Gaining a New Perspective on Work – and the World!
LFM Student Puts His Education to Work in China
By Diana Griffith
Reprinted courtesy of News@MITSloan
March 10, 2005
Mix a lifelong fascination with factories, a desire to explore other cultures, a relevant and prestigious education, and a dash of southern charm, and what do you get? For LFM student Jason Smith, it all added up to a successful six-month internship working as the operations manager's right hand man at ABB Shanghai.
Given his interest in factories and his fondness for China, Jason says the internship was a natural choice."ABB was a good internship because it was a small factory. I was very interested in factory management and operations, and this was a good chance to get a high-level factory overview," he says.
Before coming to MIT Sloan, Jason worked as operations manager at an Intel factory in Phoenix , where he was responsible for just a small portion of the facilities output. At ABB Shanghai, he says, "I got to see the big picture of the finances, the purchasing, the planning, the overall factory dynamics and flow, what goes into the running of an entire factory, albeit on a much smaller scale than an Intel site. But still, a lot of the principles are the same."
The ABB Shanghai plant, which produces power distribution transformers for commercial use, is a joint venture between ABB Power Technologies and Shanghai Electrical Apparatus. While the new management has instituted some changes, many of the plant's 340 employees are grounded in outdated policies, says Jason.
Instituting Change
"When I got there, just looking at their financial statements, the company had a lot of growth but it wasn't sustainable. It reminded me of the first case we did in Finance 2, the Wilson Lumber Company. It was the same thing, they had this amazing growth opportunity but with their inventory policies, and work in progress, those policies were just tying up cash."
During his time there, the factory was able to reduce the manufacturing throughput time by more than 50 percent, and material inventory for high value materials was significantly reduced, all of which helped turn the company's cash flow to positive by the end of the year.
Jason is quick to point out that he did not ride in on a white horse to lead them to the light; rather, his supervisor had already begun lowering inventories and lead times. What Jason did do, however, was apply his analytical skills to the data in order to find the best ways to accomplish those changes. "There was actually a lot of teaching of these concepts… a lot of teaching of why lower inventory was good, to show the effect on the cash flow, not necessarily to the plant manager, but the people who are actually doing the work and making the orders and determining how much raw material they need to keep on hand."
As an outsider, Jason says it wasn't always easy to get everyone's cooperation. "You have people who are set in their ways, but there's a reason. They have a lot of good ideas as well, so to work with them, to balance the old thinking with the new thinking, that's a challenge." Over time, however, he won them over with his friendly nature and his sincere attempts to learn their language and culture. And, he adds, "They know about MIT, so that was a huge credibility boost!"
"Underlying Complexities"
Jason's love of plant mechanics extends back to his childhood in Knoxville , Tennessee . "You'd take a field trip to some factory, and I was always fascinated by these huge buildings filled with machines and people. There's a lot of underlying complexities that I find interesting about being in a factory," he says. "The interaction between people and machines and technology that goes on in a factory, it's just fascinating."
His fascination continued through various factory-based internships while he finished his undergraduate work at Georgia Tech, and after graduation it led him to Intel, where he worked for three years before enrolling in the LFM program in 2003.
He has nothing but praise for the program, which he says forces him to see things from multiple perspectives. "I love the business side and the engineering side as well. I like being able to see both sides of MIT. To be able to go from a strategy class to an engineering class, on the walk over there you have to change your mindset, you have to get into a different mode. MIT is just such a great place, and MIT Sloan is awesome, and walking around and being involved in both parts has really been an incredible experience."
Looking to the Future
After he graduates this June, Jason plans to return to Intel, where he is looking for the right fit for his interests and experience. Though he will likely remain in the U.S. for now, he does not rule out the possibility of eventually returning to China , where his internship opened his eyes to the realities of doing business on a global level.
"Without going there, without spending time there, it's easy to just read the papers or go to class and think about China as this, not third world, but you get into this mindset of ‘What good does China do me?' We hear so much about China from debates on off-shoring and low cost labor to the sheer size of the market potential. But then you go there, and it's this place where people live, where they try to make a living. It's not one of those abstract places of financial gain."
That awareness, coupled with his "big picture" view of factory management, are what Jason says will stay with him long after his internship – that and his new-found love of authentic Chinese food, which has driven him to quickly become a connoisseur of local eateries. "I would eat real Chinese food for the rest of my life, if I could!"