non-financial values which addressed both the management and plant manager’s needs. The ROI was favorable and the plan provided substantial process improvements.

Now came the time to gain acceptance for CHANGE.

It was determined that the two main facilities directors would have to agree to the change for the plan to work. When the proposal was presented by the manager and the chosen supplier, you could throw a bag over the resistance in the atmosphere and give it atomic weight. This was their territory and no one could do it better.  “A CHANGE WILL STOP THE PRODUCTION LINE.”

After the presentation, almost all of the questions asked were proceeded by, “Let me ask a dumb question.” 

• How can you, Mr. Supplier, buy better than we can?
• If you consolidate invoicing to twice per month, what are we going to do with the clerks who process PO’s and invoices?  Will they just sit and read magazines?
• We do not need an inventory system. When we need a part, we buy two, fix the press and put one on the shelf. What use would an inventory control system be to us?
• There is a supplier who is single source. We cannot get those parts anywhere else. They will not give you (the supplier) a discount. The manager said, “Let me ask you a dumb question.  What happens if the supplier goes down?”

The sad part is that these individuals are protecting their strongholds and will do a myriad of things to discredit a change of suppliers or a change of procedures. The owner, the management team and the plant manager are reluctant to force the issue for fear that the predictions of the engineers will be self-fulfilling and the production line will grind to a halt. The end result is that the value is not realized (both cost and efficiency) resulting in plant shut downs and lost jobs. The very people who resist change are the same people who put their own jobs in jeopardy.

Some questions are quite dumb.