On the showroom floor stand surprisingly few cars. A salesman offers Alex a test drive. "Just to get the feel," he says. Alex declines. "I know these cars; I'd like to place an order."

The salesman leads him to a row of PCs at the far end of the floor. After the salesman sets up a computer and shows Alex around a little, Alex continues for the next hour to design a car. The options are fantastic — five front ends, six rear ends, four-door combinations, seven interiors, three spoilers, five engines, etc.

As he makes his choices, he gets a three-dimensional view of what the car will look like. Once he has finished, the salesman calculates his choices and gives him a selling price. Alex decides the price is good. "I'll take that," he says.

The salesman then e-mails the configuration to an order-receiving PC in a manufacturer's facility 300 miles away.

The Motor Manufacturer
Order Receipt and Picking — On receipt of the order, the PC automatically allocates a serial number to the car and prints out a picking list with all the relevant data. One copy goes to a group of cross-trained pickers who pick the subassemblies (complete engine, dashboard, etc.) A second copy is sent to the paint facility where a standard chassis is painted to the specified color.

(Of note is the fact that holding costs are not the main reason for inventory being considered an evil. High work-in-process [WIP] and finished inventory affect a company's ability to respond to its market. WIP and lead time are a mirror image of each other — the higher the WIP, the longer the lead time. This is why companies with high inventory battle to survive. In this light, holding raw or component inventory in moderation does not affect the company's performance ability and, therefore, is not considered bad.)

On completion of painting, the chassis is coupled to the pick components and sent to a "small business unit" (SBU).

The Factory — This area no longer has assembly lines running from one end of the factory to the other. The area has been split into cubicles, each with its own short line. These areas are run as small businesses, measured by theory of constraints measurements — throughput, inventory and operating expense. Each employee is cross-trained, and given time, could assemble the entire car.

Although some tooling has increased, there are many advantages to SBUs:

• The company is extremely responsive (short lead times).
  
  
• Each SBU becomes responsible for its quality.
  
  
• Customers can talk directly to the SBU.
  
  
• Flexible working hours are possible.
  
  
• Wages can be based on profit.
  
  
• Employees have more responsibility but also more satisfaction.
  
  
• Employees are driven by results rather than by management.

Seven days after the order date, Alex's wife arrives home from work to find her new car parked in the drive. She's overwhelmed! It is her favorite color and has her style of interior and all the extra little things she enjoys in a car. But best of all, Alex adapted the car to suit his pocket. How's that for a win-win situation?

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