January 2004 | Commentary | Supply Chain Technology

The Lights Are On But Is Anybody Home?

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If we make a comment such as "the supply chain is as strong as its weakest link," we may well be accused of stating the obvious. Well, it may need saying again: the supply chain is as strong, as or as weak, as its weakest link. A company's supply chain has one major objective: creating satisfied customers, whose satisfaction leads to increased profits.

A dissatisfied customer is an anathema who can be nasty as well. A dissatisfied customer can lead to reduced sales; bad word of mouth; nasty, complex and messy returns; and the subsequent business losses that ensue.

The Lamp Dilemma

Let's look at an instance of customer dissatisfaction. An acquaintance of mine bought a lamp from a large national retailer: Bed, Bath & Beyond. He is a frequent customer of this store.

The lamp was a tensor type desk lamp, model LT638A, made in China (surprise!). The cost—$25 plus tax—was very reasonable (at the expense of many Chinese workers, presumably). The lamp served the man well, although not for the duration of 2,000 hours as claimed on the box. Eventually its halogen bulb, designated JCD 120V-35W, burned out.

Easy enough. The man went back to Bed, Bath & Beyond and bought the only small halogen bulb available at the store. It appeared to be the same type and size of the original bulb. The bulb was a GE halogen bulb made in Hungary (bless this great big supply chain world of ours).

He disassembled the old bulb housing from the desk lamp, unwrapped the new bulb, and voila! It did not even come close to fitting. The two prongs of the bulb were far too close together and even with pliers, no match was possible.

Our man now had a lamp and a bulb that were as good as useless. He immediately thought, "How could this store sell the lamps, yet not stock up on the replacement bulbs to match?" Could it be that the store's purchasing system could not cross-reference matching parts from two different, but intricately tied, products?

Hundreds of products beyond lamps need refills—staplers, printers, ZIP disks, flashlights. In most cases the product and its refill come from the same supplier, and most stores do not appear to have much trouble keeping staples for staplers and ink for printers.

Our man was not to be defeated. He knew Bed, Bath & Beyond had always given him satisfaction on returns and exchanges. So, he took the lamp, bulb and instructions back to the store. Alas, he had lost the receipt.

The store could not have been more cordial. Despite the missing receipt, they gave him cash back for his bulb purchase. The store manager admitted the store did not have the bulb needed for the lamp, and recommended that his customer find the bulb at the lighting store up the street.

When our friend asked the manager if the store's purchasing system could pre-figure or adjust orders from dependent but separate suppliers the answer was simply, "No way, Jose."

Our man did not have the heart to ask whether orders relating to different products from the same supplier were coordinated. He had his doubts if they were. The line behind him was too long anyway, so he figured he would try the lighting store at some convenient moment.

Anyone who thinks this is an isolated and special case would have to be asleep at the supply chain switch. Does anyone have data on the actual nature of returns: wrong product, broken, wrong style or color, chipped, open box, tampered with? How many returns are related to each problem? What, if anything, can be done about what I will call the ordering and fulfillment of dependent products from independent suppliers?

Finding a Bright Solution

Do we need to call a special session of the Supply-Chain Council? Where, oh where, in the SCOR model does this fit? Perhaps we should ask the software vendors if a solution already exists. If it doesn't, can we ask them to come up with a way to put lamps and bulbs together again?

Let us be sufficiently presumptuous as to offer a few suggestions. When a product is manufactured, is it possible to implement a special designation that notes when the product requires a refill or replacement? This designation could be placed on the bar code, box label, and any RF device as a fail-safe measure. Perhaps this designation could even produce an alert to the people ordering the product to suggest that they also order the refill from the same supplier or qualified suppliers?

If this is too cumbersome, could the ordering party—wholesaler or retailer—have a stipulation in their order form that asks their supplier if the product requires refills? And if so, what type and from whom?

The solution may come from those companies that are most hurt by returns and customer dissatisfaction. Whether this is the original manufacturer, the wholesaler, the retailer, or some other party within the greater supply chain is a moot point.

Do you have a solution? Email me: rmalone@inboundlogistics.com. We can swap war stories, and I can share whatever light I have.

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