Even managers were often flying blind. Once a job was out the door, for example, no one could be sure whether it had been profitable. For a while, Connor kept labor-time records for each job by hand. But the data were never collated or analyzed, in part because their accuracy was suspect. Ironically, Sloss had spent nearly $300,000 on computers a few years earlier, installing several IBM System 36 minicomputers. But the big machines and their canned software proved too clumsy for daily plant-level chores such as estimating or job costing, and managers mostly ignored them.
By 1989 Sloss had begun thinking about using personal computers, which were getting more powerful by the day, and about custom software. His San Jose plant manager had already begun experimenting with PCs, albeit with packaged programs. And now here was this young man named Michael Quarrey looking for a job.
Quarrey had some unusual credentials. He had worked for the National Center for Employee Ownership and was an ESOP expert. He was also an experienced programmer and was just leaving a position with another job shop. After a moment's hesitation -- "the idea of a little company like ours hiring a computer programmer was mind-boggling" -- Sloss hired him and installed him in Los Angeles with instructions to develop an effective job-tracking and job-costing system. On Quarrey's recommendation he immediately began buying PCs and networking software.
Before long Quarrey was writing programs to computerize the L.A. operation's information flow. Before long, too, the two men realized they shared an agenda going well beyond computerization.
Ever since he took over, Sloss had been chipping away at Connor's old-fashioned, secretive style of management. Employees had become part owners of Connor through the ESOP, he argued; they should be treated like owners. So he explained the company's financial statistics to them, and he made a point of walking around the plant, answering questions. Now, he figured, the new computer system gave him a chance to disseminate day-to-day operating data, exactly what owners ought to see. Quarrey, similarly inclined toward employee involvement, designed his system to ensure broad access. He also designed a two-way flow of information: each electronic shop order would contain "notes" areas, so that engineering or quality control, for example, could enter comments about a particular job.
But it was Roy Gallucci, a blunt-spoken machinist in Connor's coiling department, who may have had the biggest impact on the new system.
"Gallucci stopped me one day in the shop," remembers Sloss, "and pretty soon we were talking in the plant manager's office behind closed doors." The machinist's message to the boss was simple. At least one computer should be out in the shop. Blue-collar employees should have the ability not only to enter comments about a job but to somehow force the office to pay attention. He didn't know exactly how it might work, but if the company was going to put in a whole new system, it had better do it right.
Bingo, thought Sloss: Gallucci was touching on a perennial complaint, namely, that the office never listened to the shop. Here was a chance to deal with it.
Quarrey agreed -- not that he had much choice. "There was no discussion," he remembers. "Bob said, 'Do it.' " By May of 1990 Quarrey had his unusual new system up and running.
* * *
Pull up to Connor's L.A. plant -- it's actually in Monterey Park, on the outskirts of the city -- and you won't be immediately impressed. It's housed in a standard-issue industrial building. Inventory spills out from the shipping door into the weed-rimmed, California-size parking lot. Inside, Connor looks like a company on a bare-bones budget. There's no receptionist: visitors are invited to use the phone in the lobby. The office staff -- which, it turns out, handles customer service, invoicing, purchasing, bookkeeping, personnel, production scheduling, and all related paperwork -- numbers exactly six.
But don't be misled by the seeming austerity: this is not a company done in by the recession. In the last two years the plant's head count has dropped (through attrition) by 15 -- yet its sales have risen 28%, to an annual level of $10 million. In 1990 Connor's L.A. division turned a 5% pretax profit. It's maintaining that pace this year, despite the downturn in the economy.
On the face of things, the difference between today's Connor and 1989's is purely technological. Customer-ser-vice reps now prepare shop orders on a quietly humming PC -- no more carbons and Wite-Out. Engineers use an estimating program to calculate trial quotes in minutes, not hours.
But dig a little deeper -- talk to people throughout the company about what's different now -- and the magnitude of Connor's ongoing transformation becomes apparent. Plenty of companies computerize their information systems. Not many disseminate information to every nook and cranny of the organization -- let alone share the power all that knowledge carries with it.
At Connor, that's pretty much what is happening.
Thanks to Roy Gallucci, for example, every employee has full and instant access to data about the jobs he or she is working on. Not just the customer's name and the specs, but a full history of the job to date, special notes or instructions from engineering or customer service, and management information once thought of as sensitive, such as the price and the margin. An employee who spots (or develops) a problem with a job can go to the computer and put a "shop hold" on it. Until the engineering department investigates -- and makes a formal written disposition of the problem -- the software won't allow Connor to take any new orders for the same part.
In one recent six-week period, Quarrey counted 117 holds emanating from machine operators and their supervisors. "This grinding can only be done by A-1 Surface Grinding," read one, adding the address, a contact name, and the price per part that the preferred outside vendor would charge. "OK, will change the master," responded engineering. "Change run speed from 850 pcs/hr to 650 pcs/ hr," recommended another. "Changed speed from 850 pcs/hr to 700 pcs/hr," answered the not-totally-compliant engineer. Gallucci himself admits to using the feature regularly -- for example, to propose sending a three-part order out for heat treating all together rather than one batch at a time. And Quarrey points out that similar holds can be put on a shop order by quality control, by engineering ("Don't allow this estimate to become an order until we have a clean blueprint"), or by customer service ("Don't ship without clearance from us").
A direct effect of sharing information and power is that problems get nipped in the bud and jobs that cause difficulties the first time around rarely cause the same difficulties the second time. Closing the loop, Quarrey calls it: the people who need feedback get feedback. That effect shows up most graphically in a number calculated monthly by Armando Lopez, Connor's head of quality control, and posted on the bulletin board outside the lunchroom. In 1989 Connor's "cost of discrepant material" -- rejects, rework time, and so on -- came to 4.28% of sales. A year later the figure was just over 1%; through May of this year it was .5%.
