Appreciating the Value of Veteran Employees

When I was a young industrial engineer at the food production division of a multinational company, the accounting department asked me to find out why there was a large reported loss of refined coconut oil.

They’re the ones we always look for when we need something. 

I went to the production manager and he told me to ask Mang Ben.

In the Philippines, calling someone “Mang” is an address of respect usually to an elder.  Mang Ben in my case was a fifty-plus year old veteran who had worked at the multinational’s foods processing department for more than 25 years.  Mang Ben had more experience than everyone else and he would know why there is a reported loss in the coconut oil.  (It turned out to be due to an unsubmitted form that failed to get to accounting). 

Mang Ben could tell how many weeks supply an oil storage tank has just by looking at a gauge and he knew how to “cook” the fats and oils that the multinational produced every day. He could unload a barge of coconut oil all by himself and even called shipping operators to schedule when the barges should arrive such that they’d be timed with the incoming tides.  

I’ve met many workers like Mang Ben in the enterprises I later engaged with.

  • There’s the veteran machine operator who worked for a printing press company.  He knew how to quickly troubleshoot critical equipment and was the one the owners went to if they wanted to know if deadlines could be met; 
  • There’s the storeroom clerk who knew where every spare part of every equipment of the enterprise.  Even if there would be hundreds of items, he’d know where they were kept.  He also had a box of index cards which he used to track the inventory of the items, from when and how many arrived from which vendors to when and how many were given out and to whom; 
  • There was the 30-year-old young lady who was the right-hand assistant of an owner of a trading enterprise which delivered to independent convenience stores.  She knew every inch of the warehouse she was in charge of and knew every step in the trader’s logistics operations, from order to delivery.  She would push people to deliver rush orders and knew the ins and outs of the trading enterprise’s accounting system;
  • There’s the purchasing clerk who was familiar with every vendor of the multinational company she worked for.  From the ones who delivered the expensive chemicals down to the office supplies, she knew who offered the best deals.  She was the go-to person when any of the enterprise’s managers needed something to be bought fast. 

Some executives in the past have cited operations managers’ dependency on people like Mang Ben as a sign of weakness in the system.  Relying on one person for so much may entail risk especially if that employee suddenly becomes absent or leaves the enterprise. 

On the other hand, having a very able veteran brings about opportunities.  Veteran employees like Mang Ben bring a wealth of experience that manuals or consultants can’t equal.  A manual does not quite teach how much to turn a valve in real life to get to just the right cooking temperature as well as how Mang Ben would show it in person.    

Veterans also are likely to know what improvements would be most helpful for an enterprise.  Many veteran labourers at warehouses had given me insights on how storage racks should be laid out and what kind of material handling equipment would help. I was surprised, for example, when the labourers at a toy importer said they’d settle for well-built ladders to climb than expensive forklifts to retrieve bulky boxes from the tallest rack shelves. 

And when it comes to big changes such as building a new warehouse or installing new technology, it also helps to have veterans participate.  Veterans know the products and services of an enterprise very well, if not more so than the owners themselves.  Whenever there is an introduction of something new like a new improved machine or new storage facilities, the veterans would likely have valuable input on what to watch out for especially on quality, efficiency, and service. 

Veterans would know how high a truck dock should be or where in a factory the floor would be strongest to place a new machine.  An architect or civil engineer may offer all the standards but a veteran would know via experience what and where would contribute best for something new. 

Many enterprises have veterans like Mang Ben, employees who have loyally stayed long with the business and know more about the operations than just about anyone else.  Veterans are not signs of weaknesses but people who offer opportunities for educating new employees and to consult with for improvements, whether minor or major. 

We should be grateful for the veterans in our workplace.  They contribute more than what we can appreciate them for. 

About Overtimers Anonymous

The Importance of Making Available What We Promise

I ordered a box of latex gloves from a 3rd party seller on a popular e-commerce website.  The seller confirmed my order by email and after 24 hours, the order status on the website was that the box of gloves was being prepared for shipment.  One week later, the order status said it was at a “logistics facility.”  Two weeks later, the order status was the item was out of stock, the seller will be unable to ship, and my order was cancelled. 

I ordered a box of the very same brand of latex gloves from another seller and I received it within three (3) days.  I was annoyed I wasted two weeks waiting for the first one that never came.    

Shouldn’t sellers check first if they have stocks physically available on hand before they confirm a customer’s order?  Is it not common sense not to sell something one doesn’t have on hand?

Sounds like yes but in the real world, no.  Many enterprises sell items even if they don’t have them on stock.  They count on their operations teams to either produce or procure the items and have them available as promised by the time customer wants them. 

Available-to-promise (ATP) is an inherent element in supply chain management.  It is how much of an item an enterprise will have on inventory for customers to buy, adding in what supply is arriving and deducting what’s already reserved for other customers.

ATP = On Hand + Arriving Supply – Reserved for Pending Orders

Enterprise owners count on the ATP to communicate to customers as to how much and when items would be on stock for selling.  

For items that are make-to-stock, enterprises typically make sure they always have enough items on hand at any time for customers to buy.  Supply chain managers would set safety stocks to buffer for unexpected demand.

If, however, enterprises are selling expensive stuff like precious metals, are in the business of shipping thousands of items like automotive parts, or are marketing products with short shelf lives, managers would not keep too much on hand to avoid tying up capital in inventory.  Managers wouldn’t keep any safety stock and would rely on scheduled arrivals when committing ATP to customers. 

Customers expect enterprises to deliver their items on-time and complete as promised.  How well an enterprise keeps its promises is a criterion for success.     ATP is therefore important. It’s one thing both the customer and enterprise care about.  Delivering as promised ranks right up there with quality, cost, and service. 

Supply chain executives should strive for the following when it comes to planning ATP:

Never Zero, At Least Not Often

No one likes to be told an item is out of stock.  Mothers don’t like it when their favourite brand of diapers for their babies are not on the drugstore’s shelf.  They would buy another brand if they come back in a week and there’s still no stock. 

Short Lead Times

Customers will cancel their orders if a shop says the items they want won’t be ready for several days.  We humans have thresholds when it comes to patience.  We won’t wait too long.  Enterprises who can quickly churn products for customers gain competitive advantage. 

It Doesn’t Change at the Last Minute

Nothing is worse than breaking a promise.  Few things are as frustrating as when a shop tells us that there will be a delay in the item that was supposed to be delivered today.  It feels even more frustrating if we had already paid for the item.  Frustrated customers won’t be comforted with apologies or refunds.   Customer satisfaction comes when deliveries happen, not when they don’t. 

One Person in Charge

There should only be one person in charge of ATP.  Not the planner.  Not the logistics officer.  Nor the plant manager.  Not anyone else but the supply chain executive, the one who oversees all the operations for the fulfilment of customer orders. 

That means the delivery of items to the customers’ doorsteps, the making of the items, the marshalling of resources to make and deliver the items, and the shipping of the items.  In short, the enterprise’s supply chain. 

Enterprises, therefore, should have a chief supply chain officer who’d be in charge of making available what is promised.  

Having two or more persons handle supply chain operations or delegating the accountability of ATP to middle managers are common mistakes that lead to items that won’t be there as committed.  Having more than one person in charge of the fulfilment of customer demand just makes no sense. 

It’s like a kitchen with two chefs:  one is in charge of buying the ingredients, the other oversees the cooking.   Both men would be fighting each other in no time.  As the saying goes, “too many chefs spoil the soup.”

Keep It Simple

The more complicated an enterprise’s operations, the harder it is to keep promises. 

Thousands of items, multiple steps, shared production lines, and conflicting policies & targets are examples in which management becomes muddled as items weave through supply chain operations to get to customers. 

The advice is to keep it simple and use common sense.  Schedule milestones operation by operation to know how much can be committed at the end of the supply chain.  Deliver with smaller trucks or send single items through couriers.  Keep few stocks but set automatic re-order points for items that don’t move as much (e.g. spare parts).  Don’t keep stock of items that are make-to-order (e.g. tailored clothes). 

Nothing Wrong with Being Conservative

There’s nothing wrong with applying an allowance to an ATP.  If the schedule says an item will be ready in four (4) weeks, commit to five (5) when the customer asks.  Adding an extra week would allow for unforeseen events such as if a supplier falls short in delivering needed materials. 

No farmer can surely know how many fruits he will pick today. A fisherman wouldn’t know exactly how many fish he will catch tomorrow.  But experience will allow either to provide safe estimates.  The same is true for ATP.  We never really know exactly how much items will be available but we’d be more confident with conservative numbers, just as long as it doesn’t lead to over-padding or over-commitment. 

Enterprises and customers put a lot of weight in what is available to promise.  Customers rely on enterprises keeping their word.  Enterprises depend on their operations to have items ready when needed.

Enterprises should avoid promising nothing to make available and when they do, shouldn’t make last-minute changes.  There should be only person in charge and he or she should be the one who oversees the operations in making ATPs realities.  Planning ATPs should be as simple as possible and can be made with some conservatism.  We should not over-commit or pad too much. 

We make promises we can keep.  People value us for how we act based on our words.  It becomes not only a mark for success but also a way forward to mutually beneficial relationships.  

About Overtimers Anonymous

Paying Attention versus Getting Attention

A columnist at a leading daily newspaper writes every week about ghosts, spirits, reincarnation, or in other words, supernatural stuff.  He is obviously popular as he’s been writing for the newspaper for decades.  He seems to be doing well as he’s consulted for some people and spoke at gatherings. 

I laugh at how people can believe the silly stuff this columnist writes about until I remind myself that I also have advised clients and spoke at gatherings in which I try to get people to believe everything I say. 

Am I really any different from the columnist who preaches unbelievable content?  I offer insights but they can be hard to digest especially if they entail big changes in mindsets. 

The columnist writes to get attention.  Apparently, so do I.  Many of us seek attention in our efforts to gain influence.  We advertise.  We preach.  We SHOUT. 

More so when it comes to management and staff.  Managers seeking attention talk a lot and remind their subordinates a lot.  I know because I do it a lot as a manager and I’m still working on getting to do it less. 

Sometimes and more often than not, it’s better to pay attention than get attention. 

As treasurer for several commercial buildings, I monitor the spending of property management companies the associations of these buildings hire.  In some cases, the property managers spend too much or they spend too little.  This causes budget overruns leading to running out of cash or under-runs in which a building hoards too much money that otherwise should have been spent for better services and infrastructure. 

When I sit down with a property manager to tell her how she should plan her spending, I’d often go into a long-winded speech about how she should have a vision for the building and how she should plan and present projects. 

Naturally, after several minutes, she’d be silent with a glassy stare.  And I know by then:

  1. She’s no longer listening;
  2. I’m talking too much. 

When I, however, ask questions about the challenges of her job, she starts talking.  As long as I keep asking, she keeps talking. 

And as she talks and I listen to what she’s saying, I realise she’s coming from a wholly different point of view than mine.  She’d start by saying that the property company she works demands numerous reports—reports that require considerable time to write and submit. 

The building manager also mentions that her superiors have pushed a roll-out of ISO (international standards for quality & compliance) in all their client projects and that she has deadlines to meet those standards. 

And so on and so forth the building manager would go about the training she has to go through, the meetings she has to attend at her company offices, the complaints of building tenants she has to address, etcetera, etcetera. 

At a point, it would take an effort for me not look at my watch, not put on a glassy stare, and not to pretend to listen.  Because from the effort to ask and the effort to listen, I get to learn what it’s like for the building manager.  And from learning what it’s like, I get to understand the backgrounds and rationale for how the building is managed. 

And as the building manager opens up, she opens up too to what I not only ask but also suggest.  Eventually, we come to a point where we both agree to ideas on how to better manage the building. 

By the way, this really happened.  In that building where I did ask and develop a rapport with the manager, both cashflow and spending for critical maintenance projects doubled in one year.  There were improvements in sewage, elevators, and air-conditioning equipment.  Collections of dues gained in efficiency and the manager was still able to comply with her company’s directives. 

Asking is a technique I’ve come to appreciate to have fruitful conversations and obtain tangible results.  Asking is a key component of listening, of what many in the human resources field are promoting as empathy. 

Taking away the buzzwords and hype, I’d just say asking works.  When we ask questions and listen to the answers, it starts a conversation.  As long as we don’t try cutting the other off, let the other talk, and digest what the other party is saying, we gain insights for ourselves which we can build on to suggest to the other side’s point of view.  Because when we work from another person’s point of view, the person seems to understand better what we’re talking about; they would welcome it more than if we were communicating from our own. 

We have a habit of trying to get attention to the things we want to say and preach.  It’s what we see what people do every day in the media and in our everyday lives.  We end up doing it too in our attempt to expand our turfs and gain influence. 

I’ve learned, however, that paying attention works better.  It’s done by asking, listening, and asking again, until rapport is built and ideas flow.  And by experience, when ideas flow, doable solutions to problems follow.  And I’ve seen the real-life benefits.  

Ask, listen, repeat.  It works. 

About Overtimers Anonymous

Behold The PSI: A Basic Tool for Supply Chain Planning

The PSI or Production-Sales-Inventory is a basic spreadsheet template for supply chain planners. 

It looks like this:

The PSI has three sections:  production, sales, and inventories. 

Production represents the in-flow of an item or what’s going into inventory.  A basic example is finished goods input coming from a manufacturing operation’s output.  We can also call it supply. 

Sales is the out-flow of an item or what’s going out from inventory.  An example is a shipment to a customer.  We can also call it demand. 

Inventory is the stock of an item on-hand in storage, such as how much of an item is in a warehouse. 

The PSI makes visible production, shipments, and inventories over a range of time periods or what we can call time-buckets.  It’s an outlook for planning.  It’s up to the planner if he or she wants to use weeks, months, or even days for the time buckets.  It’s also up to the planner how many time buckets to plan for.  It doesn’t have to be just three as in the figure below.  It can be any number.  Some enterprises use six (6) buckets for a 6-month outlook; others go up to 12.  It is the planner and his superiors that decide what periods to cover (e.g., weeks, months) and how many. 

The PSI’s horizontal rows list the items or products.  Each row shows the production, shipments, and inventory outlook for each item via the quantities in the respective columns or time buckets. 

An item can be a product, material, or a supply or spare part. It is recommended to select an enterprise’s most important items to the PSI.  By very important, that would mean those that executives often keep an eye on. 

Working the PSI starts with a beginning inventory at the zero (ø) column of the inventory section. 

The planner’s basic aim is to track the inventories from one time-bucket to the next.  In the figure below, the planner notes that inventories at the end of week 1 becomes fewer as a result of sales in the same week. 

When the planner, however, inputs the production and sales of week 2, the inventories end with zero (ø) on week 2. 

To put what I just said in a formula:

and to put it to represent every time bucket:

where x is the time-bucket number.

The aim of the supply chain planner is to ensure there will always be available inventory for sales.  Hence, supply chain planners typically prefer there’d be extra stock at every time bucket.  

Supply chain planners typically set inventory targets for every time-bucket in line with their superiors’ policies and strategies.  Sales for each time-bucket usually are based on forecasts and customer orders. From the inventory targets, the planner computes the production or sales needed and still have enough left to meet inventory targets.

Planners focus on either how much to sell or how much to produce to meet inventory targets. 

If it’s production, planners would adapt the ending-inventory formula and make it look like this:

For a desired ending inventory of five (5) units of items A and B, the planner would set production numbers that would match sales but leave at least five units at every ensuing time-bucket. 

When the enterprise wants to plan how much of an item to sell given inventory targets and ongoing production, the supply chain planners would adopt the following formula: 

Which in the PSI would look like this:

…which looks just like the PSI for production.  😀

The PSI in the above diagrams show the same numbers but illustrates a different approach.  The planner either figures out how much to produce or calculates how much to sell for the ultimate purpose of having enough inventories at every time-bucket. 

An enterprise can tailor a PSI for its particular business. 

For an enterprise that buys finished goods and directly sells to customers, for instance, a planner can adapt a PSI from a production-sales-inventory template to one that is purchases-deliveries-inventory:

An enterprise that imports items and converts them to finished goods, a PSI may look like the one below. 

I found this especially useful in a metals manufacturer that was importing metal coils that then were then cut up and converted into steel sheets, plates, tubes and pipes.  As steel coils were the key components of the manufacturer with its weight in metric tons as the standard of measure, the PSI enabled the manufacturer’s managers to plan the quantities and timing of importing and converting expensive metals without having too much on floor for too long. 

When enterprises use a common measure from key materials to finished product, the supply chain planner could expand the PSI to a 4-column spreadsheet consisting of purchases-production-sales-inventories:

A 4-column PSI would be particularly effective for enterprises with few but predominantly high-volume products such as those in commodities.  And it opens up participation of practically the four (4) core disciplines of the supply chain:  purchasing, production, logistics, and planning. 

The PSI doesn’t require sophisticated software or hardware.  One can use an ordinary spreadsheet program (e.g. Excel) or even do it by hand with or without a calculator (or abacus). 

The PSI gives visibility to an enterprise’s supply and demand picture from present to future for key items, whether finished goods, materials, or parts. 

The PSI’s limit is that the more items an enterprise has, the more tedious it becomes to plan and track.  ERP systems coupled with up-and-coming artificial intelligence (AI) software can make up for that.  Many enterprises, however, rely on planners to plan the items they carry.   

Even with its simplicity and features, it’s hard to find an enterprise that actually uses a PSI.  Many planners tend to devise their own templates, using spreadsheets mainly, despite the availability of integrated planning tools provided by expensive software. 

Most of the planning spreadsheets I’ve seen are hard to understand or are very specialised.  When I present the PSI template to planners, however, I’ve gotten very positive feedback with executives welcoming its application. 

A PSI is a basic manifestation of what a supply chain planner does, which is to plan production or estimate the demand needed with a minimum amount of stock at every time period.  It is a basic tool for supply chain planners.  It’s simple to set up and provides a comprehensive canvas of what an enterprise’s supply and demand would look like in the present and future.  It has its limitations in the complexity of an enterprise’s items and operations. But at the very least, it provides a foundation for planners to manage inventories and optimise supply chain productivity. 

About Overtimers Anonymous

How NOT to Manage a Crisis

https://www.google.com/url?sa=i&url=https%3A%2F%2Fwww.philstar.com%2Fnation%2F2020%2F02%2F03%2F1990083%2Fanonas-katipunan-and-santolan-lrt-2-stations-be-repaired-end-june-2020&psig=AOvVaw2TLf-WxdyNO0dgxbRbfR-9&ust=1583878713388000&source=images&cd=vfe&ved=0CAIQjRxqFwoTCPjr2ce2jugCFQAAAAAdAAAAABAD

My manager apologized for coming in late for the meeting.  She came from her home at Marikina but got stuck in traffic because she couldn’t use the LRT-2 commuter train.  The LRT-2 station nearest to her home has been closed since October when two (2) rectifier transformers tripped and caused a fire.  (https://www.linkedin.com/pulse/four-4-starting-points-getting-reliability-you-want-ellery-samuel-lim/)

The Light Rail Transit Authority (LRTA) proudly testified in a congressional hearing that the Marikina station and two others would reopen in June 2020, about a week ahead of schedule (https://newsinfo.inquirer.net/1233945/shuttered-lrt-2-stations-to-reopen-by-june).  They assured the Philippine Congress that the bidding to purchase the replacement transformers has finished and they just needed to hire a full-time consultant specialist.  The LRTA notified Congress, however, that trains may run below par at the onset. 

The closing of three (3) LRT train stations constituted a crisis for commuters. But after more than four (4) months, there is yet no purchase order for the transformers.  Worse, the LRTA warned that trains may run at limited speed and schedule when the stations reopen. 

This is a good example of how NOT to manage a crisis. 

No sense of urgency.  The LRTA proudly declares they’re done with the bidding after FOUR months.  How long does it take to find the best vendor to buy the transformers from especially in a time of crisis?  Maybe four (4) weeks, but not four (4) months!

No competent person to handle the technical ramifications.  Saying that a full-time consultant specialist is needed for the installation of new transformers implies that the LRT-2 has no qualified technical people to begin with. How can a commuter railway system survive without technically competent people to oversee operations?  How does one select a vendor without technically competent people evaluating the bids?

And how does one assure operational reliability for the long-term? 

With no permanently assigned and qualified technical people and with a management approach that shows no rush to restore service, the LRT-2 commuter train is destined to be unreliable, unproductive, and expensive, all of which commuters and taxpayers would end up shouldering the burdens.