Death by Ducks By: Bill Hardin   One of my favorite expressions is “nibbled to death by ducks”. It paints an amusing but very graphic image of a seemingly impossible situation, but is it really impossible?   I worked with a client who was experiencing very wild swings in physical inventory variances, ranging from a major write-down, after having taken a physical inventory at the end of one quarter, to a correspondingly confusing write up at the end of the next quarter. Since the company’s bank based the credit line in-part on inventory value, the bank’s auditors were becoming very concerned. Equally importantly, the company was constantly running out of materials, despite a sophisticated ERP system that should have been very accurate. The company was clearly in deep trouble and was looking for the cause that was driving all the issues.   No Single Major Issue   An investigation didn’t find a single major issue but found minor issues in virtually every area related to the specification, purchase, receipt, warehousing, and use of material. The company had hoped that the inventory problem was the result of a single system problem but concluded that problems were widespread throughout the operation. Bill of Material errors were rampant yet fixing them was a low priority in engineering. Unit of measure issues were common in receiving, yet no one had the time to train the personnel properly. Purchasing knew of many vendor issues but allowed them to continue, largely because no one else was fixing problems in other areas. In essence, each department took the approach that other departments weren’t fixing problems, so why should they? The individual problems weren’t a priority but the overall results were!   Addressing the Symptoms   At a loss for a solution, the company initiated a number of secondary “work-around” systems rather than attempt to fix what appeared to be hundreds of problems. The work-around solutions added people, additional inventory, and additional paperwork but still did not address the true root causes.  The results actually worsened and the lender began tightening the noose.   This company was well prepared to fight “an alligator” in their material planning and purchasing systems but, while looking for a single cause, ignored the increasing number of “ducks” that were nibbling away at their results.   The Autopsy   “Death by Ducks” is slower and less noticeable than that caused by major problems, but it is a common occurrence in companies and, unfortunately, evades detection until it is frequently too late. The root cause is essentially cultural rather than technical, and generally problems are widespread throughout the company. Since the problem is cultural, technical solutions (including the “work-arounds” described) will not resolve the issues and merely add cost.   Get Your Ducks in a Row   If the “Death by Ducks” story sounds far too familiar, give us a call and we can share with you how other companies have successfully dealt with this problem. You'll be glad you did, the payback can be dramatic.

In addition to  Lean Consulting Services,  TAG provides   Project Management, Engineering & Technical Support, Training Services,  Maintenance & Reliability Services, and Architectural & Design Services.  Call us toll free at 877-824-3647 or visit  www.tag.bz for more information. About the Author:   This week’s article was written by TAG Associate, Bill Hardin. Bill has over thirty years of technical and leadership experience in process engineering, quality, and plant management. He has also had corporate responsibilities as Director of Manufacturing for nine plants spanning the United States. Companies that Bill has worked for include Bendix/ Allied Signal, Duff Norton, Gentz Aerospace, and Haworth, Inc. Bill’s education includes a BS degree in Engineering Operations from North Carolina State University and a Masters of Business Administration from the University of North Carolina at Charlotte. He is a member of the Institute of Industrial Engineers.