Complex, convoluted and business critical, managing your supply chain successfully is no mean feat. We wanted to give you an inside look at one of our supply chain expert’s real-life supply chain disaster that occurred while he was the director, and how he was able to handle the situation.
I was woken at about 1am by my nightshift manager and told I needed to get into work as sh** was about to hit the fan – big time! After gaining the essence of the problem, I threw on some clothes and leapt into the car. Twenty minutes later I was at my desk in the factory with three of my most senior nightshift people in front of me – I’ve never seen expressions like it except maybe in some old documentaries about war or natural disasters. They knew! They knew there was no way out of this and somebody was going to get shot – quite possible literally.
I probably shouldn’t say what we made, to protect the guilty, but we made cars. Cars – lots of parts and we made a lot of them, all the time. The problem that was so significant was that we were short one of these parts – a big hunk of metal called a bodyside. It’s what it sounds like, the side of a car– quite hard to build a car without one! We’d had this kind of problem before with different, less significant parts and with a combination of ingenuity, tenacity, rejigging the schedule, and luck, we’d managed to stop the sh** and the fan coming together… but this was different. We were on the verge of building the last of our Model A and as soon as we had, we would kick in with new Model B – the culmination of about three years of meticulous planning and effort by literally thousands of people. We had about eight hours before we stopped the plant.
We didn’t have any more of the bodysides on the way, as we had supposedly checked our stock many times and confirmed, many times that we had sufficient to match the runout volume with a handful to spare to allow for any unforeseen production problems or scrap. The die set for making the bodyside had been reconfigured to do the Model B variant – this was the plan – make enough up front and then save millions by not buying a new die set. Great plan but because somebody in my team had screwed something up, we or rather me was screwed. My mind was racing as to who had messed up? I knew this could be done later and the first step was to find a solution which judging by the expressions and opinions of my nightshift team was to take the ancient Samurai way!
I won’t explain the next 8 hours except to say, if anybody working in supply chain or procurement feels that networking and building good relationships is not important, then get in touch. About 3 hours later, many hundreds of these bodysides were being loaded onto trucks from our sister plant in Romania, on their way to the local airport. I had chartered an Antonov to do several flights. An Antonov is the biggest, most expensive cargo plane in the world.
This cost a significant six figure sum but weighed up against the unbuildable orders which would have been lost revenues in the significant eight figure range and lost profits of seven figures – it was the right call. The day was long but we coordinated our Antonov deliveries successfully and the parts arrived in time. We completed every Model A and launched the new Model B on time; I think I was even congratulated by my boss which is bizarre as my team had been responsible for several hundred thousand bucks’ worth of unnecessary expenditure, which would’ve been avoided if we’d only all done our jobs right!
So, who did I sack? This still niggles me today! Nobody! The post mortem was extensive and there were many changes made to our processes and operations but if I show this as, what I now recognise as a primitive version of Eli Goldratt’s Theory of Constraints’ Thinking Process, we get this story. By the way, we’ll have a new course exploring this powerful thinking process in early 2021.
I’m not here to tell you how to read this but think of it as the 5-Why process on steroids! Nearly all roads lead to poor communication, inadequate training and poor management disciplines. There were many other failings not shown here but I think you get the idea.
The upshot was if I was going to fire someone, I would have to fire my inventory controller, my Inventory Manager, about 4 warehouse operators and their supervisors over 3 shifts and of course their shift manager, my material planning manager and her team, probably about 6 personnel from the Press shop where the bodysides were made, mislabelled or not labelled. There were so many failings across the plant and all were avoidable if I had had the vision to do some proper risk assessments and really buy into the mundane aspects of management that are encompassed perfectly by the final stage of Six Sigma DMAIC process – CONTROL – the audits, the standardized processes, the complete buy in and understanding of 5S – it’s not about cleaning; it’s about creating an environment where problems jump up and hit you in the face. CONTROL is management speak for policing your processes, people and philosophies and it’s boring as hell but so necessary.
It’s reflections like my Antonov “adventure”, which now bring a smile to my face but at the time was the most horrendous time, that drives home the necessity in Supply Chain to use hindsight and turn it into foresight. I glossed over risk assessments earlier but I’ve shown you a glimpse of a Current Reality Tree from The Theory of Constraints but tools like Failure Mode and Effects Analysis (FMEA) is a fantastic tool for analysing any process and seeing what can go wrong, before it does. Incidentally, this topic is covered in a new course due at the end of 2020 and will be followed up by series of courses to get you up and running with that Six Sigma mindset. Of course, a lot of these tools, techniques, topics – Theory of Constraints (TOC), Value Stream Mapping (VSM), Six Sigma and FMEA are vulnerable to the fashions and fads of your industry, your company, your leader but fashion does not detract from the usefulness to a business – after all, my flared jeans from 1979 still keep my legs warm and protect my modesty!