How to win a game of Whack-a-Mole in your Supply Chain

Challenge

In most organizations, when an issue occurs, they are satisfied to put out the proverbial fire, until the next time. If you have ever played whack-a-mole at the fair, it is like that. Every time the mole pops their head up, you whack it with the hammer, but you never know which hole it will pop its head through next.

Merely putting out the fire or whacking the mole is a Level 1 Fix. It is not very effective because you are only dealing with the symptom, not the root cause. It is like if you are continually having headaches, and just taking pain killers to make yourself feel better today, but not going to see your doctor to find out what is causing the headache.

Solution

The solution is to move beyond the Level 1 fix.

A Level 2 fix is a much more effective approach because you are now drilling down to root cause. The focus is on the process. This approach assumes that the process failed; we are not simply blaming a person for what happened. Studies have shown that over 90% of mistakes in organizations are due to process design which are generally owned by management, but there is a tendency to want to find a scapegoat to blame.

This is a much better approach, but we can go one step further.

A Level 3 fix asks how the faulty process was allowed to operate in the first place. After all, I assume that most organizations do not intentionally allow faulty processes to operate. We might also assume that if there is one faulty process there could be many more, so if we understand how one process slipped through the cracks, we could prevent many faulty processes. This is what is known as a System Level fix. Actions that are taken at this level will have the most leverage and have the largest impact on supply chain performance.

Results

Here is an example that I encountered at an organization that was effectively addressed.

In this case, the problem was related to containers shipping from Asia to customers in the US. There had been two instances where the same order had been delivered twice by mistake causing much embarrassment and confusion.

A Level 1 fix would have been to simply send your carrier to retrieve the 2 duplicate containers, apologize to for the confusion and maybe offer a discount for the next order. In addition, the logistics coordinator would be reprimanded for allowing this to happen and be placed on a performance improvement plan. However, I encouraged the organization to dig further, and they found that the logistics coordinator was relying upon Proof of Deliveries sent via email from the carrier. It seems that he had missed a couple of emails, which caused the duplicate deliveries.

Which process in broken? In this case, it is clear that the shipment tracking process is broken and too error prone. One way to clarify if it is a process issue is to ask if the person was changed would we expect a different outcome. Since this process relies upon a person sifting through a stack of emails to prevent the problem recurring, I would say it could happen regardless of who has the job.

Therefore, we implemented a level 2 fix to insist that the carrier provide a daily tracking report automatically sent every morning to see status of all in-transit shipments, which would virtually eliminate the opportunity to miss deliveries.

We then asked the Logistics Coordinator how he missed the 2 emails, and he points to the fact that Sales Operations Coordinator had been allowed to take a 4-week vacation, and her boss had failed to adequately train a backup, so the logistics coordinator was overwhelmed by emails from the sales team looking for information about shipments.

In this case, the systemic Level 3 fix here was to address the vacation approval and communication policy, so that extended vacations of critical personnel must be approved by all stakeholder managers. By the way, it is typical that a Level 3 fix is the change of a management policy. Also, as expected of a level 3 fix, it would not only just address the shipment tracking issue, but it would also address all issues related to the lack of cross functional preparation for extended absences of critical personnel.

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