In my last post I talked about the importance of setting boundaries. This is related to one of the three parts of Operations Discipline: Constructs/Rules. Here is a true story of what can happen without appropriate constructs and rules.
A $100 million construction-related business had four people in their purchasing department…and 82 buyers. It’s all right that more than just the four in purchasing could buy, but this is where constructs and rules become essential. With so many people in different departments all buying without any clear rules, things had become a mess. For example, many of the people doing the buying didn’t know who the authorized suppliers were.
Another issue at this company was temporary items. When they got a new project, they needed supplies that they didn’t normally carry, and that didn’t have a part number or description in their system. Lacking a standard way to look up new parts, buyers would inevitably create a new part number and a new description…over and over for the same part, resulting in endless duplication and making it impossible to accurately track parts.
There were about 17,000 active parts. When we counted the real number of parts in the part master file, including all the duplicates, we found 164,000.
The problem arose out of a genuine desire to do right by the customer, but without constructs and rules within which to operate, they ended up with chaos.
© 2011 – Rick Pay – All Rights Reserved
