I am never one to shy away from a good debate. However, be careful of the critics who can’t back up their biases with facts and data. Transportation are one of the common critics of reducing order size and having frequent deliveries. They argue, if we start to receive items more frequently, costs will increase. We need to reframe the argument. The amount of freight over time doesn’t change, just the frequency of deliveries. Actually, the predictability of delivery times, dates and weights greatly improves. In case you missed it; variability is the curse of cost containment. Executive Leadership needs to demand the same level of professionalism from support organizations as they do of Operational Excellence practitioners.
Be cautious of cost center accounting. To break this cycle of erroneous and antiquated costing, and to shift the paradigm, the focus must be on TCO and not just on a few localized costs.
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I would like to give special thanks to Brian Keyser for recommending this newsletter. If you have any suggestions for future newsletters, please feel free to e-mail me or call me to discuss ideas.
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