Studious disregard of warning signals

R. Shekar | Updated on February 06, 2011


An eminent member of the board highlighted the tendency of successful organisations to profess to be ‘learned and yet remain blissfully ignorant'.

Upon request to elaborate more on the subject, he pointed to some of the most persistent signals that are prone to be studiously disregarded until they become difficult to ignore.

He cited typical examples beginning at the stage of planning, to resource mobilisation, availability levels of materials and facilities that helped deliver the customer order in one pass.

Still dealerships and customers reported defective shipments that meant handling needless customer complaints and effecting free replacements to customers. All these instances were tracked and presented graphically. Tickets represent planning deficiencies in terms of units (unrealistic assumptions) and whistles, gaps in resource mobilisation in terms of units.

JIT Red in terms of SKUs refers to infringement of safety stock levels Downtime shows the time to restore facilities back to normalcy in minutes.

OTIF Index on a base of 1000 indicates the proportion of total deliveries made on time and in full in a single pass.

DOA (in 1000 units) indicates incidence levels of defective shipments

Leakage refers to the value of amounts expended towards loss containment and recovery in rupees.

The member insisted upon the stringency of reviews of the plans and resource mobilisations levels as being the key to eliminating problems downstream. He called it the Upstream Management Control points. For example, the planning process may continue to hold the set of assumptions forming the basis of the plan unchanged, but tweak all other parameters at will.

Unless the basis for plans is scrutinised as stringently as the deviation in other internal operating limits, surprises are bound to be in store.

The member suggested that the board should spend more time deliberating upon the assumptions underlying the plans rather than on grappling with the issues at the ‘tail end' of the business.

Question for the directors

The data presented to the board confirmed a compelling need for reconsideration of the planning process.

However what remained unclear were the reasons underlying the organisational inability to arrest the trend.

Was it truly an attitudinal problem labelled by the member as ‘studious disregard'? Or was it more a lack of understanding of the terminologies of ‘Upstream and tail-end' and their relevance to managing the business?


Published on February 06, 2011

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