Broken Processes and Broken Promises

Commerce operates on promises. Some are formalized in contracts, others are informal agreements. The processes that allow your supply chain to keep those promises also need to be managed and controlled.

Do not accept broken processes, urged Tom Sanderson, CEO of third-party logistics provider Transplace, during an SMC3-hosted discussion on the formal systems needed to address continuous improvement through Lean Six Sigma.

As Sanderson described how process improvement benefits an organization and the effect it has on customer service, I heard echoes of comments from Wes Kemp, when we discussed his four-decade career with less-than-truckload carrier ABF.

Kemp spoke in even broader terms about the commitment between supplier and customer, and the role of the freight move: "Without delivery, there’s a breach of contract." In Kemp’s opinion, a service failure that results in a breach of contract between carrier and shipper also constitutes a breach between shipper and consignee. When transportation fails, a promise to a customer is broken.

Sanderson and Kemp aren’t alone in their efforts to identify and fix broken processes. In businesses everywhere, the current mantra is: "People, process, and technology."

Many organizations responding to process problems may not go far enough in addressing improvements. The first, and easiest, targets for improvement are self-contained processes—those that function entirely within your organization.

But don’t focus only on improving the portion that is inside your four walls—even though that is the portion of the process you control. A supply chain also comprises the portion you influence (or should be managing). This portion includes not only the suppliers who provide goods, but also applies to services you hire or those hired to serve you as a customer.

If your quality engineers would make a trip to a manufacturing plant to resolve a production problem, why wouldn’t you do the same to solve a service problem? Remember Kemp’s point: There is a contractual bond between the supplier, the service provider, and your organization that will carry through and affect the other side of your supply chain—your promise to your customer.

Process improvement, therefore, becomes much more than a cross-functional effort inside your organization. It is also a collaborative effort among your supply chain partners. Improve dock efficiency, and you benefit inbound shipments as well as outbound service. Turn the trucks at your dock faster and more efficiently, with less product loss and damage, and you improve your suppliers’ costs while ensuring your ability to serve customers more cost-effectively.

If you can’t achieve collaboration and improvement among suppliers and service providers, you may have a people issue. Maybe you need to change providers. If you are having customer service issues, you may want to adjust the promises you make so that they reflect those you are willing and able to keep.

If your customers won’t work to improve processes, it affects your ability to serve them and impacts both your costs and your carriers’ costs. That’s a losing proposition, which will only be exacerbated as capacity tightens.

The excessive time spent dealing with broken processes and broken promises can infect your supply chain, diverting resources from positive action to negative or unproductive activities. Heal the process and you enhance your ability to keep promises and establish healthier relationships with customers.

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