After the group had listed about 10 purposes, Cliff continued, “Now let’s rank these and other purposes we come up with as we go from small to large. We start by asking what the purpose of the smallest scope is. Then we continue asking “what is the purpose of that purpose” for each larger purpose until we have included the customer’s and customer’s customer’s purposes.” From this ranking of purposes, the group chose “distribute the company’s products to dealers” as the real purpose that needed to be accomplished.
Cliff built on the enthusiasm this focus generated, and asked the team to come up with possible ideas or Future Solution options. The team realized that all of the new options were smarter and more innovative than automating the loading docks. After developing a sketch of the five Future Solution options, the team identified a possible path to implementation. The team chose “direct factory-to-customer shipping based on electronic orders” as an effective Future Solution two years from now. One surprising result was that the company was able to sell out of all 24 warehouses.
Cliff posed the following question to the group: “How can we make this idea viable in the present and at the same time as we work towards this Future Solution?”.
The team defined the Future Solution in more detailed and consistent steps that required implementation. The plan was streamlined, introducing new concepts as previous changes were completed – we call this the Existing Solution. For example, the plan envisaged rearranging some manufacturing operations to give each manufacturing site a variety of products to ship to order, and four warehouses were unified to handle the loading of goods to small businesses.
Included in the plan are various elements including:
-Train current employees for new positions,
-Arrange cases for possible early retirement,
-Establish the necessary interrelationships between the remaining four warehouses, the factories and the transshipment facilities, and
-Re-organize the staff. At the next meeting, Cliff told Paul: “You should not approve the proposal to automate the loading dock”. Paul was surprised by the news and then repeated in amazement: “Should I do what you say?”.
Cliff’s calm response was, “Sell the 24 warehouses and do direct ship from manufacturing to customers.” At this point Paul was really taken aback. Cliff outlined the Future Solution and explained how the Existing Solution proposal of selling the 20 warehouses and keeping the other four for lower volume traders would move the company toward the Future Solution. In addition, Cliff outlined the proposed action plan for the next 6 to 12 months and the need for additional planning to prepare for upcoming changes to move the solution closer to the Future Solution.
While automating the loading docks may have been a creative high-tech solution, it was clear that it would be a costly proposition when used for the wrong purposes. The Future Solution in the company’s distribution operations had become a strategic competitive advantage. As the team continued to explore ways to move the system to the Future Solution through advocates and colleagues, an interesting trend of events emerged. Conversations with several other companies that also produced products with relatively short life cycles in non-competitive areas led to the expansion of the Existing Solution; the four expanded warehouses could be used to transship products for other companies. This opened up a lucrative opportunity for Cliff’s company.
(To be continued … )
