Solving the Supply Chain Mystery

I once met a regional sales manager of a large consumer good company at Davao City, the biggest city on the island of Mindanao, 978 kilometres (608 miles) south of Manila, Philippines. 

As I was introduced, the RSM looked at me for a moment and smiled broadly.

“You’re a supply chain consultant?”

Before I could say “yes.”  He says: “I’ve seen marketing consultants, sales consultants, and organisational development consultants, but this is the first time I’ve ever met a supply chain consultant!”

“Welcome, welcome!”  He shook my hand vigorously.  “I hope you can help us.” 

“You see,” he continues, “the supply chain is a mystery to me.” 

“Every time I submit a customer order, I never know what happens after,” the RSM said. 

“I don’t know when stocks would arrive.  I don’t know what and which products would arrive. And I don’t know how many would arrive,” the RSM said. 

He pointed to a few shipping container vans just outside the warehouse office where we were meeting and shared: “container vans like those would just show up and I wouldn’t know what are in them.” 

“I wouldn’t know if the containers have the products I ordered.  At the end of the month, five or more containers would arrive at the same time and I wouldn’t know which container would have the products I need the most.” 

“I’d spend much of my time calling the logistics office in Manila to tell me what’s coming and when but I never get a clear answer.  I spend a lot of time following up the deliveries of products I need when I should be using the time selling to customers.”

“As this is the first time I’m meeting a supply chain consultant, maybe things can change.  Maybe you can solve the supply chain mystery!”  The RSM said.

On the surface, the problem had a straightforward answer.  The consumer goods company’s logistics office just had to share shipping schedules with the RSM to tell him what’s coming and when.  That would right there solve the problem.

The problem, however, goes deeper. 

Why isn’t logistics sharing the information in the first place? 

Why is logistics not communicating with their sales counterparts? 

And aside from logistics, are other departments even communicating with each other?  Do the consumer goods company’s executives communicate with vendors, customers, 3rd party providers, and stakeholders?  Or are they too preoccupied with other problems they consider urgent?

Communication has always been a problem with companies, especially big companies.  Departments hardly talk to each other as they pursue pre-set goals or put out fires within their work boundaries.  If there would be any communication, it would be in the form of phone calls, memos, reports, or hours-long meetings.

Communication in the management sense, however, does not consist of meetings, memos, or phone calls.  Communication in the management sense is about rapport, i.e., active two-way connection between boss and subordinate, between peers, and between people from differing departments and separate enterprises. 

Communication enhances the flow of information in which individuals and groups constantly share pertinent important information with the purpose of meeting communal objectives for the mutual benefit of all concerned. 

So why aren’t companies doing that?  What’s the problem?  Why does a consumer goods regional sales manager have trouble getting in touch with people he sends orders to and waits for deliveries from? 

Communications within and between enterprises require support structures and systems.  Many companies, however, don’t have adequate structures and systems.  This is because these companies have been brought up on a culture of silos, in which managers and employees work in places that have goals and targets of their own. 

In the consumer goods company where the RSM works, there are performance measures and strategies assigned for every department: 

  • Finance seeks higher profits, more cash-flow, and higher rates of returns;
  • Marketing wants brand leadership, strong geographic distribution, and positive consumer acceptance;
  • Sales wants higher turnover, record-breaking selling volumes, and a high level of retail presence;
  • Manufacturing wants continuous uninterrupted production;
  • Logistics wants fewer pending orders and lower freight costs;
  • Purchasing prefers bulk purchases with large discounts on prices.

The consumer goods company’s organisational chart shows a hierarchy of managers and employees working in different functions with different scopes of work each with specific roles and goals.  The chart in itself lays out a plan of silos where individuals and groups work separately.

Separation means differences in priorities and interests.  What’s mine is mine, what’s yours is yours.  Each to our own.  I mind my business; you mind yours.  These become the thoughts of people within the company. 

What more for those who are not from the company.  We’re inside; they’re outside.  Enterprises might as well be islands in an ocean and many are just like that. 

Organisational development trainers and executives have recommended and implemented many ideas to bring people within and even between enterprises together.  They’ve introduced radical solutions such as “flat” org structures that eliminate many layers of authority and they have encouraged “campus” work ethics where individuals from different disciplines work together in open-plan shared work spaces. 

The consumer goods company the RSM worked for had “brand teams” which had marketing managers lead groups consisting of representatives from sales, manufacturing, finance, and R&D.  The brand team would “own” a particular brand of the company and be accountable for its success.  It was a way to break down barriers between functions. 

Unfortunately, these OD and brand team initiatives have only shown limited success.   At the end of the day, the functional employees and their managers go back to their familiar places of work and focus on the priorities of their departments.  The gates of their workplaces close once again as they resume pursuing their own urgent individual targets.   

Supply chains offer a way out of silos.  Supply chains are grounded on relationships.  Relationships, in order for them to prosper, require communication. 

In supply chains, operating functions work with each other to transform and move materials and merchandise from one point to another, one process to the next, one step at a time.  Connections and communications are what makes a supply chain tick.  And for a supply chain to work, it must tick with every part in clockwork synchronicity. 

When the RSM doesn’t know what’s coming and when, the communications and connections aren’t working.  The supply chain link from the transportation of the product to the receiving warehouse is broken.  The supply chain in this sense is not working. 

Hence, the first thing I urged for the consumer goods company is communication.  Fix the link, establish the connection, make active the communication not only between logistics and the regional sales manager, but also between logistics and other RSMs, logistics and transportation providers, manufacturing and logistics, the inventory planners and logistics, manufacturing and inventory planners and logistics, purchasing to planners to manufacturing, purchasing to vendors. 

There has to be rapport.  Not memos.  Not meetings. Not once-a-month reports.  Not emails or text messages.  But active two-way communication of shared information, shared planning, shared direction, and shared implementation. 

It doesn’t take a world-class detective to solve the supply chain mystery.  Just taking the initiative to communicate would provide much of an answer.

About Overtimers Anonymous

Seen and Not Heard, Speak Only When Spoken To, Why It’s Good to Listen

In the old days (as late as the mid-20th century), many parents told their kids that children were meant to be “seen not heard” and that children can only “speak when spoken to.”

This rule prevails among many families, never mind if it’s the 21st century and some people say we should be more liberal with our kids. 

Many enterprises apply this rule in their organizations too. 

In one company I was consulting with, the executive vice president disliked getting interrupted or being asked questions by her subordinates.  When they do, the EVP yells at them.  The subordinates believed they didn’t have the privilege of speaking out; only their bosses have. 

Whenever I sat in the top management meetings of large multinational corporations, I noticed only the executives seated around the conference table would be allowed to speak.  Those middle managers and staff who sit at the periphery in less comfortable chairs would only talk when they’re addressed.  Otherwise, they were expected to keep quiet.  (They can laugh at the chief executive’s jokes though).

It seemed that such an old-fashioned rule stifles the sharing of information and the emergence of innovative ideas.  And because of this, executives had become out of touch with their own people.  Instead, the executives form their own opinions and solutions and when they address their staff, they expect immediate agreement. 

New enterprises attribute their successes to the teamwork of their people.  This gets forgotten as enterprises grow in size and complexity.  But size and complexity shouldn’t be the reasons for not engaging with everyone in the organization. 

Whether big or small, everyone in an organization has always something to share.  Many of what they share may seem trivial but chances are there will be a gold nugget of an idea in the information they impart. 

So, what should an organisation do to encourage information sharing?  Meet with the people at their level is the first thing that comes to mind.  Go listen to them at their workplaces.  Note I said “listen” not “talk.”  Listening is the real key here.  It’s amazing how much an employee can open up when he or she realises there’s someone actually willing to listen. 

It will take time of course.  Some employees won’t open up at once especially when they’re face to face with the person who they believe holds the power of the organisation.  There is effort involved.  There always is when trying something not really done as much before.

But I think many have testified to the benefits of listening.  It promotes trust for one.  When the people of an organisation trust their executives more, when they see that executives are humans just like them, they tend to be more open to change.  At least they would be more open to share information as well as receive feedback from the executives. 

Some of us grew up in families where we were not allowed to speak unless spoken to.  This unwritten rule somehow carried over to organisations which some of us work for today.  It stifles information sharing and hampers innovation.  Executives can break this rule by simply going down to the level of their employees and listening. 

Listening builds trust and trust opens up communication which leads to information sharing and innovation.  Innovation drives growth and competitive advantage.  And it doesn’t cost a thing.  Just some effort will do. 

About Overtimers Anonymous