Question-and-Answer Session
Operator
Our first question comes from Steven Missen with Mindpro Capital. Your line is open.
Steven Missen - Mindpro Capital
Yeah, a couple of questions Walt. Obviously it’s been very challenging since you joined the company last year but I know you guys should be able to light the ship. A couple of things regarding operational improvement initiative, what are you guys doing in terms of factoring TPM Six Sigma throughout your plans to overall improve throughput? I know you talked about production levels being down, so what do you plan to do for 2008 to help your plans and prove throughput with some of the different types of initiatives out there?
Walter Rosebrough
I would step back... first of all the production capacity constraint has nothing to do with either lean or six sigma type initiatives. It’s the fact that we started a new plant in Mexico. So first of all that issue is clearly not a function of those variables.
Steven Missen - Mindpro Capital
Okay.
Walter Rosebrough
Having said that, we have, and I’ve been actually pleased since coming on board that the guys in production have begun a couple of years ago working down the TPS, Total Protection System or lean system. We have a long way to go. We are early in that process. But that’s clearly an area that is, in my view, of great interest. Particularly on the manufacturing side, I believe that is the preferred approach to improving our processes and that’s something we will definitely be working on in coming years.
Steven Missen - Mindpro Capital
In terms of metrics to measure manufacturing facilities, are you looking at OE, Rona? A lot of executives in the industry [semiters] are measured upon both types of metrics. How are you guys measuring yourself to see, hey are we doing the right job in the right plant?
Walter Rosebrough
We do look at profitability and return metrics. I will tell you that when you’re really working your way down the lean path the single best metric to look at is inventory because inventory reduction is a significant part of that process, getting flow. And that is clearly where we are not excelling right now, so we have great opportunities for improvement there.
Steven Missen - Mindpro Capital
And what targets do you have for inventory reduction? Have you set any target levels for this year, to reduce it by a certain percentage?
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