I’ve been working with companies on logistics and supply chain issues for almost 15 years. I’ve consistently noticed one thing: it’s the very rare manger or executive who believes his function or organization is performing poorly.
Now maybe I’ve been fortunate or lucky enough to have only worked with dozens of the best performing operations, but it would seem the odds are against it. Which, of course, brings to mind the old axiom; 50% of all doctors finished in the bottom half of their class, a fact that becomes blatantly obvious to anyone with significant exposure to the medical system.
So, 50% of all of our operations are also performing below the mid-point – but how many of us know it, or are willing to admit it? In my experience, it’s a very small minority.
I’m also reminded of an observation that someone from the Herbert W. Davis Co. (now Establish Inc.) made to me a few years ago. The firm runs a logistics benchmarking service, the results of which are reported each year at the CLM/CSCMP Conference. The results are useful, but I was told there is some bias in the data toward better performing companies. Why? I was told, the companies that rank poorly, compared to others one year, tend to not come back to enter their data the next.
This is what I typically hear. The company believes it is either never the top in a particular performance category or that it’s “maybe not the best performing, but certainly above average.” In other words, almost everyone gives themselves at least a “B.”
The one exception tends to be when a new manager or executive first comes on board. This is quite rational, of course, as the poor performance can be blamed on the problems of the predecessor, and cited as the reason to drive investment, process and organizational change. This, of course, brings up the real problem: identifying performance which lags the competition or other benchmarks is often not, shall we say, a propitious career move. Yet, as Winston Churchill once said, “Facts are stubborn things.” Those in the bottom half on belong in the bottom half, whether they want to recognize it, or not. Believing otherwise, or refusing to consistently self-assess, simply leads to higher operating costs and poorer service for internal and external customers.
So, what to do? Well, as usual we’d love some ideas from our readers. I’d suggest:
- Recognize almost everyone is in the bottom half of performance in at least some areas and, by definition, 50% are overall (this could mean you)
- Consistent benchmarking and self-assessment into your operating model
- Don’t fire the messengers who suggest such an assessment, only to lead to the unpleasant discovery that what we thought was a “B” is really a “D.”
Why do so many companies overestimate their own supply chain performance levels? What can be done to reduce the personal risk and encourage more individuals and managers to accurately look in the mirror? |
In my previous column – "Selling Supply Chain Solutions, not Just Products or Services" – I discussed how the Sell process is critical to a well-run and profitable supply chain.
