Doing More With Less
The pinnacle goal of every supply chain organization is achieving the state of an on demand lean operation. The system would work like clockwork smooth and efficient. Holding no slack in the system, waste would be an afterthought.
During the beginning of 2020, COVID-19 struck the globe shutting down factories and disrupting the economic hum. Factories opened again shortly, but most workers still stayed stuck at home. Online retail skyrocketed.
The Lean supply chain operated extremely well in good conditions, but little disruptions would throw the whole system out of whack. The COVID quarantine did just that. While lean systems are good, lean is based on the current model and doesn’t consider that the world is ever changing. This leaves the organization with no safety margin and a high-risk profile to disruption.
Corporations have always kept a close eye on operational efficiency. Recent history follows the lineage of Dr. Edward Deming’s 14-points for management. This evolved into the Toyota way, other offshoots consisted of Total Quality Management (TQM), and Six-Sigma. All of these programs focused on quality, efficiency, and the reduction of wasted effort.
Operationally, organizations focus on squeezing every nickel made and spent. Cutting costs is another methodology to creating more value from nothing. That results though in no slack and no excess.
Most of us that have held jobs can point to an occasion where someone left the office and instead of replacing the person, the organization decided to spread the work amongst a handful of people. Then years later, typically an over stressed employee complains that the job they are doing today used to be done by three people years ago.
Another common corporate approach is the application of best practices. These are all the industry insights that have been invented and then shared across the industry. For example, when interviewing candidates, you use the exact same questions which enables a more effective evaluation process. This practice was developed by one organization and then shared amongst others becoming a best practice.
As a collective, you are using other people to solve your problems. This has become a very effective means of continuously improving and staying current in the marketplace. You know what your customers want while fitting in with your peers.
The downfall of only stressing best practices is that in the end you will only be average. You become an amalgamation of everyone and lose your identity. Craftsmanship and autonomy are stripped away as only best practices can be applied.
Historically there were no major corporations, simply entrepreneurs. Monarchies and emperors moved the needle in controlling the economies of the world. In the 15th century the Medici started the foundation of modern banking the beginning of the corporations. This later transitioned to the industrial revolution and the rise of the corporation’s power.
Businesses were based on a simple concept of making a good product for the customer. This would satisfy the customer and lead them to repeat their business with you and to refer their friends to your business as well. The customer was king, and the business was the steward.
Business was always intended to make money. Maximizing profits has followed businesses since inception. This model performed a balance between what the customer can pay, and the cost the business can slash. With corporations shifting to public ownership on exchanges, priorities alter some. Corporate leadership shifts its stewardship from the customer to the shareholders to maximize profits. Thus, creating the imbalance in the customer-workforce-corporation equilateral triangle.
Let us revisit the natural attrition situation. Someone leaves the organization, and the decision is made not to replace them. Their role gets spread amongst a few people. Salaries aren’t increased but operational costs come down.
Eventually you will observe visible impacts where you take a hit on quality and quantity. Your products may offer less bells and whistles. However, the people making up for the person who left will naturally prioritize the key tasks and drop the rest or do the bare minimum with them.
Now the hidden cost is the burnout put on the people that stayed. Unfortunately, this will eventually lead to more attrition and job sharing or role blending. The secondary hidden cost is that the organization has now stripped away that small amount of available time. This is the period where insights are derived from having cognitive availability. The ability of the workforce to think and breathe. This is where process workers transform themselves into knowledge workers.
There are numerous corporate mantras on continuous improvement. Many hammer it home so much that everyone’s focus turns to gaining as many efficiencies as possible. This is a great cultural mindset for saving time and money to a certain extent.
However, customers do not pay for efficiencies, they typically feel the impacts of them. Instead, stress the approach of being effective over being efficient. Do the efficiencies you seek lead to more rework? Are you cutting down the time spent on something that doesn’t need to be done at all?
If you strive for efficiencies, understand what you are doing when you drop something or lean something out. Be methodical and strategic for there will be an impact. And the impact will have a hidden cost that will far outweigh the obvious one.
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