Problems are Doorways to Opportunities

Since the start of 2021, semiconductor chips, which are used in cars, trucks, computers, and smart-phones, have been in short supply.  Supply has been so short that automotive companies have shut down assembly lines and consumer electronics corporations have delayed roll-outs of new products. 

Bloomberg reported in its September 22, 2021 Supply Lines newsletter that the gap between “ordering a semiconductor chip and delivery is still growing.” 

But four years before in 2017 (see chart above), it was already taking at least 10 weeks to deliver a semiconductor chip from time of order.  So, while businesses in 2021 anxiously wait up to 20 weeks for their chips to arrive, why were industries tolerating long order-to-delivery times of up to 10 weeks in the first place?

The dictionary defines a problem as an “unsatisfactory situation.”  It is a “state of difficulty that needs to be resolved.” 

Many of us equate problems with crises and disruptions, that is, we see a problem only when it hurts us such that it becomes urgent to address it. 

Hence, we tend to avoid them or try to resolve them as quickly as possible.  The fewer problems we have, the better, we usually say. 

The dictionary, however, also says it is a “a question proposed for solution or discussion.” 

Problems can be doorways to opportunities, in which if we think of them that way, we should seek them out and solve them for the ideas that would benefit us. 

Enterprises and even governments are scrambling hard in 2021 to fix the semiconductor chip shortage that has crippled factories and caused supply shortfalls of many products, from cell-phones to computers.  Most saw the problem when order-to-delivery lead times extended from 10 to 20 weeks.

If enterprises in 2017, however, proposed the “question” of shortening the supply lead time of 10 weeks, and found a solution, would industries be undergoing a crisis in 2021?  Wasn’t there a way to bring the number of weeks of lead time down to 4 weeks or even less? 

It was obvious that since 2017, company executives had accepted the 10-week order-to-delivery cycle and adjusted their inventories and production schedules to cover for the waiting time.  Executives managed the 10-week lead time into their financial forecasts.  The 10-week lead time was not considered a problem. 

If one enterprise in 2017 had seen the 10-week lead time as a problem rather than as an acceptable fate, and in the process of “discussion” found a “solution,” one wonders how much of a competitive advantage that enterprise would have in 2021. 

It’s never really worthwhile to ask “what-if” questions especially after the fact of a crisis.  But in the process of problem solving, as a question becomes clearer, it would have been likely that a solution would have addressed future adverse situations. 

As companies see their businesses compromised by the semiconductor shortage of 2021, it becomes more sensible to seek out the problems and pose the questions for “discussion” and “solution.”

For the pain many had been experiencing in 2021, it would have been worth it if they had only sought and solve problems then. 

It’s never really good to dwell in the past unless we learn something from it. 

About Overtimers Anonymous

When Increasing Capacity Becomes a Priority

One Sunday morning, a homeless woman at a traffic intersection was approaching cars and begging for alms.  Some drivers give but most don’t.  But the woman persists anyway; she shows a sign saying she’s homeless and asks for money for food. 

I thought as I observed the homeless woman:  if the government could spend so much setting up facilities to quarantine patients infected with the CoVID-19 virus, couldn’t it also spend a little more to house the homeless who roam the streets?  At least the government could provide a place to sleep and some food and water to homeless people even for a brief time so they’d be able to find work or resolve whatever issue that brought them there in the first place? 

The frequent answer to such a suggestion is a lack of resources.  The government would say they don’t have the budget to provide such for homeless people. 

How then were they able to provide for CoVID-19 infected people?  That’s different, a government person may say.  It was a national emergency and the virus is dangerous and life-threatening. 

But isn’t being homeless and without food dangerous and life-threatening too? And at this point, the government would not pursue the argument.  With a wave of a hand, they’d just say there is no justification to provide the resources. 

Not only governments but also enterprises hesitate to provide resources even when the demand would be there.  Executives would cite limitations in budgets or capital.  They would prefer that the operations spearheading supply reach their points of maximum capacities before asking for any investment in additional capacities. 

And even if they are at that point of maximum utilisation, executives would require proof that operations are also at their highest efficiencies.  Executives by common practice, will want an organisation to exhaust all of its means before considering any investment in additional capacities. 

If executives can avoid investing in new capacities, they will.     

This is why factories run flat-out to supply products before companies realise they need to build new production lines.  This is why airlines wait until flights are overbooked or ticket counters turn away passengers before they add new planes to their fleets.  This is why some restaurants don’t expand their dining areas or hire new staff until they see patrons waiting for tables or walking away because they couldn’t get a waiter to serve them.    And this is why internet companies don’t install new equipment until they see slowdowns in downloading speed or backlogs of subscribers. 

It doesn’t occur to many enterprises that investments in additional resources should ideally happen before operating limits are reached. 

At the height of the CoVID-19 pandemic in New York City, USA, in late March of 2020, the US Navy dispatched the USNS hospital ship, Comfort, to assist the city’s medical services. 

New York was low on available beds and staff to treat a surge of CoVID-19 patients.  New York City welcomed the Comfort, with its 1,000 beds and trained medical staff.   

But instead of helping, the Comfort would only take non-CoVID-19 patients.  The US Navy thought that by taking in patients not infected by the virus, New York could free up space in their hospitals for the CoVID-19 patients.  The Comfort’s beds were also spaced closely side by side so in the first place, the ship could not enforce social distancing for CoVID-19 patients.

The Comfort ended up treating 20 patients at its first week as New York’s hospitals continued to struggle with crowded wards and weary staff.  After so many weeks of sitting idly by hardly utilised, the Comfort departed New York City. 

The story of the Comfort was a lesson for leaders, if not an eye-opener for executives.  One should not wait till an issue becomes extremely urgent before acting.  

But nobody did learn.  Nobody did realise.  Many executives of governments and enterprises have forgotten the story of the Comfort. It has been relegated as one more passing tale of the pandemic era.  Meanwhile, wave after wave of virus infections months after the story of the Comfort have led to overcrowded hospitals and more deaths due to patients unable to be admitted for treatment.   

We shouldn’t wait till the last minute before deciding we need more capacity.  It isn’t complicated to calculate how much more we need if we can see the rate of  growing demand and anticipate when our resources will no longer be enough. 

I gave money to the homeless woman that day but I saw more homeless people begging on the street corners the weeks afterward. 

We still haven’t learned. 

About Overtimers Anonymous

When Idle is Not Necessarily Bad

A chief executive officer (CEO) of a large corporation was touring a manufacturing facility.  As with all CEO’s touring a factory, he had an entourage of executives accompanying him as he walked and shook hands with workers on the production line.

As he strolled through the facility’s main line where the most important manufacturing processes took place, he noticed a uniformed operator sitting idly on a chair with his hardhat over his eyes. 

The CEO asked the plant manager accompanying him what the operator’s job was.

The plant manager answered: “That man, sir, is our annealing oven operator.  He watches the oven’s gauges and adjusts the temperatures when needed.”

“I’m sorry for you having to see this man just sitting there doing nothing,” the plant manager said apologetically.  “I’ll go tell him that he should be working.”     

“No, you don’t need to do that,” the CEO replied.  “The operator is doing precisely what we want him to do. Just by the fact that man is sitting there doing nothing, it means that the annealing line is operating smoothly.”

The CEO then approached the operator who quickly got up when he saw him coming.  The CEO shook the worker’s hand and said, “You’re doing a good job, keep up the good work.” 

What do we do when we see a subordinate worker doing nothing at his work-station or desk? 

Some bosses scold their employees for just sitting around.  Some bosses would chide supervisors for not assigning more tasks to employees.  A worker who’s not working is not productive, a boss may say.

On one hand that may be true especially if the idle worker in question had deadlines to meet.  But in most of my experiences, it would be the opposite.  The idle worker would actually be the most productive.   

Like the operator the CEO noticed, idle workers may have no problems to fix.  The operator had already set his equipment and did all the adjustments needed.  He had done his job making sure the annealing line wouldn’t fail and there would be no issues in the quality of items being processed.  He would of course check the gauges now and then to make sure everything is all right. 

We sometimes think that idle workers should be doing something more.  If we see an office worker taking longer coffee breaks than usual, we’d somehow try to think of giving more work to that person to make him more productive.  If we see other workers sweating away while another is just sitting around, we sometimes get the first impression that the idle worker doesn’t have enough work. 

Some bosses believe workers are just too lazy to find other better things to do or problems to solve.  We sometimes conclude that workers in general lack initiative or a sense of ownership. 

So, we try to push workers to be creative problem-solvers.  We command them or offer them incentives to take the initiative to find improvements for the workplace.  Creative ideas are starting points for higher productivity, after all. 

But we have to beware that there are pitfalls to forcing workers to find and solve problems.  Workers might end up finding and solving problems for the sake of it; they’d just identify stuff that seem like problems but aren’t.  Trivial issues that don’t offer any benefits would just be reported.  We would end up back to square one:  just finding work so an idle worker won’t be idle.    

In my experience, many idle workers are veteran workers who have by experience learned how to do their jobs so well they end up with extra time on their hands.  Because these veteran workers have accumulated much wisdom about their jobs, it has often become a good idea to assign them as mentors to younger, less experienced workers.  Veteran workers can be the best mentors. 

And more often than not, we don’t have to ask.  Veteran workers who have stayed long at their jobs usually volunteer to train their peers.  We managers just have to reinforce this by recognition and praise, by showing genuine appreciation. 

Veteran workers also have many ideas for improvement.  Rather than forcing upon them assignments to find and solve problems, it usually is a good idea to just ask them first, informally.  Questions like, “what do you think this factory needs to get better?” or “what’s your opinion about laying out the office differently?”  usually generate some interesting eye-opener responses from veteran workers.

True, some veteran workers wouldn’t offer much at the start.  And most of the time, that’s because there was some bad history involved.  A manager before you didn’t appreciate the veteran worker for a previous suggestion or a manager simply ignored an idea a veteran worker offered. 

This is where investing in listening comes in.  When one can make a veteran worker open up, one may be pleasantly surprised by the treasure trove of ideas and knowledge that come out. 

At that point, the veteran worker is no longer idle. 

About Overtimers Anonymous

Weather Forecasting vs. Demand Forecasting: A Case of Different Expectations

This Photo by Unknown Author is licensed under CC BY-NC

Meteorologists predict what the weather will be like, whether it be tomorrow or the next few hours. 

Demand forecasters predict what customers will buy and how much, whether it be next week, next month or next year. 

When a weather forecast is wrong, we don’t hold the meteorologist accountable.  We may grumble about the inconvenience caused, but we won’t condemn him or her. 

When a demand forecast is wrong, some executives hold the forecaster accountable.  Some condemn him or her. 

We recognise meteorology as a science.  It uses data like barometric pressure, temperature, and wind speed.  A weather forecast is based on hard data and usually isn’t too far off from what really occurs.  We can excuse the meteorologist if it rains at 7:00am instead of at the predicted hour of 6:00am. 

We don’t recognise demand forecasting as a science.  We see it as a management art mixed with some mathematics using historical data.  If the forecast is off by as much as a margin of 10%, we see it as flawed.  We believe the forecaster could do better even if there is a lack of hard data. 

Weather forecasts for the next 24 hours are more likely to be accurate than predicted conditions in a week from now.    

A demand forecast of how much of an item will be sold tomorrow is no more accurate than for a prediction of how much will be sold on Wednesday next week.  The margin of error of how much customers buy tomorrow versus forecast usually is similar, if not more, than the margin of error next week. 

We pay greater attention to the forecast of a typhoon’s path in the next hour than the forecast for the next day.   We care more what’s the weather going to be like this morning than what will be happening later tomorrow.    

We pay more attention to a demand forecast at the beginning of the month than one towards the end of the month.  We care more for what we think we will sell next month than what we will sell this month, especially if this month is almost over.  We clearly can see what we will be selling this month as it nears its end so we’d find an updated forecast for the current month as not really useful. 

We accept the outcome of the weather, never mind if the forecast was right or not.  We can’t control the weather after all and meteorology looks complicated as it is.

We see demand forecasting more as speculation and something we can influence.  If demand forecasts turn out close to the outcomes we want, we celebrate and praise the forecaster.  If things turn out not what we want, we find faults in the system and in the performance of the forecaster.

Meteorologists push to improve the science of their forecasting by investing in technologies and state-of-the-art equipment such as satellites and sensors. 

Enterprise executives push demand forecasters to be better in their predictions with hardly any investment in science or technology.  The most enterprises will do to improve forecasting is to expand market research and customer surveys. 

We adapt our behaviours and plans to the weather forecast.  We prepare our raincoats and umbrellas if the forecast is rain or we wear lighter clothing if the meteorologist says it’s going to be hot.

We insist demand forecasters revise their numbers and marketers influence customer preferences if we don’t like the sales predictions.  Executives believe the adage, “we don’t predict the future, we make it,” applies to demand forecasting. 

Forecasting is an activity that should as much as possible be based on science and hard data.  But it can never be fully accurate either for weather or for market demand. 

Yet, we treat each differently. 

We see meteorology as a science and though we may be frustrated by its sometimes inaccurate moments, we adapt to what the meteorologists forecast, even if the forecast is for the next 60 minutes than for the next day. 

We see demand forecasting as an approach to be performed with high accuracy and its predictions and outcomes consistent with enterprise goals, especially those pertaining to revenue.  We expect the organisation to change market behaviour and not the other way around.

Forecasting the weather is a science.  Forecasting demand is performance.  We accept and adapt to what the weather forecast is.  We insist that the demand forecast should always be correct and in step with our objectives. 

Forecasting is about predicting what the future will bring.  It can never be 100% right.  Yet, we expect differently depending on what we forecast.  This is because there are things we think we can influence and things we know we can’t. 

We can’t change what the weather will be like tomorrow but we can change what customers will prefer. 

The trouble is we sometimes bark at the wrong tree.  We try to influence the forecaster when we should be trying to influence the market. 

About Overtimers Anonymous

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

Why We Need to Define the Bigger Problem*

“Houston, We Have a Problem”

When Apollo 13 astronauts reported an explosion on their space module, NASA’s Houston Mission Control contemplated on continuing the mission and land on the moon.  It was only when NASA realized that the problems were life-threatening that it was decided to abort the mission and to have the astronauts return to Earth safely. 

We tend to define problems by its symptoms and how it affects our agenda.  NASA had an agenda to get Apollo 13 to the moon and at first stuck to that mission even with the reports of an explosion and the resulting problems. 

We apply this thinking in our daily lives. 

If we get sick, the first thing we look for is medicine to relieve pain and discomfort.  

If our car won’t start in the morning, we look under the hood to see if there is a quick fix.  If we can’t find any, we hail a taxi or find a ride via Uber or Grab so we won’t be late to wherever we’re going.  Car repair comes later when we have time or we delegate it to someone else to do the fixing. 

We try to solve problems with remedies and quick fixes that as much as possible won’t interfere with our agenda.  We almost all to often react to problems as obstacles that are to be removed or bypassed via the easiest means possible.

Hence, when it comes to problems, we all too often seek solutions as soon as possible.  

We classify problems as either big or small.  A small problem has an obvious and easy solution.  A big problem needs figuring out, planning, and allocation of resources. 

But sometimes a problem, whether big or small, is part of a bigger problem that may not be apparent. 

A bigger problem may be a root cause for the smaller problems or a flaw in a system that has yet to be detected.  It can also be an opportunity which is manifesting itself in a changing environment.

For example, a small online retail business that is experiencing steadily growing sales has hired more people to meet the growing demand.  The head count has grown to a point where preparing the payroll has become more time-consuming and complicated.  The business owners, in response, install a customized payroll system and train clerks to run it.  After a while, the business owners notice the overhead costs are going up so they engage an accountant to streamline the budgeting and charging of expenses.  Profits do grow but the accountant’s reports show rapid increases in the costs of rent, insurance, and electricity.  The business owners hire a consultant who recommends renegotiating the contracts for rent, finding another insurance provider, and buying a more efficient air-conditioning system that uses less electricity.

Finally, the business owners realize that their business is just getting too big to manage on their own so they form a partnership with an investor who infuses capital and hires professional executives.  The online business becomes a bigger company that grows tenfold in succeeding years

The online retail business company addressed problems as they came but wasn’t aware of the bigger problem until it became apparent.  The business was just getting too big to manage.  

Solving the bigger problem begins with a fuzzy situation.  The online retail business is getting too big.  That’s a fuzzy situation.  It spurs questions.  Why is it getting too big?  What makes us say it is getting too big?  How did it become too big? 

Answering the questions from the fuzzy situation provides information about the problem behind the fuzzy situation.  The information becomes the springboard to clarify what the problem is all about.  The online retail business is getting too big from the higher sales.  The organization has grown in head count.  Costs to accommodate the higher head count such as rent, insurance, and electricity have gone up.  The business has hired more people to manage the head count. 

From the information gathered, the business can then begin to define the problem.  Defining the problem does not necessarily mean identifying a cause or an issue.  One should avoid the pitfall of jumping to a conclusion such as, in the online business example, saying that the the business has become unproductive because of the higher head count.

Defining the problem requires asking in-depth questions.  How can we manage the business better in lieu of higher sales?  How might we become more productive?  In what ways can we reduce costs? 

The online retail business selected the first question:  how can we manage the business better in lieu of higher sales.  The owners chose this question as the one that defined the problem based on criteria.  That criteria come from the business owners’ mission, goals, and strategy.  The online business wanted to be a fast-growing company with high market share and revenue within five (5) years.  Hence, the owners chose the question “how can we manage the business better in lieu of higher sales” as their problem.

It doesn’t stop there.  The problem may be defined more sharply over more information and thought.  The problem may become “how might we increase sales without incurring higher costs?”  Or “how might we expand our product lines without having to hire more people?” 

It is when the owners settle on a specific question that they would have defined their problem. 

*originally published on February 8, 2019 on LinkedIn

About Overtimers Anonymous

What is a Supply Chain, Really?

The first time I heard about supply chains was when I was working as a production planner at P&G Philippines in 1989.  P&G’s top management had just reorganised the multinational consumer goods corporation’s operations worldwide, integrating manufacturing, purchasing, and logistics under one group: the Product Supply Organisation or PSO, for short. 

The aim of the PSO was to streamline the flow of materials and products from vendors to customers.  Executive leadership emphasised customer service, lower costs, and reductions in working capital, especially inventories. 

Top management at P&G Philippines pushed a comprehensive information technology project as the centrepiece to integrate the various functions, with focus on MRP 2, or Manufacturing Resource Planning, the precursor to Enterprise Resource Planning (ERP).

When P&G moved me to manage the shipping department at the company’s Tondo Plant in 1990, I arrived just in time for the implementation of the newly installed MRP-2 software.

It didn’t start well.

The software couldn’t keep up with the pace of orders coming in and the loading and dispatch of trucks.  The system would hang often or users from other departments weren’t updating inventories to allow us to pick items for shipping.  We ended up overriding the system which earned me the ire of the IT project leader.   Marketing brand managers and field sales came after my department as pending orders piled up and the General Manager even had me sat down in a whole day meeting to explain the snafus in the system.    

The shipping and IT department people worked nights, holidays, and weekends to get the system to work and ship orders.  We finally were able to deliver and the company saw its sales hit record highs. 

A lesson learned from the experience was this: 

Managing a supply chain doesn’t start with reorganisations or putting in a fancy computer system.  Managing a supply chain starts with establishing relationships between the people who’d be running it.  

The supply chain is a representation of operations and their relationships not only within the organisation of an enterprise but also with other organisations of other enterprises, especially the ones the enterprise does business with, such as customers, vendors, and 3rd party providers. 

A supply chain isn’t an organisation nor is it a system of operations.  It isn’t a flowing stream and it is not an ecosystem.  (Ecosystems are communities of biological organisms that eat each other). 

The supply chain is a model, a paradigm that shifts us from seeing work not as the jobs we do on our own at a work-station, cubicle, or vehicle, but as jobs that connect us with others in getting what we need, producing what are needed, moving to where they’re needed, and delivering to who needs them.    

A more-to-the-point definition for supply chains would be:  supply chains are operational relationships that make available products and services. 

Supply chain management is the management of those operational relationships

It’s not a system.  It’s not an organisation.  Supply chains are about relationships―relationships consisting of people working together to deliver products and services. 

About Overtimers Anonymous

Why Should We Care?

Silos

When we get a job in an enterprise, we generally assume it’s for work the company advertised and interviewed us for.   We would find it kind of funny if the company assigns us to do something we didn’t get hired for.   

But it happens.  We sometimes are given work that are not on our original job descriptions.   

Some organisations include “any additional jobs the company may assign” to the list of things to the position we are employed in, but we would push back if the “things” our bosses tell us to do are far from the kind of work we are supposed to be doing.  One does not assign advertising work to an accountant, for instance. 

But it happens.  Like a bookkeeper who the boss treats as a secretary.  Like a plumber who ends up repairing electrical circuits.  Or an engineer who doesn’t do any engineering work at all but becomes a supervisor of an assembly line. 

We also hesitate when an enterprise gives us work in another department or to a “sister company.”  In the Philippines, some firms set up “sister companies” or “subsidiaries” that are totally different legal entities but have almost identical ownership.  The owners would ask their best-performing personnel working in one enterprise to do jobs in another.  An accountant would end up bookkeeping for several different firms or a technician would find himself repairing machines at several different workplaces. Each would, however, be earning just one pay-check from just one company. 

And it does happen.  And often.  Especially in corporations that have diversified holdings in various enterprises. 

We of course want to do just the jobs we are hired and paid for.  “It’s not my job” and “I don’t care” have become favourite mantras in most workplaces.  But just as much as our peers avoid asking us to do things we’re not supposed to do, we find it difficult when our bosses tell us otherwise. 

Our bosses, however, also do get their share of extra work.  Their superiors as well as executives of other departments at times ask them to do things that’s not on the scope of the departments they run.  As much as they resent the additional assignments, many have a hard time saying no. 

And it happens again and again.  Despite what bosses have on their plates, superiors would pile on more.  And we employees get more work too as a result. 

So, we build walls.  What some so-called experts would call “silos.” 

Silos literally are those large towers we find mostly at farms.  They’re storehouses farmers typically put their bulk harvests in before sending them off to markets.  They are usually built with strong materials such as steel or cement.  Silos are designed to isolate stock they store from the outside world, to keep out pests, provide protection from the weather, and preserve freshness.    

Silos have become the best figures of speech for departments in an enterprise who don’t interact with other functions.  And they apply to individual enterprises as well. 

Many enterprises have a culture of looking more towards within than without.  The entrepreneurs that start them have a tendency focus a lot on the activities of their enterprises as they make the effort to boost sales and control costs.   Organisations are conditioned from day one to look inward.  How do we sustain cashflow?  How do we improve our products?  How many sales people do we need?  How much training is enough? 

They ask less about:  how did my customer do with my product?  Did he or she like it?  How has my vendor reacted to my purchase order?  Is she making the effort to ensure the best quality of the items we asked for? 

These latter questions don’t address the interests of our enterprises, so why ask?  Why should we care? 

We should care because the world is changing.  And supply chain management has become more applicable if not more essential in this changing world.    

It’s not only because of the pandemic.    

When the coronavirus (CoVID-19) pandemic hit in 2020, enterprises saw their supply lines fall apart.  Merchandise didn’t arrive or orders were cancelled.  Hospitals didn’t receive needed personal protective equipment (PPEs).  Ocean transport stalled, tying up containers at ports.  Factory production stopped; food deliveries were disrupted.  It was chaos. 

And it didn’t end there. 

Governments have lifted restrictions only to repeatedly put them back again as the virus returned in second, third, and even fourth waves.  Ocean-going vessels ran short of shipping containers for clients and the clients scrambled to build inventories as their customers rushed orders.  Factories stopped and started due to uneven deliveries of critical materials ranging from semiconductor chips, coffee beans, cotton, and chemicals. 

Some politicians trumpeted recovery but realities on the ground were that supply chains have buckled under the stress of whipped up demand and limited supply and capacities. 

Supply chains aren’t in a crisis because of the pandemic.  The pandemic just aggravated what has been holding back supply chains. 

Silos. 

Many businesses had built walls and had focused only on what’s happening within; they ended up at the mercy of outside forces.  They faltered from disruptions that became more frequent this past decade, culminating with the global coronavirus pandemic. 

The concept of the supply chain, since its introduction in the 1970’s, requires managers and executives to not only interact with each other’s functions but also relate with parties along the supply chains they link to.

A butcher must take into account the origin of the meat he procures. 

Chemical companies must assure the lasting efficacies of its products from deliveries to customer to succeeding tiers of trade to the final consumer. 

We cannot not care.  We need to realise we are participants in a supply chain that runs through enterprises, not just within enterprises.  The bottlenecks our vendors face whether it be in material shortages or traffic gridlocks are our business as well as theirs.  The effects of how our deliveries cascade down from buyers to consumers are for our best interests to know and even be involved.    

We should mind the business of others, as we no longer can mind our own alone. 

This is what supply chain management teaches us.  A supply chain’s greatest strength lies in its links, in the connections we make with others. 

It’s a hell of a change in mindset. 

The good news is that many if not most enterprises we compete with are still stuck in the mindset of silos. 

The bad news is that they’re getting the picture too and they will soon be change to become better themselves. 

About Overtimers Anonymous

The Path Towards Becoming a Supply Chain Expert Begins with Basic Competency

Sometimes identifying a problem is not in observing what’s going on; sometimes it’s noticing what’s not there.

In my blog, “Where are the Supply Chain Experts?”, written last March 2020, I wrote there were no supply chain experts seen working side by side with business and government leaders in solving supply issues at the height of the CoVID-19 pandemic. 

As media reported issues regarding shortages of medical supplies and consumer goods, we heard no real solutions to the problems.  And as government executives encountered obstacles deploying vaccines, there was no supply chain professional managing proper and efficient distribution. 

There may have been much talk about supply chain issues but there was little in the way of supply chain solutions coming from supply chain experts.

Not that there aren’t any supply chain experts.  There have been numerous podcasts, blogs, and testimonies on the subject but most if not all the supply chain professionals were really just broadcasting opinions.  There wasn’t much in the way of seeing them together with leaders or the leaders even mentioning any of them at all.* 

Simply put, despite the attention, nobody is putting weight in people with supply chain expertise.  Hardly any supply chain professional is in the limelight, even as the global CoVID-19 has brought on the most traumatic economic disruption in history.

There are several reasons which I believe why we don’t see supply chain experts taking the lead in solving major supply chain problems: 

Reason #1: Supply chain people are operations people and operations people are not expected to go out and interact with the outside world.   

The paradigm of operations people is to focus on what’s going within the workplace, that is, they focus inward.  Except to buy or deliver or hire a contractor, operations people don’t really interact with the outside world.

That essentially had been my upbringing in most of my supply chain jobs.  I concentrated on my department, my workplace, the processes within that were assigned to me.  Emphasis was always on what was going on within operations, not without.

Any interactions with the outside world were initiated mostly be people who were not in operations.  Operations people did not initiate such things and I don’t think many do so up to today.

In other words, operations people, especially supply chain professionals, are proactive in what happens within the four (4) walls of factories, warehouses, and offices.  We were not asked to improve the connections enterprises had with vendors, customers, and 3rd party providers.  Executives emphasised performance measures, not relationships.

Reason #2: There aren’t many supply chain experts in the first place. 

Many entrepreneurs are not supply chain professionals and many executives aren’t either.

That’s one reason maybe why we don’t see many chief supply chain officers.  There aren’t that many experienced supply chain managers in the first place. 

It’s not that the leaders don’t recognise the importance of supply chain management even to the extent of having it as an equal in the echelons of top management.  It’s just that there are very few managers with supply chain experience. 

When I say experience, I don’t just mean experience in logistics or manufacturing.  I mean experience as in synchronising operational functions and interacting with customers, vendors, and 3rd parties in procuring, transforming, and moving merchandise from sources to customers.  How many people do we know have this kind of expertise?  Chances are not a lot. 

Reason #3:  Supply Chain education is relatively new and not widespread. 

Many people aren’t schooled in supply chain management.  We can’t blame them for that; supply chain education is relatively new, as in it’s a course that only has been around for only 30 years or so, unlike finance and marketing which have been around for more than a century (longer perhaps).  And supply chain management as a concept and application is still evolving.

Coupled with that are the ones who teach supply chain management.  There aren’t that many supply chain teachers, at least one would call qualified to teach, one who has experience in various supply chain activities.  

Many supply chain courses teach specific subjects that tie in general operations management topics such as inventory management, production planning, transportation management, and operations research.  The trouble is many of these courses don’t tie in the topics together to teach how the supply chain functions as a whole.  They don’t offer the connectivity that illustrates how supply chain operations work together from end to end.

At the same time, supply chain education isn’t really uniform from place to place.  Some schools link supply chains more to logistics while others stress transportation and purchasing.  Some don’t even teach manufacturing’s connection to the supply chain, treating it separately even as it shouldn’t be.  There’s really no formally standard course for supply chains as one would see for law, engineering, or business administration. 

The people graduating from any supply chain management course from the 1990’s to the 2020’s aren’t therefore fully educated in supply chains.  They’re just graduates taught with a hodgepodge of individual courses related to the subject, which in itself isn’t the same from one school to the next, from one teacher to another. 

These make the diplomas and certificates some supply chain schools issue open to doubt.  A certificate or diploma in supply chain management thus testifies to a school’s brand of teaching, not necessarily one that is generally applicable in any industry. 

When it comes to bringing supply chain management to the forefront and developing it as a prominent field that addresses present-day issues via the three (3) aforementioned reasons, what should be done? 

I believe education should be the starting point and the very first step should be to establish basic competency among candidates for the field. 

I define basic competency in supply chain management as where one is familiar with operations, can at least see how to tie them in altogether towards overall optimal performance, and where one has the ability to plan, organise, direct, and control supply chains both in the day-to-day and strategic perspective. 

Basic competency would be the foundation.  Experiences afterward would be the building blocks that would develop the manager’s proficiency. 

Both the education in basic competency and the experience one gains should not be inward looking but focused on the relationships and connections between parties and links within and outside the enterprise. 

It would be a wholly new approach to some entering into the study of supply chains.  But I believe it would be worth it.  Many of the challenges we see in supply chains are precisely occurring in relationships and connections between functions and parties inside and outside enterprises. 

Where can we find the teachers or just even the mentors?  Because there are not many of them, many aspiring students would be left on their own to look for and put together the bits and pieces experiences would bring. 

But even as they may be few, there are those who can at least help new managers attain that basic competency.   I’d like to think I can be one of those teachers given the knowledge and insights I gained from close to 40 years’ experience in the field. 

*[President Joseph Biden of the United States led a “summit on semiconductor and supply chain resilience” in April 2021 in which the President discussed  with chief executive officers (CEOs) how to tackle supply issues particularly in semiconductor chips.  No prominent supply chain expert was seen stepping up to address the issue].     

About Overtimers Anonymous

Six (6) Reasons Why We Need to Learn How to Manage Supply Chains

Why do we need to learn how to manage supply chains?

The answer to the question may seem straightforward at first.   

We need to learn how to manage supply chains so that we can ensure the availability of products and services at the right quantity, right quality, at the time they’re needed, and at a cost that is within stakeholders’ expectations.

But it’s not really that straightforward. 

Supply Chain Management was the idea of Mr. Keith Oliver who sometime in the 1970’s, while working for consultancy firm, Booz Allen Hamilton, developed a vision to break down the functional silos within organisations and integrate operations toward the common purpose of meeting customer requirements. 

Keith Oliver proposed I2M or Integrated Inventory Management in a presentation to a steering committee at the multinational corporation, Philips, in the 1970’s.  But as Oliver struggled to define I2M as the “management of a chain of supply as though it were a single activity,” one of the Philips managers, Mr. Van t’Hoff, suggested Oliver to call it just that:  “total supply chain management.” 

Not many of us really remember Keith Oliver or Mr. Van t’Hoff that much these days but most of us know, or at least heard of, supply chains and supply chain management

Supply Chain Management is a subject that has gained much attention and interest since Messrs Oliver and Vant’Hoff uttered the term.  Just about every enterprise that sells a product recognises the importance of supply chains especially when it comes to deliveries and costs. 

I learned supply chain management mostly on my own, in which I was fortunate to experience different assignments representing various stages of supply chain operations.

I managed inbound receipts of raw materials in which I learned how to plan, schedule, store, and handle incoming receipts.  I learned to be careful in making sure there neither was too much inventory nor too little. 

I managed production operations in which I learned that management is mostly how one works with not only people who are on the factory floor but also with peers from other departments, like purchasing, shipping & transportation, engineering & maintenance, human resources (HR), finance & accounting, and research & development (R&D).

I managed outbound logistics in which I learned that customer service starts not with deliveries but with understanding what customers want. 

From these experiences, I’ve distilled six (6) reasons why we need to learn how to manage supply chains. 

  1. Supply chains are the life-blood of (just about) every enterprise

All enterprises that sell products and services rely on some sort of supply chain for the transformation and flow of resources and merchandise.  The operations that underlie them provide the revenues and dictate the costs which determine the wealth and health of enterprises. 

  • Supply chains go beyond the enterprise’s borders

Supply chains don’t describe what happens within enterprises.  They describe what happens between enterprises.  Managers who are adept about their operations are only at most half-way in managing supply chains.  The real good ones are those who can make the entire supply chain work favourably for their enterprise’s interests. 

  • They’re complicated

No two (2) supply chains are alike, whether one compares enterprises or the operations that run through them.  And every supply chain isn’t really just a single flow of stuff from one end to another.  They’re really interconnected links where items flow in and flow out at various points of every other enterprise’s operation; some of which are visible and some of which are sometimes not. 

  • They’re prone to adversity

Every chain has its weakest links and the more links they are, the more likely they are vulnerable to adversity.  Adversities come in all types of risks and degrees of disruption.  Some are natural; some are man-made.  And they are often unpredictable, which requires some special talent in mitigating, if not avoiding them. 

  • Supply chain success relies on the performance of people

Much emphasis has been made on managing resources when it comes to supply chains.  But supply chain success can only happen with how well people working in them perform.  A lot rides on the workers and operators at different points of the chain and that doesn’t discount stakeholders such as the vendors, customers, information technology professionals, engineers, technicians, executives, and supervisors. 

  • They’re changing

Supply chains are evolving.  And not necessarily uniformly.  Some have hardly changed, such as storage & handling at seaports.  Some have dramatically altered the landscape such as e-commerce portals displacing middlemen in the retail industry.  And not only are they evolving within industries.  Supply chains are coming into play in enterprises one would never think they’d be applicable.  These include business process outsourcing (e.g. call centres), labour contract agencies, insurance, and software development. 

Supply chain management was born from the “aha” moment of Messrs. Keith Oliver and Van t’Hoff.  While the names of both esteemed men have waned from our memories, their brainchild, supply chain management, has become a very popular subject of discussion at enterprises the world over. 

But popularity alone is not enough a reason for why we need to learn how to manage supply chains. 

Supply chain management has become more important as enterprises recognise that it is the manifestation of actual revenue and cost, that it goes beyond borders of businesses, that it addresses complexity and adversity, that people performance is key to success, and that it is changing, not necessarily smoothly but more often in fits and starts. 

I am lucky to have experienced working in various supply chain operations but what it gave me wasn’t credentials but rather, the insights in how supply chains deserve a high place in our management priorities. 

About Overtimers Anonymous