9.24.2008

Wall Street Journal Misses the Boat on Business Advice

It is inevitable that, during tough economic times, you start seeing articles advising people and businesses how to save money.

There is nothing wrong with that. But as a lean advocate, when I look at advice for businesses, I become frustrated over what is missing.

Case in point: An article in The Wall Street Journal discussing recent increases in transportation expenses and ways companies can cut shipping costs.

The advice, offered by writer Diana Ransom, includes:
Obtain discounts by paying with business credit cards
Use electronic postage
Try fulfillment services that store inventory in other countries and can help avoid international shipping duties and customs fees
Use comparison websites to compare rates of shipping companies
Obtain discounts through membership in a business or trade organization
Time your shipments several days in advance to avoid last-minute or next-day charges
Consolidate deliveries
Negotiate with suppliers

What is wrong with this advice? Nothing, really, although I do have some concerns about the use of fulfillment services, which might undermine efforts to reduce inventory.

However, Ransom fails to suggest taking a lean approach by finding ways to improve the overall fulfillment process – which could be of great value.

Such an approach might include mapping the fulfillment process to identify opportunities for improvement, setting up a kanban system, and a variety of other actions.

I am not a supply chain expert, so I do not know what all those actions might be. I defer to people like James William Martin, author of Operational Excellence: Using Lean Six Sigma to Translate Customer Value through Global Supply Chains and Stephen Cimorelli, author of Kanban for the Supply Chain: Fundamental Practices for Manufacturing Management. (We publish a
large collection of books on kanban and supply chain issues.)

The main point is that when you are trying to save money in tough economic times, you should think about lean first.

1 comments:

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