The COO Meets Supply Chain Strategy

A large company in the Silicon Valley retained us a few years ago to help them craft a supply chain strategy. We were about ninety minutes into the kickoff meeting with the COO when there was a loud, urgent knock on the meeting room door. Right after the knock someone barged in, looked at the COO, and announced, “Steve, we have a problem with a customer’s fab line. We’ve shorted them on several parts and the compliance penalty is about to kick in. We need to figure out how to get them back up and running as soon as possible.” The COO looked at me and asked if we could help them address the issue. I agreed and we spent the next few days helping them resolve the issue. They were well satisfied at the end of the week. Our team flew back to Atlanta.

The next month we flew back out to San Jose to re-start the project. We were about sixty minutes into the kickoff meeting with the COO when there was a loud, urgent knock on the door. Someone barged into the room, looked at the COO, and announced, “Steve. We have a problem with a customer’s fab line. We’re late delivering some key parts and their compliance penalty is about to kick in. We need to figure out how to expedite some parts as soon as possible.” The COO looked at me and asked if we could help them resolve the issue. I reluctantly agreed. We spent the next few days resolving the issue. They were very well satisfied with the week’s work.


The next month we flew out to San Jose to re-start the project. We were about thirty minutes into the kickoff meeting with the COO when someone barged into the meeting room, looked at the COO, and announced, “Steve. We’ve got an upset customer on the phone. We shipped them the wrong parts and they are about to kick in our non-compliance penalty.” The COO looked at me and asked if we could help with the issue. I said, “No. You hired us to help you craft a supply chain strategy that would make sure no one ever knocks on that door. We are happy to help you with that, but we will not be accomplices to this kind of chaos.”


As soon as I said it I assumed we would be fired. The COO was enraged. He said, “We hired you to help us.” I said, “Yes. You hired us to help you. But, it’s not helping you for us to jump through hoops every time your supply chain creates a shortage, delay, or error. We can help you eliminate the causes of the shortages, delays, and errors; but we need to pack our bags and go back to Atlanta if every time we meet someone knocks on that door.”


I am not sure anyone had ever told Steve, “No.” It was a shock to him. He calmed down after a few minutes and asked if I was serious. I said, “You hired us to help develop a strategy that minimizes the supply chain chaos and disorder that has become your norm. It has become your norm to the point that you are numb to it, maybe even addicted to it, and can no longer even imagine a supply chain world without it.” I also reminded him that their director of logistics had just suffered a psychological breakdown.


There was a very long silence. I assumed we would be fired. The next thing he said floored me. He said, “OK. You’re right. I never thought about it that way. What do you need?” I explained that we needed his undivided attention for three hours every other week, two of his best analysts full-time for four months, and unfettered access to their supply chain data.


After four months we had optimized their supply chain strategy and implemented a disciplined cadence to maintain the strategy. The chaos and disorder died down. The cost overruns stopped. The see-saw of excess inventory and dire shortages stopped.


Supply chain management is by nature a fire fighting business. Many days on-site with our clients are like adventures into a high stakes whack-a-mole game. Unfortunately, many organizations reward that kind of fire fighting at the exclusion of long-range planning. The goal of the planning process and organization is to stop playing and rewarding those who play supply chain whack-a-mole. Doing so requires the creation and commitment to a supply chain planning organization and process.


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