The Devil is in The Details

I was reading the San Jose Mercury News one morning while staying with my brother during a visit some years ago at San Mateo, California, USA and I noticed that the front page of the paper featured a repair of a road culvert. 

The culvert, a canal by the side of a main thoroughfare, was eroding and needed repair.  The news article talked about what the engineers assigned to the repair job were going to do and it included a schedule of when a lane of the road would be closed. 

It was fascinating that a big city newspaper like the San Jose Mercury News would put a story about a problematic road culvert as its main headline for the day, much bigger than other national and international news. 

I then thought, “Why not?”  Why not showcase what the local government is doing about roadwork and how it would affect those who live in or near San Jose City who in the first place probably make up the majority of readers and subscribers to the newspaper. 

And why not write in-depth about the roadwork so that people will know the details, such as what’s the roadwork timetable and how it may affect traffic in the area? 

The devil after all is in the details. 

The idiom, the devil is in the details, points out the need to take into account the nitty-gritties of a plan or solution.  It describes what happens when we find it harder than we thought to implement an idea or execute a strategy. 

Some enterprise executives decide on solutions without considering the ramifications.  They would say they did especially if a task force that recommended the solution studied a lot about it. But given the fact we live in a complex world, there would often be something left out, something that the executives and managers didn’t expect.

When the Coca-Cola Company attempted to reformulate their flagship soda in the 1985, many consumers complained and rebelled.  Coca-Cola had done a taste test study that showed consumer receptiveness to the new formula but they didn’t ask consumers whether they’d buy it.  The new formula was a failure and Coca-Cola revived the old formula by calling it “classic.” 

When a multinational food corporation changed the plastic lids of its margarine containers to a cheaper material, it didn’t foresee how fragile the lids would be on the production line.  Many lids broke during packing such that the productivity losses overrode the cost savings.  The product research group who tested the lids ignored workers’ comments about the breaking lids, and instead passed the problem to manufacturing management. 

What the devil is in the details teaches us is that for every initiative we start, we should pay attention to the nitty-gritties that would be involved. 

A lot of times it has to do with logistics; 

  • A purchaser would buy tons of a commodity to avail of a bulk discount but doesn’t realise there’s no more space in the warehouse;
  • A wholesaler offers discounts for customers who buy at least a million dollars of goods a month but it turns out there aren’t enough delivery trucks when orders come in on the last day of the month;
  • A manufacturing executive directs a production line to run on three shifts to build up inventories of finished product but finds out aren’t enough pallets to store the items at the warehouse;
  • A laboratory manager requisitions for state-of-the-art testing equipment but doesn’t stock up on the imported reagents needed for the testing procedure that comes with the new machine, which results in delays in releasing products for shipment. 

Details always start small but mushroom into big issues when they are not addressed.  Experienced executives don’t ignore details and embed themselves into the issues before they get out of hand.   They take control and put things in control. 

No one has demonstrated this more than Amancio Ortega, the founder of Inditex, the brand behind Zara, which has 1,854 stores in 96 countries.  Despite being a multi-billionaire and retired, Ortega “has never bothered with an office.”  He “prefers to sit on the floor of Zara’s women’s department.” His daughter, Ortega Perez, who has emerged as an active Zara executive, emulates her father’s hands-on management style.  Ms. Perez, just like her father, very much manages the details of the business.  

It’s easy to have ideas.  It’s another thing to make them come true. 

Because the devil is in the details. 

 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

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

Competitive & Non-Competitive Priorities and How to Deal with Them

In several firms I’ve worked with, I couldn’t help but notice that supply chain managers would sometimes be engrossed with priorities regarding compliance to government-mandated occupational safety & health standards.  They would have long meetings and spend much time on the nitty-gritties of reports to be filed and procedures to follow.

But in the following week, the same managers would switch to issues regarding costs that were going over budget.  The general manager of their company was concerned about expenses and wanted a meeting so the supply chain managers would be rushing to prepare their presentations to explain their respective functions’ spending. 

Priorities would shift week after week, month after month.  One day it would be safety, the next day it would be quality.  When managers would ask which priority is more important, their boss would reply: “all of them.” 

There are two (2) types of priorities enterprise executives deal with.  These are competitive priorities[i] and non-competitive priorities. 

Competitive priorities are those when addressed add value to the enterprise.  Examples are sales, cost, quality, delivery reliability, and after-sales service excellence.  As the term suggests, these priorities directly contribute to an enterprise’s competitive advantage. 

Non-competitive priorities are those that executives do not recognise as adding value to the organisation but are too important to ignore.  Examples are safety, security, industrial labour relations, community relations, government regulation compliance, environmental safeguards, and employee health.  These priorities may not contribute to an enterprise’s competitive advantage but are imperative to its ongoing operations. 

Enterprise executives see competitive priorities as vital to the organisation’s growth.  Consumer goods executives, for example, would develop marketing and product initiatives to bring about higher sales. 

Enterprise executives, on the other hand, see non-competitive priorities as crucial to the organisation’s survival.  Executives, for example, would stress industrial safety as a program to prevent injuries.  They would expect their organisations to adopt safety practices so that people don’t get hurt, and not lead to disruption in operations. 

To put it in another way:

  • Competitive priorities address opportunities.
  • Non-competitive priorities address adversities.

Classifying priorities in either category may help enterprise executives not only what to tackle first but also determine who should be leading the respective priorities. 

Quality and safety are everyone’s jobs but if there are no quality control or safety managers to lead priorities in either one, then it would probably be chaotic for the executives trying to handle them on top of the other important things they have to do. 

It also pays to have awareness of the two types of priorities to know how they would affect the enterprise.  Classifying community relations as a non-competitive priority, for instance, may prove worthwhile for an enterprise who has a factory situated within a largely populated city.  It would encourage executives to invest in a manager who would engage with the factory’s neighbours and handle issues that might result in mutual benefits. 

Being mindful of competitive and non-competitive priorities also gives the organisation a constant big picture of the work it’s doing.  Engineers building a new storage facility, for example, would best have an understanding of what they want to accomplish.  It wouldn’t just be about building for more capacity; it would also be about the impact on working capital, better distribution of products, reduction in damages, and safer working conditions.

Executives can sharpen their enterprise strategies with their awareness of both competitive and non-competitive priorities.  The trick is to have balance and brevity.  Some company mission statements tend to stress too much on quality and leave out the rest.  Other corporate philosophies overdo it with numerous paragraphs that overwhelm the organisation. 

We all have priorities.  We just need to understand which ones are competitive and non-competitive in which the former addresses opportunities while the other takes on adversities.  Both are too important to ignore so it would help if we classify the things we do as either competitive or non-competitive. 

If we can’t do things all at once, we may need to check our structure and resources.  We also should try to make sure our overall strategies aren’t complicated or overwhelming for our own organisations. 


[i] Davis, Mark M., Aquilano, Nicholas J., and Chase, Richard B., Fundamentals of Operations Management, 1999, Chapter 2, p. 25

About Overtimers Anonymous

The Three Capacity Types

How much can we make?

How much can we buy?

How much can we deliver?

These are typical questions executives ask their managers all the time.  Executives often want straightforward answers; they’d rather be spared the complicated assumptions behind any of them. 

Calculating capacities can be a headache.  It’s never really as straightforward as a machine’s rate of production or how many items a person makes in a day.  Operators sometimes slow machines down or speed them up.  A shorter person may not make as much as a taller person.  Raw materials from one vendor may lead to higher output than that from another supplier. 

How executives view an enterprise’s supply chain capacity is also often different from that of employees.  Executives usually prefer what’s the most that can be produced and delivered.  Employees typically equate capacity with how much they have delivered in reality. 

Answering the questions of capacity therefore requires knowing what assumptions to base on and what data and formulae to use. 

I usually propose three types of capacities for enterprises:

  1. Maximum Capacity
  2. Operating Capacity
  3. Demonstrated Capacity

Maximum capacity is how much an operation can make or deliver assuming it runs at its highest designed rate all the time, that is, 24 hours a day, seven days a week, 365 days a year (366 if it’s a leap year).  No breaks, no shutdowns. 

maximum capacity = design rate x 24 hours/day x 365 days/year

Note that it involves the highest designed rate, that is, what the operation is engineered to do.  The design rate isn’t what it can actually do but what it’s supposed to be capable of. 

Operating Capacity is how much an operation can make or deliver assuming it runs at its highest designed rate based on a schedule.  Operating capacity computations are based on planned timetables but regardless of downtimes.

operating capacity = design rate x scheduled operating time

Note that operating capacity uses the highest design rate and 100% of the scheduled time.  Operating capacity does not take into account planned or un-planned downtimes, such as break-times or time lost during an operation for whatever reason.  For example, in a production process that has a design rate of 100 pcs per minute and is scheduled to run eight hours a day but with allowed breaks totalling 1-1/2 hours, the operating capacity would be:

operating capacity = 100 pcs/minute x 8 hours/day x 60 minutes/hour = 48,000 pcs/ day

Operating capacity does not factor in the break-time.  It does not consider any slow-down from the design rate. 

Demonstrated Capacity is based on the actual output of an operation.  It is determined by multiplying the actual operating time with the actual operating rate

demonstrated capacity = actual operating time x actual operating rate

The actual operating rate is the regular rate of output or what an operator or supervisor establishes as the equipment’s or workplace’s attainable output of items.  The actual operating time is the total amount of time the operation was running after deducting planned and un-planned downtimes.  For a production process that has a design rate of 100 pcs per minute, but an actual output of 5,000 pcs per hour that has a schedule of one eight-hour shift a day with 1-1/2 hour breaks, the demonstrated capacity would be: 

demonstrated capacity = (8 – 1.5 hours) x 5,000 pcs/hr = 32,500 /day

Demonstrated capacity does not take into account the design rate or the total eight (8) hour scheduled shift.  It only considers the actual operating time and actual rate of output.  It does not, however, deduct any unacceptable output (e.g. scrap, rejects). 

The Three Types of Capacity

Executives, especially financial managers, prefer maximum capacity when it comes to assessing how well an enterprise is utilising its assets.  If an enterprise’s supply chain schedules an operation at one (1) shift a day, it would be utilising at most one-third of an operations assets’ capability, which reduces the potential return on investment for the assets.  For an enterprise’s owners, that would be tantamount as wasted opportunity. 

Supply chain managers favour operating capacities in measuring efficiencies.  Operating capacities would be the baselines to determine how reliable operations are. 

Many operators and supervisors like demonstrated capacities for performance measurement.  Some would see operating and maximum capacities as unreachable parameters.  They’d instead measure their output against what they can attain, which would be demonstrated capacities.    

When it comes to determining what the capacity of an operation is, one has to be aware of who’s asking and what is being looked for.  Is it how much an operation is capable of? (Maximum Capacity).  Is it how much can be achieved at full efficiency over a planned time frame?  (Operating Capacity).  Or is it how much can one realistically count on to attain? (Demonstrated Capacity).

Enterprise executives, managers, and engineers may have their own versions on capacities.  It should be based on what one is after.  An executive seeking the best return on investment would have a different perspective from an operator who wants to know how much can really be done. 

Capacities apply to every operation.  Variables such as design rates can be tricky to determine, especially if the design rate is to be determined from labourers or logistics.  Supply chain engineers can help provide the data. 

That’s what they’re there for. 

About Overtimers Anonymous