Expert Insight: Gilmore's Daily Jab
By Dan Gilmore
Date: Oct. 15, 2008

Supply Chain Comment: The 50 Percent Problem Shows Up Again


Majority of Respondents to Annual Trends and Logistics and Transportation Believe They are above Average in Customer Service, and that Cannot Be

As long-time readers know, one of my favorite topics is what I call "The 50 Percent Problem."

What is that? As I have written about before, it is the strong tendency of companies to overrate their own performance. Hardly anyone thinks they are performing below average, while by definition exactly half of them are. (See The 50% Problem Revisited and The 50 Percent Problem at Work.)

So I was pleased, in a sense, to see the principle in action again. In the 17th annual Trends in Logistics and Transportation report, presented at CSCMP 2008 by my friends Dr. Karl Manrodt of Georgia Southern University and Dr. Mary Holcomb of the University of Tennessee, there was this finding from the survey results of hundreds of shippers:

"On average respondents reported that overall customer service levels were better than competitors."

I hope you perceive that most companies simply cannot be better than the competiton. As always, there is something close to a bell curve around an average, with half above and half below the mid-point of supply chain or customer service performance.

There are only two possibilities:

1. The respondents are in aggregate overrating themselves (by far the most likely).

2. I suppose there is some outside chance that the survey population is biased towards the upper achievers, but this is unlikely given the size of the respondent base.

The key message, as always: the right answer is to work hard to know where you really stand, not what you just believe.

I’d love your thoughts on this.

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profile About the Author
Dan Gilmore is the editor of Supply Chain Digest.

Gilmore Says:

The key message, as always: the right answer is to work hard to know where you really stand, not what you just believe.

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