The Art Of Harmonious Rebalancing The Supply Chain Company

Many years ago, I was engaged in a strategic transformation project in a mid-size airline. For some curious reasons airline was of critical importance to national economy and occupied a very high position in national political totem pole.

Thus, almost every occurrence, every AOG (aircraft-on-ground, an emergency) and every ATB (air-turn-back, a bigger emergency) was part of national TV and financial journal news.

These AOGs and ATBs were so numerous that under pressure from political masters who called shots, company had to start a full-fledged strategic transformation project.

While conducting initial diagnostic, I was intrigued to notice an extremely low morale within engineering department.

Despite very high quality of training, and abundance of very expensive tooling and parts, most of these highly qualified aircraft engineers were almost constantly running from AOG to AOG (one emergency to next).

Even corridors were gloomy, poorly lit and had oil residues. Yet, whenever I crossed over from engineering department to flying staff, mood changed diametrically.

Most of pilots were very upbeat, corridors were luxurious, well lit and thickly carpeted. It appeared as if airline had two type of citizens – first class citizens who were pilots and second class citizens who were engineers and rest.

Over time, resentment to this class structure had built up to an extent where second-class citizens were either apathetic, or perhaps even somewhat antipathetic.

Today, while reading Ed Catmull’s book Creativity, Inc: Overcoming Unseen Forces That Stand in Way of True Inspiration about story of startup of Pixar (maker of Toy Story and many other blockbusters, which was sold by Steve Jobs to Disney for around $4Billion), I came across a similar theme. Here is how Ed describes it:

Some things of Supply Chain Company

” Now, though, as we assembled crew to work on A Bug’s Life, I discovered we’d completely missed a serious, ongoing rift between our creative and production departments. In short, production managers told me that working on Toy Story had been a nightmare. They felt disrespected and marginalized—like second-class citizens. And while they were gratified by Toy Story’s success, they were very reluctant to sign on to work on another film at Pixar.

Pixar Studios

I was already captivated by idea – I had noticed it earlier too, in many other companies though not to such a stark extent as airlines example quoted above. In a hospital, I had observed that doctors were first class citizens and rest of staff were second class citizens. In a steel manufacturing company, I had noticed that metallurgical engineers were first class citizens.

In a chemical Rebalancing The Supply Chain Company, the sales engineers who worked closely with the customers’ engineers had the most say.

In one mid-size meat and livestock company, five out of top seven positions were occupied by people holding a PhD in veterinary sciences. I could probably recall dozens (or more) of such examples in a great deal of detail.

In fact, coming from a prior background in shipping industry, I could relate to this syndrome.

In most shipping companies, Marine Engineers (not Captains) carried most of weight; they were responsible for spending (or saving) most money on parts and maintenance.

Thus, owners were always very focused on working closely with engineers to minimize costs. Interestingly, most airlines have not yet cottoned on to this fact, or pilots’ unions are far too strong to do anything about it.

To a large extent these biases are only natural, and to be expected. Yet, in many places they get excessive and dysfunctional.

In many of instances quoted above, companies were a victim of such an occurrence (because that is why they were so easy to recall).Here is how Ed describes situation in him company:

” If there was one thing we prided ourselves on at Pixar, it was making sure that Pixar’s artists and technical people treated each other as equals, and I had assumed that same mutual respect would be afforded to those who managed productions. I had assumed wrong. Sure enough, when I checked with artists and technical staff, they did believe that production managers were second class and that they impeded—not facilitated—good filmmaking by overcontrolling process, by micromanaging. Production managers, the folks I consulted told me, were just sand in gears.

Ed’s book is a good story, and worth reading. He describes in detail how he got these problems ‘sorted-out’ and got team for second film organized.

And, the rest is history. Slight adjustment of balance, in most of cases here, changed the entire organizational dynamics to a very large extent.

In the case of the airlines quoted at the beginning, a new role of Chief Operations Officer who was responsible for both the flying staff, and the engineering staff managed to create that balance.

Without such a rebalancing the supply chain company act (by whatever means), all the rest of the process re-engineering, planning, control, cost management and six-sigma etc. may not have yielded meaningful results.

Similar slight re-balancing achieved the end goals in most other such cases too. woman-yogaIn order to keep this blog post short, I will not go in my views on how these biases (or imbalances) build up, and remain unrecognized despite leading to massive dysfunction (consider the airlines story above); as well as how to know when they are becoming excessive and how to achieve a harmonious re-balancing.

Suffice it to say here that one should keep an eye on them, lest the company, blinded by its own single-minded brilliance, goes the way of Enron. Notes:

1. For reasons of confidentiality and propriety, I have had to change many details and deliberately leave the other details sketchy. Yet, the key message would not change if I had given these details.

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