Tag Archives: Lean Quote

New Business and Lean Quotes Page Added

Lean and Business Quotes

I’m excited to announce that Supply Chain Cowboy now has a page devoted to business and lean quotes. I’ve gathered over 60 of my favorite business and lean quotes and added my own thoughts to many of them. They’re currently grouped into seven categories:

Here’s a sampling, five of my favorites:

“Continuous improvement is not about the things you do well ‐ that’s work. Continuous improvement is about removing the things that get in the way of your work. The headaches, the things that slow you down, that’s what continuous improvement is all about.”

– Bruce Hamilton

“A chess novice can defeat a master if moving twice each round.”

– M. Goldenson, Ten Lessons from a Failed Startup, in VentureBeat. 2009. Quoted in Nail It then Scale It, p. 96

“Small wins are a steady application of a small advantage.”

― Charles Duhigg, The Power of Habit: Why We Do What We Do in Life and Business

“A ship in port is safe – but that is not what ships are built for.”

‐ Rear Admiral Grace Hopper

“As long as I listen to my customers, I never need to have another original idea.”

– Niel Robertson, founder of Trada, in Do More Faster

I’ll add to the page regularly, so be sure to check back for updates. Also – if you have a quote that means a lot to you, add it in an email or shoot me a message on the contact us link.

Supply Chain Cowboy Business and Lean Quotes Page

How to Win Friends and Influence People in Your Supply Chain

 

How ti Win Friends and Influence People in the Supply Chain

Even though supply chains are becoming more automated, people still play a critical role in successful interactions and product flow. This is especially true for most small businesses. Relationships and conversations matter much more to small businesses because they don’t have the power of Walmart or Apple to rely on novel-length contracts and impersonal automation. Instead, phone calls, personal visits, special favors, and constant cooperation are what keep small companies alive and their products flowing. So it makes sense that the ability to win friends and influence people in your supply chain is a powerful skill that is needed to help your company survive and flourish.

I recently finished listening to the business classic, How to Win Friends and Influence People (HTWF&IP), by Dale Carnegie. Although originally published over 75 years ago, it’s still a consistent bestseller because it’s simply a great book. The lessons are timeless and apply directly to everyday life in along the supply chain. I’d like to share a few simple examples of how I’ve seen the book’s suggestions directly help me solve problems with vendors, customers, and fellow team members.

Always Make the Other Person Feel Important

“There is one all-important law of human conduct. If we obey that law, we shall almost never get into trouble. In fact, that law, if obeyed, will bring us countless friends and constant happiness. But the very instant we break the law, we shall get into endless trouble. The law is this: Always make the other person feel important.”

“Make the other person feel important – and do it sincerely.”

― Dale Carnegie, HTWF&IP

The strongest takeaway I gained from the book is that making others feel important can help solve most conflicts. The key, however, is to do so in a sincere way. Never use flattery or give undeserved phrase. However, by recognizing the important roles that others play – and seeing problems from their perspective, you can give them the due respect and honor that you would like to be given if you were in their place. Often problems vanish as soon as the other person feels acknowledged and respected.

I’ll first share an embarrassing example I’ve realized about myself. My company often gets last-minute rush orders that fall outside our normal fulfillment time. We have a standard lead time, but sometimes to win the sale, our salespeople must promise delivery in a much shorter period than our standard. When those orders are thrown at me, and I’m ordered to make it happen, I find myself reluctant to do so. However, when someone approaches me kindly, acknowledges how busy my team is, and asks me to please consider making an exception this one time, my attitude is completely different. I feel important and thus do everything I can to make sure the order succeeds. Of course, I recognize that I need to work on helping all orders succeed equally, but you can see how powerful an extra 30 seconds of conversation can be.

How to Win Friends and Influence People

Utilizing the same principal, I recently helped schedule a delivery appointment with a key customer even though we thought it couldn’t be done. Our warehouse supervisor had called for an appointment at the end of the month, and because the customer was fully booked, the customer said we couldn’t deliver until several days later. Our CEO wanted us very much to deliver within the month, so I called back. I talked with the same receiving clerk for a few minutes. I acknowledged how busy he was and listened for a minute about everything he had going on. I praised him that he’d be willing to handle that much on a Friday. After just a minute of getting to know him a little more, I explained that our order was very small, just a few cases, and he would be doing us a great favor if we could sneak it in between his many other important shipments. He said it wouldn’t be a problem – and we delivered that afternoon. Not only did the order get delivered on time, but I now have a friend at our customer’s warehouse that I look forward to talking with again.

Make others feel important – and do so sincerely.

Continuous Improvement through Continuous Praise

“Let us praise even the slightest improvement. That inspires the other person to keep on improving.”

― Dale Carnegie, HTWF&IP

Enabling others to improve is one of the most rewarding and effective methods of improving your company and supply chain. Through improving and encouraging the job skills, creativity, and problem solving abilities of others, your entire network will benefit from more engaged players and improved processes. In fact, a key tenant of the Toyota Production System is to encourage improvement through the creativity of every one of its employees and supply chain members. Imagine if Toyota managers were dictatorial, constantly shouting out commands and berating employees for mistakes. It’s not a stretch to predict that Toyota would be out of business if that’s how they managed their people.

Praise, in contrast, has an almost magical effect in motivating others to improve. Based on this principal, I’ve watch my company grow one of our key suppliers through targeted praise – and withholding the occasional frustrations.

When we first started producing one of our new products, we found a small firm of just a few people that was eager to work with us. Although eager, they often had quality control problems, delays, and incongruent processes that come from being a young company. I became frustrated many times, and recommended dropping them as a supplier – even though that meant they would likely go out of business.

Despite my recommendation, my wise manager counseled that we keep them on as a continued ally. My manager was careful to encourage them to improve:  he identified and focused on what they did right. When problems surfaced, we took a shared-problem approach and tried to solve the issues in a way that we and the supplier would bear responsibility together for improvement. We rewarded their progress with compliments and increased orders.

Because of the years of patience and encouragement, this supplier is now our miracle worker. We have other, more advanced suppliers. However, when we’re in a tight spot, no one can pull off an emergency order with next to no lead time like that small supplier we’ve grown. Because of this supplier’s expertise at short-notice orders, we’ve been able to catch many sales opportunities that we would have otherwise needed to pass up – or pay much more in expedited freight. I’ve witness how patience and praise can help a supplier grow to a point that boosts your bottom line when no one else can.

Avoid Arguments and Let Others Save Face

“If you argue and rankle and contradict, you may achieve a victory sometimes; but it will be an empty victory because you will never get your opponent’s good will.”

“Letting one save face! How important, how vitally important that is! And how few of us ever stop to think of it! We ride roughshod over the feelings of others, getting our own way, finding fault, issuing threats, criticizing a child or an employee in front of others, without even considering the hurt to the other person’s pride. Whereas a few minutes’ thought, a considerate word or two, a genuine understanding of the other person’s attitude, would go so far toward alleviating the sting!”

― Dale Carnegie, HTWF&IP

In the course of your interactions with customer and vendors, I guarantee that points of disagreement and contention will arise. Huge quality problems, incorrect freight counts, painful cycle counts, overdue orders, key stock outs, mountains of obsolete inventory, and…well, I’m sure you could add another 20 problems to the list. Indeed, problems are so common in the supply chain that I’ve heard supply chain management called problem management or fire management. But how do we fight fires while still thinking long-term? Indeed, supply chain success comes not only from solving the temporary problems, but creating long-term cooperation and synergy through strong relationships. Thus, we find ourselves in a precarious balance between the problems of today – “who’s responsible for fixing and paying for this?” – and long-term partnerships to improve the entire supply chain – “how can we improve information and product flow along the chain?”

Better defined, the risk we face is allowing the problem of the day to slow and destroy the progress made on long-term relationships. Even if someone is particularly difficult to work with, venting your frustrations and giving that person a piece of your mind could easily set back months or years of investment. Even if you’re completely right, avoiding argument – or letting your opponent gracefully retreat – may be the smartest move to make.

Certainly when money is involved, the process takes on higher stakes. In the interest of our companies, it certainly befits your and I to recover money that is rightfully ours. However, when arguments or disagreements become personal, bitter, and unrelated to the actual problem – these are fights to avoid.

When dealing with some of our Asian suppliers, this concept becomes especially important. Asian cultures treat conflict differently than other cultures. Saving face is much more important there than in the US or Europe – although we often fail to realize that it’s still quite important in any culture. When problems arise, if we are able to deflect the blame away from any specific person and instead focus on solutions, our suppliers are much more willing to work with us on solving the problem. For example, whenever I send an email to a supplier that dictates, “This was your fault. You need to either do this or pay a significant penalty,” nothing good ever comes from it. However, when I am able to approach the problem as the following, the problem is often rectified: “We noticed this problem. This is not good because our end consumers are not happy when this happens. What can we do to solve this problem?” Working together to solve a problem is always more productive and rewarding than pushing a punishment.

Final Thoughts

How to Win Friends and Influence people is a great reminder of how we should treat others. It brings together a lot of applicable advice on how to interact with people, and therefore becomes an excellent real-world resource that teaches just what the title professes.

I enjoy spreadsheets, databases, and technology, but relationships with people are more important than any automated email alert. Carnegie cites a study that explains how “even in such technical lines as engineering, about 15 percent of one’s financial success is due to one’s technical knowledge and about 85 percent is due to skill in human [interactions] and the ability to lead people.” I see it as no stretch to say that at least 85% of the success of your business in the supply chain is your ability to interact positively with others.

If you’ve already read Dale Carnegie’s book and would like another great read on improving human relations, then I recommend Leadership and Self-deception.

Better Supply Chain Decisions through Data Analysis

“Should we cancel the purchase order? We need to know today – and we can’t be wrong on this.” Only two-thirds of stores had reported any sales data from a newly launched product, and my team needed to know whether or not to invest tens of thousands of dollars in additional replenishment inventory. We already had a very large number on order, and based on pre-sales forecasts, we needed nearly double what we had coming. But with just a few data points, was it possible to tell whether we needed the stock or not? It all came down to the data: Could it be trusted? Were my assumptions correct? Was there enough to act on?

Soon after finishing business school and starting my career, I was quickly surprised by the contrast between the discussions that took place in the classroom and in conference rooms at the office. In academic case studies, my classes would look over graphs and charts to find important business lessons that the professor was helping us discover. In the real-world however, emotions, hopes, politics, and persuasion often make decisions much less clear than a business school case study. The small business I work with often relies on its supply chain team to make many decisions that require extensive data analysis. With moderate experience with excel and databases, my team has been able to slowly help our company make better decisions by taking out the myth of emotion and replacing it with the confidence of data.

Data-driven Analysis

Forecasting, inventory, purchasing, logistics, and process improvement are often done by gut-feeling in very small companies. When you don’t have the systems or people to gather and process the information, making your best guess is often all you can do. When operations are small, this works most of the time because you are able to get a feel for most parts of the business since you’re involved with most parts. But as the company grows, staying connected with each part of the supply chain becomes increasingly difficult. If you haven’t already, this is when you must switch from trusting your feeling to trusting your numbers.

There’s an excellent quote that I like:

“In God we trust. All others bring data.”

-W. Edwards Diming [Source]

It highlights that no matter how much we trust our intuition about a decision, numbers are often what really matter.

Which Data to Use?

One of the biggest problems with data in modern systems is the sheer size of the information you collect. If academic case studies were 200 pages instead of 20, schools might focus more on training students how to sift through the noise to find the important data. However, until then, experience and past trends are the best guides for making decisions.

With so many numbers in your system’s database, each department or side of a decision can often build a data-backed case for why their solution is the best. It then becomes important for the head decision maker to be able to judge which information is most relevant and accurate. He or she should start by asking the following questions:

  • Where does this information come from?
  • How was the data collected?
  • What are the assumptions being made?
  • Why do the two (or three or more) data points show different trends?
  • How could these conflicting results actually be pointing to the same conclusion?
  • What numbers can we all agree on?

By agreeing on the same assumptions and the pertinent data sets, you can better reach agreement on how to move forward with the information you have.

When the Numbers Lie

Sometimes, the numbers tell a different story from reality. Even if all analysis points to buying more of product,  only you can tell that the product will soon be discontinued, and that you don’t need more stock. Often data analysis isn’t so much about manipulating the pivot table, but adding the pertinent information that the system doesn’t cover. Adding everything you know that the system doesn’t, and then looking at the data all together often helps you make the wisest decision.

Highest and Lowest Case Scenario

“It’s only about two weeks of data, but it’s enough to make some decisions,” I said.

“I’m just not sure if we can trust it yet. There’s so much we don’t know,” a sales analyst replied. There were still many questions that we couldn’t answer. How many stores had yet to receive the product? Could the product still be in the back room? What if employees had bought the product instead of customers? I needed some way to make the 10 days of sales data point to something – and I needed enough confidence in the numbers that everyone could trust them.

I looked at the data again, and I wrote out what assumptions I could make. To reach my averages, I assumed every possible reason sales could be artificially low was actually taking place. Based on these high assumptions, I determined that average sales per store would likely be less than 3 per week. There were enough stores that had initial sales data that I could confidently say sales would very likely be between a high of 3 and a low of 1 per week. This was significantly lower than the 10 per week forecast for which we were about to place a purchase order.

“The data is convincing – and even if the high boundary number doubled to six per week, we’d still have enough without this order,” the brand manager replied. “Ten per week just isn’t a realistic expectation. Let’s cancel the order.”

By giving a confident range of average sales, I was able to help my team make the right decision and avoid large overstocks of inventory – something we have continually struggled with throughout the company’s history. Sometimes there isn’t quite enough data to make a definitive argument. In cases where you have even some data, using high and low assumptions can often give you enough confidence to move toward the right decision.

We’re not robots – and we shouldn’t focus solely on numbers. However, by incorporating more data into our decisions, we can often find better and more predictable results. The key is to know what data is useful, opposed to noise, and how to use that data correctly. Looking at the same, accurate data, and deciding on high and low assumptions are strategies that have helped move our company in the right direction.

Problems are Gold to be Treasured

Lean Quote Roundup

In his excellent book The Remedy, Pascal Dennis gives this beneficial advice on improvement:

“Problems are gold to be treasured, not garbage to be buried. Problems are the process talking to us, telling us where our management system is weakest. We need to use our stethoscopes to probe deeper, get to the root cause, and fix it. It we tune out problems, we’re lost.”

I love the mental image this quote produces. Treasuring problems is completely unnatural in most organizations. Problems in a business are like weaknesses in a sports team. A sports team’s fans don’t want to admit the team has any faults, but unless the team’s coach recognizes and addresses the weaknesses, they’ll never win the championship. Certainly, we all want to see our companies win, but we must be coaches, not just fans, to help them improve.

Problems are Gold to be Treasured

A healthy exercise to begin treasuring problems, and finding solutions, is a problem brainstorm. Gather your team around and spend 20 minutes listing all the problems and emergencies you have experienced in the last month. I like to use post-it notes for every idea so I can easily rearrange them, but a whiteboard also works well. Once you have a thorough list of problems, begin organizing them into main categories. “We ran out on item Z”, “we have way too much of item Y”, and “we had to expedite inbound shipments of item X” may all be grouped together into one category of “Inventory Management Problems,” or they may represent three different categories based on your circumstances. Usually, 80% of the issues fall into just a few categories, while the remaining 20% are outlying concerns.

The next step is to begin analyzing the common root cause of the problems in each category. I recommend the 5 Whys technique to dig deep into the problem’s origin. This will probably extend beyond the initial brainstorm meeting. A good analysis often takes an uncomfortable amount of honest thought and analysis. Often the instinct of self-defense drives us to hide problems. Focusing on solutions rather than blame can help break down obstacles hiding true problems.

The concept of listening to problems as the key to improvement has many other applications outside of business. Rather than ignoring problems with ourselves or relationships with others, we can instead use a stethoscope and learn the real reason for the trouble. Ignoring problems rarely leads to real and meaningful solutions. However, the reward for investing the effort to learn and enact appropriate solutions highlights the value of problems.

What are your thoughts? Add your comment below or subscribe to future posts.

Achieving Great Things

Lean Quote Roundup

Leonard Bernstein, a composer and orchestra director, isn’t mentioned in any supply chain book I’ve read. However, I love his quote that hangs above my computer:

“To achieve great things, two things are needed; a plan, and not quite enough time.”

The pressure of a deadline has a unique way of motivating action. Even if a plan isn’t perfect, the momentum from starting helps course correct and guide to the final goal.

Personal Significance

Recently, my company was able to clear out most of its obsolete inventory to a liquidation partner with a single order. In total, this included a fifth of everything we stocked–quite a bit of product. To make the project more challenging, we needed to repackage everything into different configurations. This rework amounted to 850,000 touches in two weeks; the task daunted my small crew and me.

I jumped into the production plan. Any mistakes at the front would hinder us from filling the order with variety packs, because if we used the wrong SKUs at the beginning, we would end up with the wrong ones at the end. I built a simulation in Excel that laid out exactly what items should be in each of the cases. It wasn’t perfect; I knew some of the inventory numbers were incorrect, but it helped me move forward in the right direction.

Since my team was busy with our usual orders, I brought on a new team of temporary employees just for the order. I even had my wife come in, since she was on summer break from teaching. We lined up everything numerically, built an assembly line to pack the boxes, and worked tirelessly. While slow at first, everyone contributed ideas of how to improve speed and quality. After instituting many suggestions, we reached a pace previously thought unachievable. Pallet after pallet filled our warehouse with product that was ready to ship. As the final Friday deadline rolled by, we were calmly cleaning up because we had finished ahead of schedule.

Now I’m not sure everyone would concur that several truckloads of reworked product qualifies as a ‘great thing’, but to me and my company, it was.

What’s your recent great thing? Please add your Comment below and share your story.