Dead Horse Redux- The Sequel

I hesitate to comment - a rare condition - because of the risk of being seen as a one-trick pony.  But, a recent KPMG study, cited in a LinkedIn discussion, reported that 38% of survey respondents recognized that supplier relationships had been damaged by the cost pressures imposed on them during the Great Recession That's Over, But Won't Quite Go Away.

Duh!  Of course, customers who are busy reducing their suppliers' collar sizes with both hands during hard times will find that some of the romance of business entanglement can slip away under threat of bankruptcy.

KPMG went on to say that there is a renewed interest in building positive, collaborative, win-win relationships with suppliers - at least among supply chain performance leaders.  My own take is that the real leaders managed to maintain positive and mutually supportive relationships with key suppliers throughout the period of reduced business activity.

Most of us have figured out that it is vastly more profitable (for all parties) to retain customers, rather than to have to replace them.  Apparently, not as many have tumbled to the idea that it is costly and disruptive - and uncertain - when suppliers have to be replaced, whether they've been driven away, or driven into the ground, by powerful customers.

I suppose that's why performance leaders are the leaders, and followers tend to stay followers, but with a growing gap between them and the relationship leaders.

A Dead Horse Stimulus Program (DHSP)

In an unexpected and strong response to last week's blog, the Administration has announced the appointment of a Dead Horse Czar, Vito Corleone, who has robust experience in that field.  Don Vito has offered the following suggestions for handling a dead horse, the selection of two of which is mandatory. The application of tactics not listed and approved will disqualify an applicant from receiving DHSP benefits.  The approved menu of dead horse options available to the modern manager is:

• Buy a bigger whip
• Change riders
• Harness several dead horses together, for added speed
• Appoint a blue-ribbon commission to study the dead horse
• Organize a quality circle to discover new uses for dead horses
• Form a tiger team to revive the horse
• Benchmark with other companies' dead horses
• Hire an independent contractor to ride the dead horse for less money
• Secure additional funding for research into motivational tools to increase the dead horse's performance
• Implement company-wide training to elevate the organization's dead horse riding skills
• Refine KPIs to reflect the dead horse's new capabilities
• Issue an RFI for software that will make dead horses run faster
• Experiment to determine how many black belts are needed to bring a dead horse to best-in-class status
• Perform Value Stream Mapping to accelerate the dead horse's progress toward a lean state

Says Signore Corleone: "Basta!  No more excuses - no horse is too dead to beat!"  And no horse is too dead for some consultant to promise resuscitation. 

While these are general business observations, they certainly seem to apply to our world of business relationships and supply chain management.

Raising Horses From The Dead?

I'm not going to rant again about the folly of failing to prepare for recovery in the supply chain component of our still-struggling economy.  Beating a dead horse even harder won't change the reality that it's still a dead horse.

But, it is a bit embarrassing that USA Today, in Wednesday's above-the-fold Money feature repeated the now-well-understood woes of shortages and capacity constraints in transportation.  If the Chicken Noodle News of print journalism gets it, why didn't more supply chain service providers anticipate the depth and severity of the problem much earlier?

Full disclosure: I predicted the return of the driver shortage as a critical supply chain issue in economic recovery, but I utterly failed to see how severe and how early the crunch would come.

In the examples cited, PPG Industries has trouble finding trucks to move product to customers, who are apparently still applying just-in-time models to their businesses; both Con-way and Combined Transport are having trouble filling what appear to be modest numbers of driver positions.

What of the consequences, though?  When companies fail to build strong relationships with supply chain partners, they become more vulnerable to breakdowns in capacity, quality, timeliness, and/or quality in markets for commoditized services.

Once again, we learn that trolling for the lowest price in a marketplace of transient and transactional supply chain relationships can have profound cost impacts - consequences that might have been mitigated by maintaining consistent relationships with valued partners.

When You Need Special Protection

The five-year-old is now six, and getting sophisticated.  The other night at dinner, a pan-Asian spectacular, he confidently announced, "You know, you have to use chapsticks to eat this kind of food."  Taken aback, I dropped my chapsticks on the floor, occasioning grumbling from his grandmother  and shrieks of laughter from the munchkins assembled, who thought it was all part of the act.

 Reflecting on the incident later, I contemplated the dangers involved in applying close, but not quite right, tools to supply chain planning and operations.  They often sound like the right thing to do, the right way to go.  But, without closer examination, they could prove to be not as useful as hoped, or worse, downright harmful.  The difference between chapsticks and chopsticks is minimal in print, noticeable upon inspection, and catastrophic in mis-application.

Whomever is selling either solution, is usually confident, and persuasive, though.  It's up to you to discover when you need - and can benefit from - trying to use one or the other.

Note: ChapStick is a registered trademark of Wyeth Consumer Healthcare, which is being acquired by Pfizer Inc.