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

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

What Organising Really Means

There are four (4) basic functions to management:  planning, organising, directing, and controlling. 

We can picture what planning, directing, and controlling are.  They’re kind of straightforward and self-explanatory.  Organising, however, is not. 

When we “organise,” what’s the first thing that comes to mind?  We perhaps think of putting our stuff in order, like filing away papers and cleaning out the clutter.  Maybe we see organising as rearranging the tables of our subordinates, laying out the machinery, and scheduling who’ll work from home versus who’ll be at the office.  It can be that we think it is about making an organisational chart that shows the positions of people. 

Organising as a management function, however, is more than just all of the above. 

The dictionary defines organise as “cause to be structured or ordered or operating according to some principle or idea,” and “arrange by systematic planning and united effort.”  The key words are structure, order, and arrange and it is done for a principle or idea via systematic planning and united effort.

Organising is therefore not just making things neat.  It’s about making things ready for a specific purpose.  The “things” in this case are people, assets, resources, and products

Organising People

Managers organise people to do their jobs efficiently and effectively.  Organising is about employing and deploying the people crucial to making the enterprise’s goals into realities.  These include those we directly hire, i.e. employees, and those we engage with such as contractors and vendors. 

The tasks in organising people include team building, organisational development, training, defining job descriptions or scopes of work, and assignment of duties and responsibilities. 

Organising Assets

To get things done, managers need to have their assets in place and ready to be used.  These include having enough funds to pay for them and prepping them for operation. 

There have been many times I’ve seen managers order equipment and then realising they didn’t set aside enough money to pay the seller, causing delays in installation and start-ups.  

Organising assets includes tasks such as allocating cash in conjunction with budgets, setting up work stations, making and doing a checklist for preventive maintenance, calibrating gauges, running diagnostics, preparing storage space, and housekeeping.

Organising Resources

Resources are the materials, supplies, energy, water, and spare parts that we need to get things done.

Managers tend to underestimate the organisation of resources. 

Organising resources include preparing purchase orders, putting items in their proper place, checking that item codes are updated in the information system, informing security and receiving clerks what vendors are delivering the next day, clarifying policies such as first-in first-out retrieval, cycle counting of items to reconcile with inventory records, and regular quality inspections of critical components & parts. 

Organising Products

Similar to organising resources, we should make sure products are in their proper places, their codes complete in our computers, and delivery documents are arranged visibly for dispatch. Organising products also includes classifying each product’s inventory policy, marshalling finished goods for staging, categorising them by segment, group, family, and stock-keeping unit, and fixing the process descriptions and parameters of each. 

Organising products is no less important than organising people, assets, and resources.  In many cases, it should be the first to be done before the rest.

Organisation is not the same as organising.  The former is about structure; the latter is function.  Organising is work we may call mundane but necessary because the devil is in the details.  We can plan, direct, and control but if we don’t organise, that is, focus on things, make sure they’re in order, arranged, and ready for the strategies we will execute, then we’ll for sure run into trouble. 

Leaders rally people to a cause.  Managers organise people, assets, resources, and products to make real the goals of the cause.   

About Overtimers Anonymous