This story is about a manufacturing company, which was growing fast and had developed various measures for improvement of efficiency in its operations.
The company had a huge parcel of land which was developed as a state of art manufacturing hub. Initial days after the setup, everybody was busy in looking at how the output from the manufacturing can be increased to meet the customer needs.
Slowly as the manufacturing was gearing up to meet the customer demand, the need for developing various KPI’s for monitoring the progress of day-to-day operations was felt by the management. Accordingly, the typical KPI’s like OTIF, output per shift, plan Vs Actual, etc were developed, rather as the organization which had legacy of many years, the old ways of measuring the performance were sharpened to have more focused KPI’s.
Every department was given targets which will set in the improvement initiatives. There was a monthly meeting where each department will present their monthly report and discuss the KPI’s and their status.
Engineering department had one of the KPI’s for improvement in utility efficiency, like water consumption, electricity consumption, steam consumption etc. For consecutive 3 months the consumption of water and electricity was showing upward trend and the utility manager was giving reason of higher consumption in manufacturing.
The manufacturing review for last 3 months showed a steady manufacturing outputs, rather the manufacturing in charge was complaining about stagnation of demand, because of which his KPI’s of efficiency increase were getting hampered.
The Administration department review was showing less than budget expenses on services, mainly coming from reduction in labour requirement for services like gardening. The company had a huge land which was developed as a garden across the factory. The factory manager during visits by customers and other visitors would proudly talk about the various initiatives taken for a green surrounding in the factory.
As KPI’s for the Engineering department were showing need for a check and correction, Engineering manager set up a team of 3 engineers, who will check why the consumption of electricity and water is increasing. The team went on studying whether there is any wastage of water, or electricity in the manufacturing area, but could not pin point any increase in usage of the utilities.
During his routine factory round the factory manager was speaking with one of the security guards posted near the fire hydrant pump room. The guard casually mentioned that, now a days the fire hydrant pumps are getting started quite frequently than what he used to observe few months back.
On his return to office, factory manager called the Engineering manager to check what is wrong with the jockey pump in the fire hydrant room. Mean while factory manager was having meeting with Administration in charge, to congratulate him on his efforts in reducing the spending on the labour front. He was curious to understand how admin can achieve this efficiency. After digging the details, the admin manager mentioned that the labour used for watering the lawns and trees was reduced to half as there was no need to water certain areas. These areas despite the summer, were always green and there was no need to use water for these areas.
As soon as the meeting with Admin in charge was over, Engineering manager informed that the jockey pump is getting started every 6-8 minutes, which earlier used to be once in 2 Hrs, and hence the electricity consumption has gone up. He had sent a team to check whether there is any leakage of Hydrant water from any of the fire hydrant outlets, answer for which was negative.
Now the Factory manager discovered the relation between the high utility consumption and reduced manpower requirement in gardening section!!
The 2 KPI’s which in Silos were shown as one improving while other is struggling to arrest the decline of performance.
He immediately ordered to inspect the underground fire hydrant line in the area where the admin department mentioned about reduced need of watering the lawns and trees.
To everybody’s surprise they found a huge leak in the underground pipeline, because of which the area soil was damp even in summer, which reduced the need for watering the area there by reducing the manpower, and which increased the water consumption as well as increasing electricity consumption via triggering the jockey pump of fire hydrant system every 6-8 minutes to maintain the pressure in the hydrant line.
