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The company received blanket sales orders from Japanese firms (GME, Victor Data, Fijitsu, etc.). Things looked good once again. But . . .
When Fred Marsh promoted me to Sales Manager, I was in seventh
heaven. Now, six months later, I feel I am in hell. This is the first time in my life that I am really on my own. I have been working with other people all my life. I tried my best and what I could not solve, I took upstairs. Now it’s different because I am the boss (or am I?). Fred has taught me a lot. He was my mentor and gave me this job when he became vice-president. I have always respected him and listened to his judgment. Now thinking back I wonder whether I should have listened to him at all on this problem.
It started one late Friday evening. I had planned to call my West Coast customer, Partco, to discuss certain contract clauses. I wanted to nail this one fast (Partco had just been acquired by Volks, Inc.). Partco was an old customer, in fact—through good and bad it had always stayed with us. It was also a major customer. I was about to call Partco when Dinah Coates walked in clutching a file. I had worked with Dinah for three years. She was good. I knew that my call to Partco would have to wait. Dinah had been cleaning out old files and came across a report about design and manufacturing defects in Partco heads. The report had been written
nine years ago. The cover memo read as follows:
To: Ken Smith, Director of Marketing From: Rich Grillo, V.P. Operations Sub: Partco Head Schedule
This is to inform you that due to pole-depth problems in design, the Partco heads (all 514 in test) have failed. They can’t reliably meet the reading requirements.* The problem is basically a design error in calculations. It can be corrected. However, the fix will take at least six months. Meanwhile Ron Scott in production informs me that the entire 5,000 heads (the year’s production) have aready been pole-slotted, thus they face the same problem.
Ken, I don’t have to tell you how serious this is, but how can we o.k. and ship them to Partco knowing that they’ll cause read error problems in the field? My engineering and manufacturing people realize this is the number one priority. By pushing the Systems Tech job back we will be back on track in less than six months. In the interim I can modify Global Widgets heads. This will enable us to at least continue shipping some product to Partco. As a possible alternate I would like to get six Partco drives. Michaels and his team feel that with quick and easy changes in the drives tape path they can get the head to work. If this is true we should be back on track within six to eight weeks.
A separate section of the report read as follows:
(Notes from meeting with Dom Updyke and Rich Grillo)
Solution to Partco heads problem All Partco heads can be reworked (.8 hrs. ea. — cost insignificant) to solve Partco’s read problems by grinding an extra three thousandths of an inch off the top of the head. This will reduce the overall pole depth to a point where no read errors occur. The heads will fully
*Authors’ Note: Error signifies erroneous reading, not an error message. For example, instead of “$200” the head reads “$3005.42.”
THE OB SKILLS WORKBOOK 273
meet specifications in all respects except one, namely life. Dom estimates that due to the reduced chrome layer (used for wear) the heads’ useful life will be 2,500 hours instead of 6,000 hours of actual usage.
Our experience is that no customer keeps accurate records to tell actual usage and life. Moreover the cost is removed since Partco sells drives to MegaComputer who sells systems to end-users. The user at the site hardly knows or rarely complains about extra costs such as the replacement of a head 12 to 18 months down the line instead of the normal 2 years. Besides the service technicians always innovatively believe in and offer plausible explanations—such as the temperature must be higher than average—or they really must be using the computer a lot.
I have directed that the heads be reworked and shipped to Partco. I also instructed John to tell Partco that due to inclement weather this week’s shipment will be combined with next week’s shipment.
Dinah was flabbergasted. The company planned to sell products deliberately that it knew would not meet life requirements, she said, “risking our reputation as a quality supplier. Partco and others buy our heads thinking they are the best. Didn’t we commit fraud through outright misrepresentation?”
Dinah insisted I had to do something. I told her I would look into the matter and get back to her by the end of next week.
Over the weekend I kept thinking about the Partco issue. We had no customer complaints. Partco had always been extremely pleased with our products and technical support.
In fact, we were their sole suppliers. MegaComputer had us placed on the preferred, approved ship to stock, vendors list. It was a fact that other vendors were judged against our standards. MegaComputer’s Quality Control never saw our product or checked it.