Question: Who benefits when asking for “relief” when shipping deadlines can't be met?
Answer: While working with a client, I attended a production meeting in which eight of their key staff members huddled around a table trying to schedule shipments. They’ve struggled with meeting on-time shipping deadlines. Calls were mounting from disgruntled customers. Monthly sales numbers were in danger of being missed.
As orders that day were being reviewed for their ability to be shipped, an eye-popping question was raised. The meeting leader, looking to the customer service rep, asked: “Can you call them and ask for relief?”
Bottom Line: This scenario raises interesting issues of both ethics and metrics.
This client determined that on-time delivery is an essential key performance indicator (KPI) for the company. Every day the staff meets to review open orders, to identify what can ship that day and what orders are likely to miss the promised shipping date. With pressure mounting from senior management and key customers, the need to ship on-time is growing.
From a metrics perspective, it is either all or nothing. Meet the date, receive a 100 percent grade. Miss the date, and it is a zero. Nothing in between.
If the customer extends the shipment date and my client is able to meet that extension, does that now mean that the shipment is considering timely?
If the extension is initiated by the customer, then yes, it is timely.
But this manipulation – there really is no other way to describe what was happening – is just not acceptable. Who is being fooled here? Senior management, for sure. When they get reports, the on-time numbers will be artificially higher than reality. How can they properly manage with inaccurate data?
Asking for relief because you can't meet an obligation doesn't benefit anyone. Live with reality. Do not fudge numbers to meet demands. Doing so hurts everyone involved, from top down. When the practice is discovered – which it inevitably will be – someone will be called on the carpet. How would you like that to be you?
I welcome your comments at lee@schwartzpro.com.
Lee Schwartz, former CEO and president of distribution and manufacturing companies, is principal of the Schwartz Profitability Group (SPG) that, for almost 13 years, has uncorked the operational bottlenecks of distribution and manufacturing companies, boosting their bottom line results. His consulting and operational turnaround work helps clients find solutions related to process improvement, supply chain management, inventory control, workflow design, and operational performance.
