241
Chapter 10
What Size Should the Cycle
Quantity (Lot Size) Be?
Over the past several decades, there has been a gigantic shift in perspective,
at least in many quarters, regarding the constitution of effective manufactur-
ing processes. This has been largely brought about by the introduction of
Lean Manufacturing and corresponding Lean principles. We have already
reviewed several instances in which Packard, in an effort to become “leaner”
through the introduction of Lean principles, actually did anything but
accomplish that. As we discussed, based on my observations and supposi-
tions, this occurred due to a lack of confidence on the part of key manag-
ers that they knew the right answers, an unwillingness on the part of many
managers to challenge directives from top executives even when major dis-
agreement existed, and a lack of understanding on the part of many execu-
tives of the consequences of making some of the bad decisions that were
made (although the ramifications were generally very easy to predict).
My observations are that when the pendulum swings, it normally swings
way too far in the opposite direction, until reason brings it back into equi-
librium. A good example is how business abuses in the early part of the
twentieth century brought about the unions. The pendulum has swung way
past vertical over the past several decades to the point that unions now have
way too much power and (along with weak and shortsighted management)
have been a major factor in the demise of virtually every industry, business,
or service which they touch. Just look at the steel industry, the auto industry,
the airlines, public education, and government employees unions, to name a
few. If the pendulum is not brought back to vertical soon in those industries
242 ◾  Intelligent Manufacturing: Reviving U.S. Manufacturing
(service, manufacturing, and government) where unionization is strong,
performance will continue to decline and companies and entities will even-
tually dissolve or be forced to relocate (except, of course, for government
entities, which will be a primary factor in the ultimate bankruptcy of this
country if things dont change soon. According to CBO [Congressional
Budget Office] numbers, federal employees with less than a bachelor’s
degree make substantially more than their private-sector peers on a per-hour
basis [around 20%] and have benefit packages over 70% as generous. This
wasnt the case even 10 years back when many individuals went to work
for the government for job security, even though the pay and benefits were
inferior to the private sector).
When I started with Packard in the early 1970s, batch processing was
still a favored manufacturing process where it made sense, and no one was
afraid to admit that batch processes were being utilized. This has changed
over the past four decades at Packard. If you were courageous enough to
say anything positive about batch processing within Packard since about the
early 1990s, even though it was far-and-away the most effective manufac-
turing process for virtually all cutting and lead prep operations within the
company (along with a lot of component assembly and final assembly), you
would draw evil stares and nasty remarks. Some would tell anyone so bold
to quit living in the past or quit being closed-minded and learn to accept
and grow with the new realities. Or the statement I dislike the most: You
have got to change paradigms.
In looking back, I think one of the biggest problems with the image of
batch processing was the fact that it was called batch processing. If batch
processing had been renamed Optimum Quantity Manufacturing (or OQM
for short), or something similar, it probably would not have been so stigma-
tized and Packard might not have made a lot of the really bad decisions it
made. (It’s kind of like how we are being told by many in the media and the
administration not to refer to acts of terror as “terrorist acts” anymore, in this
politically correct world, but, we instead are supposed to refer to them as
manmade disasters. They will always be terrorist acts in my world.)
In the early days, Packard knew and understood the value of batch
processing, and, based on some evidence, actually tried to determine what
the proper batch size should be in order to maximize the efficiency and
cost effectiveness of a process. For example, for wire cutting, a column was
included on the computerized cutting report called Planned Cut Quantity
(PCQ). When the inventory of a lead (a cut and terminated wire) reached
the reorder point, additional leads were pulled from the Cutting Department

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