Document ite Page 1 of 3 Finctional THE WALL STREET JOURNAL Why Are Companies Paying Close Attention To This Toilet Maker? Wall Street Journal; New York; Aug 20, 1999; By Jeffrey A. Tannenbaum; Edition: Easter edition Column Name: ‘The Front Lines Start Page: BI ISSN: 00999660 Subject Terms: Toilet facilities Manufacturing Personal Names: Hoffman, Hugh J Companies: American Standard Cos Abstract: ‘Mr. Hoffman, whose formal title is process owner, chinaware order fulfillment, is responsible for ensuring that the factories turn out what customers order, and for delivering on time. Right now he has to deal with the Savona Bidet, a recent design that comes -- at least on paper -- in 15 colors, including “rhapsody blue" and "loganberry." In reality, the model, plagued by production glitches at a plant in Mexico, is hard to get in any hue. Mr. Hoffman vows to redesign the Savona Bidet so it will be simpler to make. "We will either find an acceptable redesign, or it will come off the product list," declares the 54-year-old manager. Mr. Hoffman's job is cropping up increasingly in other big companies as they strive to be more efficient. The job, as Mr. Hoffman does it, requires him to think about everything that happens between the time an order is received and the time it is paid for. More important, he must help his company forecast demand, He even gets involved in ensuring that factories are cranking up capacity in the right ways. Full Text: Copyright Dow Jones & Company Inc Aug 20, 1999 Piscataway, N.J. -- THE CHINAWARE factories of American Standard Cos. don't make anything you put on your dinner table. We're talking about toilets and bidets here. One of them, at the moment, is a major thom in Hugh J. Hoffman's side. ) Mr. Hoffman, whose formal title is process owner, chinaware order fulfillment, is responsible for ensuring that the factories tum out what customers order, and for delivering on time. Right now he has to deal with the Savona Bidet, a recent design that comes -- at least on paper -- in 15 colors, including "rhapsody blue" and "loganberry." In reality, the model, plagued by production glitches at a plant in Mexico, is hard to get in any hue. American Standard, on a recent day, had orders for 432 units, but only 154 were in stock. The time needed to fill new orders was about 12 weeks, an eon for a company that prides itself on filling most orders within a month (often within a week), Mr. Hoffman vows to redesign the Savona Bidet so it will be simpler to make. "We will either find an acceptable redesign, or it will come off the product list," declares the $4-year-old manager. That's just the approach that has made American Standard a model for the kind of work Mr. Hoffman does, says Michael Hammer, a corporate re-engineering consultant and author who has advised the company. Mr. Hoffman's job is cropping up increasingly in other big companies as they strive to be more efficient. http://proquest.umi.com/pqdweb?TS=1027965219&RQT=309&CC=2&Dtp=1 &Did=00000004405 7/29/02Document Page 2 of 3 The job, as Mr. Hoffman does it, requires him to think about everything that happens between the time an order is received and the time it is paid for. More important, he must help his company forecast demand. He even gets involved in ensuring that factories are cranking up capacity in the right ways. "L try not to do anything routine, so I can focus on improvements," Mr. Hoffiman says. "I move behind the scenes. I understand the workings of the company, and I know how to get things done." ‘THE NUMBERS speak for themselves. Mr. Hoffman is a crucial player in the turnaround under way in his company's $250 million U.S. chinaware business. American Standard’s sales of U.S. plumbing products surged 58% in four years, to $465 million last year, thanks largely to faster and more-reliable deliveries of chinaware and other products. Related operating profit -- earnings before interest, corporate overhead and taxes -- totaled some $30 million last year, in stark contrast to a $29 million loss four years earlier. In search of such results, companies such as Texas Instruments Ine., Duke Energy Corp. and Owens Coming are embracing the idea of "process owners," a new breed of executive who transcends the bounds of conventional departments such as sales and manufacturing. Process owners can help ensure the well-being even of companies in stagnant markets, says Dr. Hammer, who holds a Ph.D. in engineering. In such cases, he explains, "you have to out-execute the next guy. You have to steal market share by doing everything faster, better, cheaper." Mr. Hoffman joined American Standard in 1970 asa ceramic engineer, working his way into a series of manufacturing posts until 1995, Along the way, he saw how painfully inefficient the company could be. For example, he says the toilet factories would save up orders until large quantities of any particular model could be made, Customers would be left waiting or, in other cases, would receive products from large inventories too costly for American Standard to carry. Eventually, the company began making smaller batches more often, matching immediate demand. Mr. Hoffinan became a process owner in 1995, charged with constantly improving the company's ability to fill chinaware orders. At the time, he says, only about 40% of chinaware pieces ordered were delivered on time. The fill rate today is 95%, the company says. IRONICALLY, Mr. Hoffiman says he began the improvement process by mothballing special computer software that the company had been using to estimate delivery dates. "The software was so complex, it was never correct,” he says. Using simpler methods, he and others learned to make more-reliable estimates. ‘The company used to take as long as six weeks to fill orders it had promised to fill in only two. Now, the customers get a target delivery date that is much more realistic, Mr. Hoffman says. More important, however, actual delivery times have been speeding up, thanks to better synchronization between new orders and daily factory output. A longtime customer, Consolidated Supply Co. in Portland, Ore., confirms the change. Karl E. Neupert, president of the wholesaler, says the company was so disgusted with American Standard only two years ago that it came close to switching suppliers. Since then, deliveries have improved dramatically, enabling Consolidated to receive goods more frequently and thus turn over its plumbing-goods inventory approximately eight times a year, up from three. http://proquest.umi.com/pqdweb?TS=10279652 1 9&RQT=309&CC=2&Dtp=1 &Did=000000044t... 7/29/02Document Page 3 of 3 Back at American Standard, Mr. Hoffiman says customers can look for even better service soon, But first, the company must upgrade its computer systems. "What we'd really like to do is service everybody within 10 days," he says. "With the tools I have today, I can't get there. But I'd say that the 10-day thing is on the three- or four-year horizon." Reproduced with permission of the copyright owner. Further reproduction or distribution is prohibited without permission. http://proquest.umi.com/pqdweb?TS=1027965219&RQ =309&CC=26Dtp=1&Did=0000000441... 7/29/02