In enlightening (video) interviews by Supply Chain Brain’s Bob Bowman, Dave Stenfort, Director of Operations at Anritsu, talked about the supply chain management challenges he and his team have faced. Anritsu has experienced business expansion in the information and communication field. The company's leading business division provides products and services used in the development, manufacture and maintenance of a range of communication systems ranging from mobile phones to the Internet on a worldwide scale.
Excellence in Firefighting
Stenfort made a profound admission regarding Anritsu’s recognition of its real case in the past: “Our organization was excellent at firefighting.”
Sadly, too many small to mid-sized business enterprises with which we come in contact actually believe that they are improving when, in fact, they merely getting better at firefighting.
There are several serious problems with “getting better at firefighting.” One of the crucial problems with firefighting, in general, is that it cannot and will not lead to any real improvement. Like its very real namesake, “firefighting” in the enterprise can only accomplish two things: 1) limit the damage being caused by the fire, and 2) lead to a restoration of the pre-fire normality. Recovery to an prior state is never, ever improvement.
Anritsu’s Stenfort went on to articulate clearly other damaging consequences of getting “excellent at firefighting.”
“The problem with firefighting,” Stenfort stated flatly, “is it takes a lot of resources, a lot of effort, and there [are] a lot of casualties.”
Of course, “a lot of effort” and “a lot of resources” are not so subtle code words for spending every enterprise’s most precious resources—time, energy, money and management attention. All the time, energy, money and management attention wasted on firefighting—restoring normality time after time—is time, energy, money and management attention that can never be spent on real improvement.
Of course, it’s bad enough if the firefighting hurts your enterprise internally. But, as Stenfort confessed, “Often you miss something that might affect the customer.”
Now, your enterprise’s failure to focus on real improvement and reliance on ongoing attempts to “improve firefighting,” has hurt your customers. This, in turn, will probably lead to reduced sales opportunities and potentially lost customers. The next step, then, is to increase spending on sales and marketing in order to make up for lost sales, retain offended customers, or capture new customers to replace those that have fled elsewhere.
Bottom-Line Results Are Affected
If we sum up the real financial outcomes for enterprises determined to become better at firefighting, rather than to uncover ways to create real, long-lasting improvement, they come simply to these: reduced revenues and increased operating expenses. These financial elements are disbursed across the enterprise, and are almost always unrecognized, but they are listed here:
- Increased payroll costs and expense from hiring additional personnel and more overtime
- Lost revenues from lost sales
- Increased expenses for sales, marketing and sales promotion
- Profits are reduced
- Return on Investment declines
When we work with our clients, our focus is always squarely on the enterprise’s bottom-line. We know that getting better at firefighting will never deliver long-term improvement that can be measured in terms of ROI (return on investment).
We use Thinking Process tools that help the whole management team to begin unlocking “tribal knowledge” while correlating every improvement with bottom-line results.
We would like to hear from you. Are you getting better at firefighting? Or, are you really improving? What is your view of what is happening in your enterprise and your supply chain?
Please leave your comments below. Thank you.