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Service Co - A Case Study
Thursday 24th May 2018
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The buying department was running up to 6 months behind.

They asked for help. But after several bizarre twists we showed they were buying the stuff they didn't need. Lots of it. Enough to force them into bankruptcy if purchasing ever did catch up!

Consultants are required to work in the best interests of the client, whether that's what the client thinks they want or not.

After a 'full and frank' discussion we - client and consultant - were able to solve the problems, and have good laugh about having misread the symptom.
The group survived, although it had to sell off one jewel to do so.

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We can speed up purchasing …

… that's not an issue. But something plain didn't feel right, and the more we dug the more it felt wrong.

A Mass Balance (comparing purchases to usage) showed only 1 item in 5 got used, but at that stage we couldn't figure why.

Details are client confidential, but the principles are universal.

  1. When it doesn't feel right, it probably isn't.
  2. There are usually 2 or more causes, probably in different functional silos. If there was only one cause, they would likely have found and fixed it themselves.
  3. It's a rare privilege to assemble a cross functional view of the whole chain. Task driven managers are too focused; they miss the big picture, and so the obvious. When they do focus mostly on measures, some part of them must challenge whether the measures are right.
  4. Those privileged few include:-
    • Consultants.
    • Outside CEOs and Directors in their first 100 or so days.
      (After that, they start to get buried.)
    • Foreign managers fluent in the language.

The group CEO, now a well known TV personality and business troubleshooter, loves to focus on management skills (and slag off management consultants. He's welcome; some deserve it.)

Great managers can and do implement better and faster. But if the tools are flawed - and in logistics a horrifying number are - that simply accelerates the damage.

This theme recurs. 'Don't fix the bodywork while the engine is broken'.


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