I’ve spent the last few months on chemotherapy and have had to visit the chemo clinic every three weeks for four-hour refills. When I arrived for my first treatment, I was scared, having no idea what to expect and was not at all fond of having metal projectiles shoved into my body. I was taken in hand by one of the nurses there, who put me in a chair and then asked me if I had any questions about what was about to happen. My chief question was “What is it going to do to me?” but as nice as the nurse was, she couldn’t peer into my future. But it was nice to be asked. She stuck me and I started to get what felt like eight quarts of chemicals fed into my body.
The nurse checked back with me about every five or so minutes. During the treatment one of my injected chemicals made me freezing cold and the nurse, seeing it, asked if I would like a blanket. “I’d like two,” I said hopefully. She not only brought me blankets—she brought me heated blankets, which helped tremendously.
Each time I have gone to the clinic, another nurse has taken me to a chair, gotten me comfortable and started the drip. I have also had many interactions with the front desk and other nurses in the clinic. As yet, I have not come across one nurse who is not unfailingly polite, helpful, and clearly focused on my needs. Because this has not been my experience with medical professionals (or in retail situations), I asked to speak to the manager of the clinic to find out how she had brought together so many competent customer-focused people. I was able to make an appointment with the manager.
She said that she would interview folks to see if they were kind and if they were listeners. I asked her how she was able to determine this. She said that she could tell if people were listeners in the first five minutes of the interview. If the interviewee interrupted or was clearly more interested in their next comment rather than what the interviewer was saying, she crossed them off. She said determining kindness was more difficult. She said she used a combination of direct questions (Give me a time when your empathy saved a difficult situation.) but also body language. She began moving like a woman in pain, with grimaces and low moans. If the interviewee asked about what was wrong, she won points. If she listened carefully to the interviewer’s explanation of the pain, she won more points. The clinic manager then said that ultimately she listened to what her gut told her about the interviewee. She said that her process required interviewing many more people than similar clinics would interview for similar positions but she also felt she had a good group of people, a sentiment with which I agreed.
I believe there is a huge lesson here for businesspeople. If you hire kind listeners—not just for customer service positions but also for executive, managers, supervisors, line employees, salespeople, warehouse people, you will end up with customer-focused people. It will cost you more interviews. But ask yourself how much non-customer-focused people have already cost your company. JS
"In order to improve communications with others, a good first step is to understand your own communication style. Ask yourself:
-Sherry Bluffington, Ph.D.
This quote really has me thinking about how important it is to put yourself in someone else's shoes, especially when it comes to communication. It also has me thinking about how important it is to know yourself, and to understand the way you share information and communicate with others.
Do you know what your preferred method of receiving information is? Let's say you call someone and they are away from their desk. You know they respond quickly to email, but take longer to respond to voice messages. You have a choice, at that point, of leaving a voicemail or shoot them a quick email asking them to return your call. Let's assume that you are in somewhat of a time crunch and need to an answer relatively soon, and that the response should be fairly brief. Which do you choose?
If you know they are likely to check their email before voicemail (or if that Blackberry is attached to their hand), you can write a quick email asking them to call back when they are free. Or, you could leave a voice message, knowing they might not get around to checking it for a few hours.
I suppose much of this also depends on the depth and degree of the information you are in need of, but if it's a high level request and you can put yourself in the other person's shoes, you might get a faster response if you think strategically.
Do you know what your communication preference is? What is it? Leave a comment & let me know!
The five-year-old is now six, and getting sophisticated. The other night at dinner, a pan-Asian cuisine spectacular, he confidently announced, "You know, you have to use chapsticks to eat this kind of food." Taken aback, I dropped my chapsticks on the floor, occasioning grumbling from his grandmother and shrieks of laughter from the munchkins assembled, who thought it was all part of the act.
Reflecting on the incident later, I contemplated the dangers involved in applying close, but not quite right, tools to supply chain planning and operations. They often sound like the right thing to do, the right way to go. But, without closer examination, they could prove to be not as useful as hoped, or worse, downright harmful. The difference between chapsticks and chopsticks is minimal in print, noticeable upon inspection, and catastrophic in mis-application.
Whomever is selling either solution, is usually confident, and persuasive, though. It's up to you to discover when you need - and can benefit from - trying to use one or the other.
Note: ChapStick is a registered trademark of Wyeth Consumer Healthcare, which is being acquired by Pfizer Inc.
Softair Ag's CEO, Gabriel Weisskopf has hit another one out of the park. In a recent parable from his Opinion column in Air Cargo World, he recounted the tale of an uncommon service provider, led by its CEO, Hugo First.
In contrast with the parade of usual suspects who took PowerPoint and bombast to new lows, glazing the eyes and numbing the senses of the selection committee, Hugo brought only a flip chart and a bizarre attitude. After writing, "I am not here today to sell you anything," Mr. First admitted that he had really come "to find out what kind of buyer" he was dealing with.
Horror ensued. No brochures, no testimonials, no incomprehensible "value propositions." What was going on?
Actually, the approach is one that might signal bright prospects in a budding business relationship. After all, what kind of business partner is interested only in: 1) itself, and 2) how to get you to buy something, and soon?
Maybe the the right kind of service provider is one who's interested in the longer term, and how good the fit is between it and you. Or art least, wants to take the time tom understand you and your people before crafting approaches and solutions designed to actually solve real business problems in the supply chain.
Is this tactic sheer insolence on the part of a service provider, or an intelligent means of beginning to build the foundation of something sustainable - and valuable?
About a month ago, John Trentacosta wrote about a subject that no one wants to talk about (mhmonline.com). Fact is, an otherwise phenomenal supply chain can be brought to its knees when one partner in the chain runs into financial trouble. A business relationship with a pauper is not sustainable.
Some early warning signals - the canaries in the coal mine - include: requests for price increases, early payments, accelerated terms, or even financing support; late deliveries or quality degradation; failures to appropriately invest in IT and/or other assets; maintaining spend during downturns; delinquent taxes, deteriorating receivables, and extended payables; and bad press, among others.
Due duiligence on the front end can help prevent problems on the back end, but sometimes bad things happen to good people. That's when an early response team reaction to early warnings can pay off. Sometimes, you've got to pull the plug. But, often you can mutually develop work-out plans to let the troubled partner survive long enough to prosper -and to keep your supply chain humming in an unrelentingly competitive marketplace.
One of my favorite parts about Columbus, Ohio is the Short North. I enjoy all the independent restaurants and shops. I just read an interview with a local business owner, Ryan Vesler, owner of the popular t-shirt company Homage. He is opening a shop in the Short North soon, and has a great interview in the Metropreneur.
Before starting Homage, Ryan said he was selling vintage clothes on eBay-- he says it was that experience that gave the biggest insight into the importance of customer service and his relationships with customers.
This is such an interesting insight, particularly because the natural assumption is that e-commerce eliminates customer service.
What do you all think? Do you have any experiences with e-commerce and outstanding customer service, or a bad experience from a lack of e-commerce customer service?
Yesterday morning I caught the tail end of a story on NPR about a small social media company in Seattle, Social Strata, that offers unlimited time off for their employees. It began with one dedicated employee caring for her husband after an accident, and was ultimately extended to all ten employees in the company.
There are so many interesting business topics at play in this story. The two I am going to explore are trust and judgment.
In order for unlimited time off to be successful, employers must trust that employees are using the time off productively and appropriately.
If you trust that those you've hired to help grow your business, then you should trust that your employees are using the unlimited vacation time to actually take a vacation because they want to travel somewhere new, to take a long weekend to visit family far away, or use extended time off to care for a spouse or sick child.
You should also trust that they will return to work with renewed focus and gratitude for the opportunity to spend time away without consequences at work.
Next is judgment. Do your employees have good judgment? If they do, they are probably using their time away from the office because they would have a hard time focusing and being productive at work in the first place!
If employees use good judgment in work related tasks, their good judgment probably extends to other areas in their lives. Making it easier for employees to practice good judgment makes for more satisfied employees. For those who take pride in their individual and team success at work, this means employees will find a way to take their sick child to the doctor and also finish their deliverable, as promised, on time.
Social Strata and Netflix, two companies with unlimited time off, made sure to note that employees must finish projects and duties on time. This is an expectation employees must manage responsibly.
NPR reports that companies with unlimited vacation time are more productive and more engaged with unlimited time off. One piece I found to be interesting is that employees began taking actual sick days off instead of coming in to work to spread their germs to co-workers! Imagine that!
For those of you with decision-making power, would you let your company go to an unlimited vacation policy?
For those of you without decision-making power, how do the constraints of limited time off affect your use of vacation days?
Source: NPR.org, August 12, 2010
So, now I read that many carriers and service providers are struggling with capacity issues. They cut back, mothballed, whatever, when the economy turned down.
But, we've been preaching the need to get ready for recovery for the better part of two years. Those who didn't listen are now paying a price. Those who did are clearly going to wind up ahead of those who chose not to develop rapid response capacity alternatives.
It's difficult to work up much sympathy for either extreme: those who spent like inebriated seamen in the teeth of recession, or those who refused to believe that down cycles are always followed by up cycles. Either approach risks the success of the supply chains involved, and jeopardizes the market position of innocent partners in the end-to-end chain.
I should come as no great shock that the companies caught up in the failure to marshall capacity additions as volume picked up are likely not to be invited to next year's prom - plunging them back into the abyss of the depth of recession while the economy around them recovers.
A good friend of many years was recently bemoaning what he sees as the continuing decline of manufacturing in the US. His biggest complaint was that, every time a plant closes, its engineers hit the streets newly badged as "lean" consultants.
"Lean" indeed - a larger population trying to capture bigger pieces of a shrinking pie.
I don't have the data to challenge his contentions. Clearly, a lot of manufacturiung has left our shores over the past couple of decades. But, we still manufacture many things, although perhaps not on the scale of what General Motors plants used to look like. Certainly not at the employment and production levels of twenty years ago. That said, we're still in the early stages of in-shoring and right-shoring movements, and productivity - if not production - continues to climb throughout the sector.
It's possible that my morose amigo has seen his consulting and training business shrink because, at least in part, of other factors. More and better-educated and better-trained engineers and operators. Radical shifts in learning and knowledge transfer paradigms. Tired branding and terminology.
And maybe - just maybe - more companies are learning from one another in close relationships, and have focused, targeted, and empathetic partners to help them improve performance. Or perhaps they are getting help from subject matter experts with different styles, with different kinds of client relationships, and with different approaches to salvation that go beyond traditional projects and programs.
Seems to me that part of staying in the game - and ahead of the pack - in the 21st century is continual reinvention . . . within a supply chain, within a company, within a product, and within oneself. I'm just sayin' . . .
Costco continues to amuse and amaze by offering more than the usual products to pile in the cart. The Costco Connection magazine for June (www.costco.com, "connection") has a page devoted to "Fresh Views," with mini-features on: Wally "Famous" Amos (who has moved on to found Wally's Muffin Company),brainstorming techniques, and a quick summary of a 2009 book, Extraordinary Groups: How Ordinary Teams Achieve Amazing Results.
My big takeaways this month, aside from a hankering for a muffin or a chocolate chip cookie, were from Extraordinary Groups. One - not quite an aha! moment - was that a group dynamic can hinder, rather than stimulate, group productivity. The other was that "exceptional experiences can be thoughtfully nurtured and intentionally encouraged."
Good stuff, but the authors may have missed the larger point, which is that transporting tools and techniques for elevating group performance, to the operation of business relationships involving entire companies, can magnify and multiply the consequences of what might be accomplished.
Maybe an even greater message, though, lies in how Costco works at a fuller customer relationship by providing unexpected value, beyond the nuts and bolts of selling them tires and tube steaks.
I read an interview with the former editor-in-chief of a successful magazine in which she says that one of her proudest career achievements was creating the team she worked with.
She assembled a team she calls, 'a collection of the most talented, wonderful, kind and hilarious people ever,' and she is proud she 'never made room for someone who might have been gifted but was tricky or difficult.' Bear in mind that this is a woman honored by Advertising Age as an A-List Top 10 under 50 person-to-watch.
This reminds me of KWilson's blog post on teams.
It is another example of how a team that is a dream to work with has the potential to out-perform a team with an all-star lineup.
CSCMP's game-changing CEO Rick Blasgen really nailed it in his latest Direct Connection segment in the Q2 issue of Supply Chain Quarterly (www.supplychainquarterly.com). The general point emphasized the value of face-to-face human-level communications in an age of instantaneous electronic communication via numerous media.
Even the Millennial Generation, btw, recognizes this value, despite its fondness for electronic access to all manner of information (and entertainment). My deep suspicion is that way too many people of all ages like to hide behind the impersonal facade of email, texting, tweeting, twittering, flittering - anything that buffers them from interactive personal contact. But, that reflects a personality disorder rather than a generational "preference."
Rick went on to promote the idea that communications leads to collaboration, which can be transported from individual application to organizational relationships. I take heart - when our profession's leaders get the picture this clearly, there's hope that the profession itself will follow.
Things get tricky at this point. Organizational collaboration can't really be - as in the George Gershwin song from Porgy and Bess - "a sometime thing," done when it's convenient for one supply chain partner or another. It needs to be part of day-to-day, and everyday, transaction execution within business relationships.
Now, the hard part. Collaboration doesn't just happen; relationships don't blossom just because they're planted and watered occasionally. All this is part of conscious investment of time and resources in creating the right kind of relationships with the right kind of partners, and all with a business purpose.
The investment, consuming as it may be, is where the big payoff in supply chain management is, though. It transcends momentary gains and losses when designed to deliver sustainable end-to-end marketplace advantage. And, the wunderkind at the end of the table who's texting while you're talking is part of that set of organized relationships.
Each week, I make an effort to read the Sunday New York Times' Corner Office interview. Last Sunday the interview was with Dan Rosensweig, CEO of Chegg. The title was compelling: "Always Thank Your Your Star Players." That's great advice. Everyone likes recognition for their efforts.
The most interesting piece of the interview, in my opinion, is the way Rosensweig begins executive staff meetings. He notes that everyone is very wired these days - technology is portable so it's particularly hard to tear ourselves away from email, text messages and other distractions.
In an effort to be "be present," he asks each executive at the meeting to share two things on their minds, one personal and one professional. That eases the transition into the meeting, and helps with focus.
Most importantly, in my opinion, is that it puts the relationship before the task - which is a key component to a strong relationships in business.
Stadia emptied, vuvuzelas silenced, the Netherlands team has four years to contemplate what might have been in their resurgent prominence in the world of World Cup soccer. FIFA has a shorter time to assess the salutory effects of public hanging for sight-challenged and judgement-impaired referees. In the meantime, we'll don our colors and pull for Ajax, the pride of Amsterdam.
Back in the real world, the good news is that our universe of supply chain management is making headlines. That's also the bad news. USA Today's July 8 Money section carried a top-of-the-fold feature on shipping bottlenecks and their negative impacts on cost and timeliness. Our friend Rosalyn Wilson was cited (but CSCMP's production of her annual State of Logistics study was not mentioned - another rant for another day).
The problem was blamed on recession-driven capacity cutbacks in air cargo, ocean shipments, and truck transport. Adding container shortages to the mix makes marine transport the most severe manifestation of the problem, with shipping volumes increasing while Chinese container manufacturing has been seriously curtailed.
But, some of the damage was self-inflicted, and some continued difficulty is a matter of choice - an investment in short-term pain in exchange for a payoff in longer-term financial pleasure. Carriers (of all types) embraced sharp price cuts in order to keep operating - even at a loss - when times got tough. Many shippers took advantage of a perceived desperation, and turned the screws even tighter.
Now, the carriers want to get well - and fast. The USA Today feature reports a 150% increase in transportation costs (following the historic decline of 2009). Significant additional increases lie ahead, with re-activated capacity lagging demand. Some observers maintain that the ocean carriers' recent practice of "slow steaming" is a faux green maneuver to mask a cynical manipulation that reduces effective capacity - and creates unholy pressures for further upward price movement.
Despite the fine words and high concepts coming from many players in the global supply chain community, this scenario reflects a sobering reality about talking the talk versus walking the walk.
How often must we repeat these cycles of adversarial win/lose (and lose/lose) industry-wide confrontation? At some point, the strategists among us will learn to think, like Bobby Fischer, four or five moves ahead and build long-term business relationships. Real relationships will insulate genuine partners from the debilitating skirmishes that perpetuate the paradigm of creating immediate transactional focus, short-term one-sided gains, and long-term supply chain underperformance.
We know better; now we've got to do better. But, doing better requires that everybody - shippers, carriers, service providers - gets in the game. And plays to win-win.
Kevin Cornish (atrisk.net) recently blogged about situational values and fake parts in the supply chain. His best line? ". . . the human element matters more than ever . . ."
Citing the loquacious, but nearly always on-target, Tom Friedman from the New York Times, Cornish introduced the ultimate reality that all partners in supply chain relationships must become more responsible because we can't shield ourselves from the irresponsibility of others.
Right on, Kevin; right on, Tom!
But, do consider this. The issue of values among supply chain collaborators would be much easier to deal with in those cases of building the right kinds of relationships with the right kinds of people (i.e., organizations) in the first instance.
Think about the potential for financial and emotional catastrophes lurking in trying to extricate oneself from an E&J Gallo-induced marriage to a pole dancer of recent acquaintance.
It's much tougher to reconcile value systems after the fact, when commitments have been made on a superficial basis, cost per transaction for example, rather than on the value of integrated and collaborative efforts in a competitive marketplace.
Kathy: How do you think that your skills and ability in handling business relationships have evolved over your career?
Todd: I think that from where I started to where I am now I have a better appreciation and understanding of my customers’ business. And I think that by that evolution I’m able to talk more of their talk, obviously bring more value because I do understand their business. And by virtue of bringing that value, I believe that creates a better relationship. There is trust, there’s experience, there’s information flow, all those things.
In turn, again, I think that understanding your customers’ business builds a whole foundation for a relationship and things go along with that.
Kathy: So is it just your maturity or your experience of understanding the business?
Todd: Understanding through time, their business, and all the intricacies of their business and what they believe is value, what their issues are as they go about their day-to-day. Of course understanding what we do for them and put it together. These processes build relationships that are pretty much invaluable as you get to the end of the day.
I really believe when it comes to selling and the art of building relationships some of this is just inherent. I think you either have it or you don’t. I don’t think there is an in between.
So yes, you can get a better foundation, a better baseline, but when it comes down to it, to answer your question—I had somebody to show me the door, but when the door was open I inherently knew the things necessary to take those relationships and build on them.
Kathy: Do you look for that in hiring?
Todd: We sure try.
Kathy: It’s easier to teach them product than it is to teach them inherent skills.
Todd: It really is. And unfortunately we’ve hired people and we’ve had to let people go, not because they are not good people, but because when what we are trying to do in the market somebody can be very technically based and understand products.
But when the day is done if they can’t make a connection with somebody and build on that, then it’s not going to work. So unfortunately we’ve hired and let people go simply because they got to a certain point where they had all the technical skills in the world but that inherent piece, relating to a customer, couldn’t be met.
Kathy: Do you think it can be taught?
Todd: I don’t think it can, I really don’t. Some people are better than others in terms of how well they are able to get in there and connect.
One of the conversations I had, Kathy, you know this, is we had a regional meeting a few months ago. We were talking about our staffing and the people. We really tried to assess our competitors. We know what we are about. We know the things we are doing. But we really tried to put our shoe on the other foot of our competitors and figure out what they do better.
One of the things that came up from one of our formidable competitors is that they are just “guys guys,” as we put it. They put a team together that people want to be around. This is the stuff we are talking about—the inherent ability that they hire the people who have the innate ability to get in and make things happen, to build relationships.
We have better technical people, I’m convinced. But at the end of the day a lot of our customers want to be around people they want to be around. I don’t think you can teach that, I think you know it.
Kathy: All the inside sales people that I’ve listened to, the relationships that they have with their customers, is amazing. How do you measure it? How do you know if they are developing good business relationships?
Todd: How I gauge it today is far different than how I used to gauge it. Today, as I look at it is, are we able to use this relationship to make money? Because their—our customers’—job, and I don’t begrudge anybody, everybody is doing the job. But their job is to buy the best they possibly can. Our job is to sell the highest price we possibly can.
Relationships give you the opportunity to negotiate or give you an opportunity to do the work. I’m gauging the relationship today as, ‘Can you do all that and at the end of the day you are making money?’
We want better relationships. We don’t have a training program for that because, again, it is right back to what I said. We know inherently people either have it or don’t. We put them in the position. We want them to get to know people. We want them to do the things that they are doing.
But our managers now are really trying to use relationships. At the end of the day, are we able to use those relationships to make money?
It is not any more or any less just trying to be equitable with our customers. We are just trying to find that equitable approach where we are both winning in that situation.
Kathy: What advice would you give people, be it in sales or finance or operations, who really want to develop their business relationship skills?
Todd: Unfortunately you tend to live in the snapshot of where you are today. Things are changing so fast that you can’t assume anything anymore.
You can’t assume you have the relationship. You can’t assume you have the share. You can’t assume that you are doing great on service.
Make sure you understand what is in front of you because in some cases we are assuming a lot of things out there that just aren’t the case. Again, the economy has forced people to really do things they wouldn’t even consider doing a year or two years ago. That’s the assumption piece I was talking about. We just can’t assume much.
But I still believe on the relationship side of things, that at the end of the day it’s still what is keeping us in the game.
Price is big, but that same survey I mentioned, price was 3rd out of whatever category. It was still about trust and still about the product, the value and then of course price was there. It’s not the end all be all. But I think relationships are still giving us that opportunity to succeed to the best of our ability in the market today.
Have we over-outsourced our supply chains? Michael L. Hetzel, a vice president at ProQC International, says that we in the US have, in a paper distributed to American Society for Quality (ASQ) members. I believe that we have done so in Europe, as well.
Hetzel maintains that extended and distant supply chain structures have isolated and siloed procurement, quality, design, and logistics functions, with each focused on its own objectives and measurements - to the detriment of the end-to-end supply chain.
The stunning realization in all this is that loosely-connected functions in the supply chain are more likely to fall apart under stress than a strong system of better-integrated links would be. There may be no stronger argument than this for the value of - the necessity for - carefully structured business relationships among supply chain partners.
Perhaps near-shoring, in-shoring, right-shoring and the like might mitigate the consequences somewhat. But, the risk of supply chain catastrophe in a world of bankruptcies, sudden and sometimes unforseeable communications and logistics breakdowns, economic turmoil, civil unrest, government actions, and Icelandic volcanic eruptions is simply too great to do otherwise.
CNN Money has a great question and answer piece from the manager of a team of customer service representatives.
She wrote in by saying that 99% of the time, she is able to resolve customers’ problems amicably, but every now and again, she has to field a call from an irate customer. Her usual response is to have the manager one level above her take the hostile call.
She says that manager, in response, blames her and her team of customer service representatives, and as a result, this deflates her team’s morale.
The question posed in this article is: How do you handle difficult customers? Who comes first at your company, customers or employees?
Several people weighed in on this conundrum, and the adage the customer is always right pops up more than once in the article.
I can understand the significance of the customer being right. A company’s success—certainly the financial success, but success overall-- depends heavily on the relationship with the customer.
The morale of the employee team is also very important and imperative to a company’s success. If a company cannot retain its employees and has a high turnover rate, it sends a message that the company is not a friendly environment in which to work. Who wants to support a company that does not respect its employees?
In the end, I think it is important to find the balance. Yes, a customer is paying for your product or services, so their needs and expectations must be met. That transaction is very clear.
But I also think it is paramount to treat employees with respect and to show appreciation, because those people are representing the company. Their interactions with customers are a direct reflection of the brand. Therefore, their satisfaction is necessary to maintain the brand’s reputation.
So, what do you all think? In a situation like this, who would you put first—customer or employee?
The US Department of Transportation's Secretary, Ray LaHood, announced the inception of the "America's Marine Highway" program in April (Logistics Management, May 2010; www.logisticsmgmt.com). For those weary of bailouts and stimuli, the initial grants involve under $100 million (with an "m" not a "b").
Are short-sea and other maritime transport modes really viable in the US? I don't know. I do suspect that longer-distance river transport could be more employed than it is if: 1) shippers stopped to think about it, and 2) locks and other infrastructure elements were upgraded and maintained. But, it does seem reasonable that, if Secretary LaHood's concept embodied compelling merit, profit-motivated players in the private sector would have jumped on the notion quite some time ago.
It's appealing that there might be environmental benefits to the movement of goods over water instead of over the road (either rail or highway). In the wake of BP's catastrophic misadventure in the Gulf, there might be some concern about the environmental risks of a maritime shipping accident involving who knows what kind of cargo.
In the broader economic equation, I'd like to know if marine highway proponents have considered: 1) the cost of added handling and delay if a water link were to be added to supply chains; and/or 2) the added complexity of introducing more players into the complex business relationships that make up end-to-end supply chains.
The Q1 issue of CSCMP's Supply Chain Quarterly (www.supplychainquarterly.com) features an article, Time for a checkup?, that suggests a thorough supply chain examination might uncover logistics cost reduction possibilities of ten to twenty per cent.
The approach proposed is well-thought-out, well-structured, comprehensive, and useful. And, yet, I couldn't shake the lyrics of a children's song, "Miss Lucy called the doctor, Miss Lucy called the nurse . . ."
My challenge with the piece is that the program appears to contemplate a more-or-less static and self-contained system, with singular control and direction. Some mention is made of variable service levels for different products, customers, and/or markets, and one illustration includes a cryptic note about "trucking and other service providers."
Ultimately, my contention is that optimizing one element of an end-to-end supply chain, without the involvement - and collaboration - of other players in the chain, risks sub-optimizing the whole. Not to mention that it fails to leverage the knowledge and experience of all partners in the chain.
The authors, Dr. Timm Gudhus, a consultant from Hamburg, and Dr. Herbert Kotzab, a professor at the respected Copenhagen Business School, do allow that "there continues to be a gap between logistics theory and business practice." It is possible that, in some dimensions, business practice might be out in front of theory. My hypothesis might be that the audit process described could be orders-of-magnitude more effective if greater weight were to be given to the integration and relationships among supply chain partners, rather than being limited to the mechanics of product flow.
Okay, we've heard from the doctor(s) and we've heard from the nurse. I've no clue what we might hear from the lady with the alligator purse.