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Division Management
 Looking at Taco today, most industry observers see a growing, high performance company.
Flip the calendar back nine years, and those same observers might see a different picture. Taco, circa 1991, was a company with stalled growth and a fuzzy sense of direction.
"We weren't growing; we were surviving," recalls President John H. White Jr. "We either had to fix the business or do something else with it. We actually considered selling it."
Since had been owned by the White family since 1920, selling the business was not an overly attractive alternative. So, the Whites and other Taco mangers decided to fix the business instead.
The solution was to manage the company as four distinct divisions. One manager was given almost complete responsibility for each of the divisions, which were divided along product and applications lines; Circulators, Controls, Commercial Pumps and Heat Transfer.
"To begin with, we had to figure out what our problem was," John H. White Jr. says. "We figured it was operations. So, we had to get rid of the centralized management structure, get to the problem solvers and let them solve the problems."
How It Works
Although started in September 1991, the new management structure has been implemented very slowly. In fact, the entire transition is an on-going process.
"You just don't throw people at these operation centers," White says. "You've got to do it pragmatically. You have to develop a trust that transcends through the whole organization."
Today, the Circulator, Controls and Commercial Pump Divisions are located in Cranston, R.I., with the Heat Transfer Division 22 miles away in Fall River, Mass. The four division manager have been elevated to Vice Presidents and are responsible for manufacturing production, product quality, purchasing, planning, engineering, order entry, customer service, safety and inventory management. Functions still centralized in corporate headquarters include sales, product management, human resources, and research-and-development.
"We are responsible for the profit-and-loss statement in each operation center, and we drive the train," says Bob Lee, Vice President, Heat Transfer Division. "We have to steer everyone's priorities to meet the common goal at the end of the day."
Taco has discovered a chief advantage of the division structure is increased accountability. Never keen on running the company by the numbers in the past, Taco now records scrupulous measurements in its divisions.
"We measure everything from the price of steel to how much we are paying for paper clips, and that's no joke," Lee says. "Each person who works for us is given detailed measurements and requirements of the job. Good people like to be measured, and that's been a big part of the success."
Performance is also measured, a fact that is bound to be noticed by Taco customers. "We track on-time performance and quality," White notes. "We've seen improvements in both areas."
Team Taco
It's almost ironic but another benefit of decentralizing Taco's operations is a heightened spirit of teamwork. The cooperative attitude begins in the operation centers but extends company wide.
"The Division is a team," says Chris Integlia, Vice President, Controls Division. "In my office, all the departments are in a row. Order entry is sitting next to the two planners, the manufacturing engineer and the purchasing guy."
"When a big project comes up, and we need to get a meeting together, I have every discipline required to take that order from the time it's entered to the time it's produced and put on a truck. I don't have to cross any other supervisor's line."
White adds, "The Division Vice Presidents don't need permission from someone else. Their decisions do not have to go up one way in the company and back down another way."
This solutions-oriented approach has put Taco on a forward-thinking track. White meets formally with each of the Vice Presidents once a month to analyze the Division numbers, and to look ahead.
"We're not going to sit in a meeting room for three hours and look at last month's numbers other than to say they are good or bad," White says. "If they're bad, we can get to the reason very quickly. I don't have to spend much of my time trying to figure out how we're going to solve a problem because one of the four division heads will have an answer as to what's happening by the time the meeting rolls around."
The level of trust White places in the division heads is matched only by the trust they place in each other. Their relationship extends the team concept throughout the entire company.
"We don't try to conquer the world individually," Lee says. "We tap each other constantly on a lot of different issues. We bounce ideas and situations off each other all the time. And, there are many other people in the company we can access."
Among those "other people" are the employees who are actively involved in finding solutions and moving the company forward.
"In the past, if we were going to change a machine or a line on the manufacturing floor, the manufacturing engineer just did it without input from the employee, says Candy Castaldi, Vice President, Circulator Division. "Today, we sketch out a floor plan, sit down with the whole group, tell them what we plan on doing, and see if they want to add or delete anything."
"This gives employees the chance to buy into the plan. We keep going back to them until everyone is satisfied. In the end, they've got to be happy with it because they're the ones who set it up. This really does increase morale."
Not all employee ideas can be implemented for financial and other reasons, Integlia says. Also, involving the employees does add time to front end of a project if, for example, a machine is brought in or moved. "But the whole project time from beginning to end definitely is shorter," he adds. "We've proven that time and time again."
One recent innovation, based on an employee suggestion, is to send the Taco employee who will operate a new machine to the factory to test the equipment before it is shipped to the Taco floor. "The idea just made sense and it happened," Integlia says. "We send the operator out with our manufacturing engineer to run the machine."
Lee adds, "We can't take credit for these management innovations. Nowadays, 90% come right from the people on the floor. We've opened our doors, and our ears. We tell them we'll listen if they have something to say, good or bad."
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