Ellery's Essays

What Makes a Supply Chain Visible?

This is the third (3^rd) time I’m correcting myself regarding Supply Chain Visibility. I erred in my first essay published on June 01, 2020, We Need Better Monitoring Systems, when I said: “two things comprise a monitoring system: visibility and guidance.” And I erred again in my second essay dated December 09, 2025, Supply Chain Visibility: Monitoring & Measurement, when I wrote: “when it comes to setting up a system of visibility, two features must be present: monitoring and measurement.”

What I had learned is that Supply Chain Visibility should have four (4) features; these are: transparency, monitoring, measurement, and guidance.

Transparency

Transparency seems self-defining. Isn’t it a synonym for visibility? But I disagree, it’s not.

Transparency is the opposite of opaque, which, by definition, is “impenetrability of light,” or “so obscure as to be unintelligible.” Transparency is, therefore, how much one can view and comprehend a particular object of observation, via how penetrable and intelligible that object is.

Transparency isn’t a question of not only being able to see something but also being able to observe it. It isn’t just something one can see through and through via a medium or window; it is about how discernible the characteristics of whatever it is one is examining.

Monitoring

Monitoring is the capture of data. It consists of the actions of sensing, detection, and tracking.

‘Sensing’ is the scanning or being aware of the status or conditions of items, resources, and tasks.

‘Detection’ is the identification of items or tasks. As the monitoring system seeks via its senses, it discovers, distinguishes, and identifies items of interest.

‘Tracking’ is the viewing of trajectories & trends of items or tasks via the data sensed and detected.

Effective monitoring depends on the performance of these three actions. It can’t be just one or two in the absence of another. One cannot monitor quality, for example, if the system watches production but does not detect defects.

Measurement

Measurement is the quantification and evaluation of data. It’s not enough to have systems that merely senses, detects, and tracks; the system must also be able to organise, gauge, compute, and distil data into information which would become useful.

In short, transparency displays the scene; monitoring delivers data; and measurement packages the information.

Guidance

Three (3) mechanisms comprise guidance: indications, alerts, and advice.

An indication is the pointing out of specific information, featuring things like trends and behaviours.

An alert is the raising of attention to information nearing or crossing preset limits or guardrails.

Advice is the offer of suggested or obligatory actions or commands in lieu of the level of alert.

Taking together these three (3) mechanisms, guidance is the bringing of attention and the laying out of options for decision and action.

In building an effective system of visibility, these four (4) features: transparency, monitoring, measurement, & guidance, must be present. Visibility in the supply chain would not be complete if one (1) feature is missing.

And thus, I hope I have described Supply Chain Visibility more completely.

What would be examples of Supply Chain Visibility systems that showcase these four (4) features?

Large global courier corporations employ tracking systems which show where packages are at any given time frame. These systems are transparent for managers to observe & analyse the flow of packages from their starting points to their destinations. Operations personnel & clients could also monitor where packages are in real-time. Managers and clients can use the monitoring data to measure performances of tasks along the packaging supply chain. Notifications & alerts would guide operations personnel in expediting deliveries and telling clients their packages have already arrived at their doorsteps.

Customers at a Chinese restaurant could watch chefs & cooks prepare their orders of xiao long bao dumplings through a transparent two-way mirror. Supervisors monitor & measure the performance of the cooks & chefs. Reports at the end of the day guide managers on quantities of ingredients used versus items sold.

These examples scratch the surface as there are many ways to enhance supply chain visibility. The challenge lies in how you and your peers, superiors, & partners (e.g., vendors & customers) define visibility in the first place.

It starts with defining what one wants but keeping in mind what the potentials are for such a system.

And I can tell you, there is much more to supply chain visibility. I know, it took me three (3) essays to get it.

Find Ellery

Both Hard Work and Luck are Essential to Success

There are self-proclaimed experts who would tell you to “do what you love” and “follow your passion.” They’d say that the financial rewards would come naturally.

I had been hearing these lines for years and I can tell you they’re hogwash.

What I did learn was that hard work and luck were essential to success. Not either one but both were needed.

Some may disagree, but that’s what I learned. Work hard and hope I get lucky along the way.

You don’t make money by waking up every morning at 4:00am to get a so-called daily headstart by checking your email or do morning calisthenics. You don’t get wealthy because you adopted a well-articulated vision & mission statement. And you don’t get rich because your parents or a rich friend loaned you money.

You succeed because you had what you thought are good ideas and you ran with them. You invented products and made available innovative services which made your ideas into realities. You figured out how to sell them. You didn’t stop when you had more demand that you could handle. You delivered, kept costs under control, and priced your products & services competitively. You were relentless.

You enrolled people whom you not only hired as employees but also labelled them as partners. You welcomed their input, worked with them in teams, but still solely made the decisions. You were a teammate, but you reminded them who’s boss.

And you did the same with customers, vendors, and investors. You were the leader of your enterprise, not them. You appreciated their support and their advice, but you steered your enterprise. There were times you spent sleepless nights thinking about scary things some people warned you about, but you always knew you were the true owner of your ideas behind the enterprise, and you determined its destiny.

The more successful you became, the more ‘friends’ appeared. And with ‘friends,’ came their clamour for your attention. Some would seek your company with the aim of getting a piece of your action. Some would ask for your time, your donation to a questionable ‘worthy’ cause, and some would outright ask for a sizeable cash hand-out. You would become wary, therefore, of the intentions of the people you meet and know.

You would judge who deserved your attention and who didn’t. You may have felt guilty at first for ignoring the latter, but you’d grow out of it and learn not to think twice. You knew when to care and not to care about what people said.

You get that one-way sacrifices which don’t contribute value-added results are not as worth it as win-win mutually beneficial relationships. You stand to benefit as much as your counterparts did. Seeking mutual benefit is not a sin. It’s a virtue.

You depended on luck and that meant watching out for opportunities. When opportunities did knock, you made sure to answer. The trick was to find out which were potentially rewarding and which weren’t.

I had deemed myself as a not-so-successful person. I squandered opportunities despite working hard with what I had. Relative to many successful people, I felt I didn’t make the cut.

But I also learned that it’s futile to compare myself to other people. I still have my ideas and it’s still up to me to work hard to make them successful realities given my simultaneously seeking luck from potential opportunities

In short, you’d find success from working hard and looking for luck. Not from taking advice from or rubbing shoulders with so-called experts you don’t really know or who don’t really care about you or your ideas.

If you do want me to suggest a slogan. Here is my favourite:

You can do it.

Find Ellery

Waiting for My Car’s Licence Plates—A Case of Urgency vs. Importance

I bought a new car on April 29. The dealer via the Philippines’ transportation bureau, the Land Transportation Office (LTO), gave me the registration papers twenty-seven (27) days later on May 26. The licence plates were finally released on June 17, twenty-two (22) days after the registration papers and forty-nine (49) days total from the purchase date.

The LTO bragged in September 2025 that new-car buyers could receive their registration papers & licence plates on the same day they purchase their automobiles.

The LTO, about the same time, announced that traffic enforcers shall cite and ticket motorists who drive vehicles without proof of registration and license plates.

A month later, the LTO said it was impractical to enforce the “no-plate, no-travel” policy, citing issues in the processing of registrations and deliveries of licence plates.

More than six (6) months later, the issues apparently remain unresolved. But never mind, as per the dealer’s sales representative, I could drive the car as long as I had the proof of registration.

To the dealer and to the LTO, the processing of registration of new automobiles and the releasing of licence plates is a problem, yes, but it’s not an urgent one. As buyers could drive their new cars even without licence plates, there is no significant inconvenience for the dealer’s customers.

A problem is urgent when one perceives external pressure to solve it. When I complained to the dealer’s sales representative that the registration was taking so long, the sales rep repeatedly followed up the staff in charge of coordinating with the LTO.

A problem becomes important when one believes that solving it will facilitate performance in meeting strategic objectives. I didn’t think the dealer felt the problem of late registrations and delayed licence plates was important. Given that the dealer had already sold me a new car and I paid cash for it, there would be little, if any, value in assisting me to get the new car’s registration & licence plates faster.

For the LTO, however, the delays in registrations & licence plate releasing could be considered not only an urgent problem but an important one.

It is part & parcel of the LTO’s mandate to ensure the registration of land transportation vehicles in the Philippines. Registration provides assurance that vehicles are legally obtained and operated & maintained in compliance to standards of public safety & environmental protection.

When there are delays in the registrations of vehicles, whether old or new, in which there would be motorists driving vehicles lacking proper registrations & licence plates, the LTO would be remiss in its mandate.

The problem of delayed registrations & licence plates, maybe not important to automobile dealers, would be important and urgent for the LTO leadership. It’s a problem that would need to be addressed and solved for the sake of the LTO meeting its strategic objectives.

Absent from this argument is the customer, who in this case is me. How important to the dealer and the LTO is my satisfaction for my buying the new car?

From this frame of reference towards the dealer and the LTO’s objectives, it seems my satisfaction wasn’t that important. Only if I did complain, maybe I’ll catch either one’s attention. But as long as I didn’t, I wouldn’t be posing a problem to anyone.

A problem becomes one either out of urgency or importance. Customer service becomes a problem depending on how much attention unsatisfied customers clamour for it or if leaders see it important enough to influence performance.

Find Ellery

Goodbye, Sky

My home’s solar panels don’t start generating until 8am every morning. A nearby high-rise building to the east of my home obstructs the rays from the rising sun, preventing my house’s roof-mounted solar panels from generating electricity.

The same happens at 4pm when another high-rise to the southwest blocks the sun. My home, therefore, only effectively harvests eight (8) hours of solar energy, assuming it had been sunny all day.

Environmental activists argue that climate change is the biggest threat to planet Earth.

I disagree.

I believe that the bigger threat is pollution.

There are different kinds of pollution. Air pollution, water pollution, land pollution, noise pollution, thermal pollution, and sky pollution.

The buildings that obstruct my home’s solar energy generation contribute to sky pollution. They not only block sunlight, but they also take away the view of the sky.

There was a time when I could set up a telescope on my house’s front yard at night and look at stars, planets, comets, meteorites, & nebulae. Now, no more. The high-rise buildings’ lights have drowned out the dark sky, and I’d be lucky if I could catch a decent glimpse of any heavenly object. It doesn’t help that numerous airplanes and satellites populate the night sky. The dark sky is no longer dark.

It also doesn’t help that air pollution blurs the sky many days in a year. Fine, that clouds come natural at certain times of the year but smog from factories and motor vehicles distorts the horizon every morning through evening.

And air pollution together with water and land pollution stinks, on top of making it hard to breathe. I pity the people who live near landfills, harbours, and creeks, which are the dumping grounds of trash.

I live in Manila and the sad realities of air, water, & land pollution are compounded by the noise of urban life. Cars honk, motorcycles rev without mufflers, stereo amplifiers blare, and people talk & sing loudly.

While climate change may be a concern for some nations, pollution in my opinion is the immediate problem, at least at where I live and for those with similar circumstances.

The irony is that it’s much more straightforward to mitigate pollution than it is to combat climate change. An effective fix for water pollution, for example, is to invest in sewage treatment plants. Incinerators would be an answer to reducing trash; of course, they’d have to have filters to avoid air-polluting particulates. Local law enforcement could manage the dins of noisy motorists & inconsiderate party animals.

And if city halls could just not issue building permits to high-rise developers at residential neighbourhoods, that would be a big help to prevent any more decrease of whatever’s left of the sky.

It is too bad that much damage had already been done and is irreversible. I think I’ll neither get a view of a clear horizon, a dark sky to see the stars, nor twelve (12) hours of sunshine & blue sky ever again.

Some people say I should just travel to places if I want to experience un-polluted vistas. But that’s not the point, is it? Pollution is an urgent threat but not an unsolvable problem. And unlike climate change, there are things people could do to alleviate it, if not solve it.

It’s futile, however, to salvage what is already lost.

Goodbye, sky.

Find Ellery

Avoiding ‘We’ in Writing

https://www.indiewire.com/wp-content/uploads/2013/07/mad.jpg?w=620&h=215&crop=1

I had been using ‘we’ in my essays and in conversations. Priests & pastors after all use them often in their sermons. I had surmised that using ‘we’ provided an interpersonal connection with the audiences I address.

Some advice gleaned from the Internet, however, tell me to avoid using personal pronouns and that I should on the other hand use third-person nouns. For instance, instead of you, I, or we, I should use ‘one,’ ‘this writer,’ or ‘people.’ Third person nouns would make the writing look more formal, more authoritative, the website wannabe advisors say.

I don’t fully agree with the idea. Third person nouns seem to make whatever I write less interesting, or to put it bluntly: boring.

Essays using ‘I’ and ‘you’ are more riveting; they hold my attention. I guess it’s because using ‘I’ and ‘you’ imply that the author’s content comes straight from experience and simultaneously with insightful advice. ‘I’ and ‘you’ simply does make the author’s storytelling more attractive to read.

I would agree with the wannabe web-based advisers that using ‘we,’, would make me look pretentious. Maybe priests & pastors could get away with ‘we’ in their sermons but as I am neither nor am I like them in recognisable authority, I should avoid ‘we’ in my verbal & written discourses.

I could imagine not a few readers (facetiously assuming I have a significant number of such) thinking like Tonto whenever I use ‘we.’ And it is with a bit of anxiety that some readers would, that I take it upon myself to avoid using the said pronoun.

I do listen to sermons of priests & pastors. If I do get the motivation to go to church in the first place.

Find Ellery

Solving Urgent Problems in Supply Chains

A shipping manager of a medium-sized consumer goods company is dispatching deliveries one morning. One of the company’s trucks unfortunately won’t start. The driver says the battery is dead. The truck is loaded with products a customer ordered and is waiting to receive. The truck is twenty (20) years old, and the manager already secured top management approval to have it replaced with a new one in a few weeks. Should the manager buy a new battery, or should he transfer the products to another truck for delivery later in the day? Should he retire the old truck and wait for the new truck?

Urgent problems are issues which vie for immediate attention and resolution. A problem is especially urgent when a person of authority, i.e., owner, executive, or manager, perceives it as a cause for setbacks or threats to one’s operations or schedules.

The example of the truck with the dead battery is urgent as it threatens the schedule of the shipping manager’s operations. But what is the problem exactly? Is it the truck requiring immediate repairs or is it finding another way to deliver an order to a customer?

One should be careful before answering the above questions. On one hand, the problem is how the shipping manager could get the truck fixed and running. On the other hand, the problem is how to deliver the order to the company’s customer who expects it today. As the answer may seem obvious to some (delivering the order), other managers may perceive it otherwise (needing the truck to be fixed to avoid backlog in deliveries).

Urgency of a problem stems from the attention it seeks. Urgency, however, is not the same as importance. Importance depends on how a problem would affect performance towards meeting goals. A problem can be urgent but not necessarily important. And there are problems that are important but not necessarily urgent.

Then there is the degree of urgency. An urgent problem may be nothing more than a pressing matter, that is, one which could be resolved quickly, or it may be a full-blown crisis, one which causes or threatens catastrophe.

There are urgent problems, however, that could go far beyond the managers’ capabilities to solve. Such urgent problems would prompt managers to seek help. In the case of the broken-down truck at the shipping dock, if the shipping manager can’t get the truck fixed or couldn’t find another truck to deliver the customer’s order, the manager would be facing an urgent problem, escalating into a crisis. The urgent problem may no longer be about fixing the truck or finding another one; it may be about the lack of capacity to deliver pending orders. And if the urgent problem threatens the company’s topline sales target, then the manager may have gotten a crisis on his hands, in which he’d need help.

Managers turn to engineers to fix urgent problems in their systems & structures. Engineers, after all, are problem solvers by education and training. Hence, engineers are often observed overseeing complex repairs of equipment and recommending changes to designs of facilities or systems.

Managers, however, don’t usually turn to engineers when it comes to urgent problems in supply chains.

Several enterprises I had worked with were chronically in crisis stemming from similar scenarios as the example of the broken-down truck at the shipping dock. In many such cases, operations managers tried to solve the problems on their own. Most ‘successful’ solutions were nothing more than short-term remedies, in which the problems would re-emerge in the not too distant future. Others were downright failures, which led to outsourcing of the problematic operations or change of management, which brought higher expenses or losses to companies.

The common denominator in many chronic supply chain crises is that management does not turn to engineering expertise to solve their urgent problems.

Urgent problems, like all problems, could be best solved via a problem-solving methodology most engineers are adept at:

Define problem
Brainstorm solutions
Outline criteria for solution selection
Select solution
Develop roadmap or plan for selected solution
Develop detailed designs & plans for selected solution
Implement solution

Whereas managers could do the methodology too, engineers are better equipped with in-depth technical expertise they learn from school and experience.

Some managers may argue that their experiences are just as in-depth as engineers. The jobs of managers, however, are about managing resources to perform toward objectives. Engineers’ jobs are about solving problems. Managers may have some expertise, but they would not have the same focus as engineers. Each respective profession has different sides of experience due to the variance between their foci.

Managers may also say that there are too few, if any at all, engineers with problem-solving expertise in supply chains. The rejoinder to this is many managers are reluctant to admit the need for supply chain engineering which discourages interest to the field. And there is an engineering field that does address supply chain problems: it’s called Industrial Engineering.

Urgent problems are not-so-welcome staples in supply chains. They occur in varying degrees from pressing matters to full-blown crises. Because executives have yet to recognise the need for supply chain engineering to help address urgent problems, enterprises suffer chronic setbacks and face ongoing threats from the supply chains they operate in.

Supply chain engineers, like other engineers, apply a methodology to solve problems. Their in-depth education and experience which is unlike what managers are trained in give them the expertise to address urgent problems.

Find Ellery

Separating Facts from Inferences

When it comes to solving urgent problems, I use whatever information is already available. I don’t spend any more of my valuable time to gather or validate any more data. Time is of the essence. I’d like to remedy any adverse situation as fast as possible.

In some cases, the remedy does the job. But in not a few instances, they don’t. The problems re-emerge and some return more seriously than before.

My company’s sixteen (16) year old Toyota Fortuner SUV stalled one day on the road. The driver said it was likely the alternator had failed. The road-assistance technician who brought a new battery agreed after he tested the newly installed battery. The driver and technician suggested I ask a mechanic to repair the alternator.

I decided to stick with the new battery. The Toyota SUV broke down again the next evening again on the road. Fortunately, a roadside assistance team lent me a service battery to enable the driver to bring the SUV back home. The next day, I called the mechanic and he said not only was the alternator in need of repair but also the radiator’s water pump was nearing breakdown. I had the mechanic repair all of these and by next day, there were no more problems with the Toyota Fortuner.

Because I doubted the fact that the Toyota Fortuner’s alternator was not charging the battery, I lost more time and a little more money in repairs. It could have been worse. Were it not for the roadside assistance team’s willingness to lend a battery, the Toyota Fortuner would likely have been towed at greater expense.

A fact is information based on a real occurrence.

We tend to mix up fact with truth. Facts are based on observations. Truth is based on inferences, conclusions we make from facts.

For example:

Fact: the thermometer reads 32^º Centigrade.

Inference: It’s hot.

Fact: Your dashboard camera shows a vehicle bumping your car’s rear end.

Inference: Somebody just hit my car and it’s the other vehicle’s fault.

Fact: The new battery of my Toyota Fortuner shows no increase in electric charging from the alternator

Inference: The alternator isn’t working.

Inferences are what you see a lot in social media. People who post their inferences would declare them as truths. Commentators would agree or disagree, which would then lead to debates.

Some people end up doubting the inferences and questioning the facts. The trouble is, however, that often, we don’t read too many facts in social media posts. What we see instead are posts claiming to show facts when they are nothing more than inferences.

There are calls to regulate social media because some groups of people believe there is a proliferation of disinformation.

But what do they mean by disinformation? Is it the lack of or the twisting (falsifying) of facts? Is it about inferences not seemingly based on facts? Or is it that the opinions of some people incite vehement disagreement thereby leading to conflict?

The Internet connects people to abundant sources of information. Individuals can access data and harvest facts from the worldwide web. Individuals, however, draw conclusions from whatever data or facts they deem as enough to do so. People choose facts which would support their cases. Critics bring up facts which would contradict those cases. In many instances, individuals don’t bring out all the facts to infer what may really be closer to the truth.

An environmental activist may cite warming temperatures as bases for global warming. But a resident shivering from winter cold may doubt the activist’s claims. How could there be global warming when it’s cold where I am?

Both the activist and the resident should ideally lay out all the facts, distil them via analyses, before inferring whether there is global warming or not.

The trouble is many of us don’t do that. We choose what we want to see or hear and doubt whatever doesn’t agree with our beliefs.

And I am just as guilty for doubting facts and jumping to my own conclusions based on my beliefs or just plain stubbornness. And I paid for it with a near-miss disaster with my company’s Toyota Fortuner.

Find Ellery

Never Make the Boss Wait

A field sales manager was late in fetching his boss, the multinational corporation’s director of sales. Rumour had it that as a result of that snafu, the field sales manager was passed over from promotion and was eventually re-assigned to an obscure position at the logistics department. Some years later, the field sales manager resigned as his peers moved up the corporate ladder without him.

Field sales managers in the corporation tell new salespeople that they should never ever make the sales director wait. Whether it be picking up the executive at the airport or attending a meeting at the head office, sales managers have an unwritten rule in which they should never be late. Because if they ever were late, chances are those erring salespersons would be bypassed from promotion, their careers frozen for good.

There was no such rule in any of the corporation’s manuals about not being late to a meeting or an appointment with one’s superior. There is also no memo or letter stating such a measure. The ‘never should you make your boss wait’ is an unwritten rule, one shared only between salespeople and other employees in the sales department.

Yet, salespeople in the multinational corporation follow this rule and communicate it to others. They feared risking their careers if they did not comply.

It’s not enough for employees to just follow whatever the written rules are. They should also know and be familiar with the unwritten ones as well.

Find Ellery

It’s a…What Is It, anyway?

Subic Bay at Luzon island, the Philippines, is a former United States naval base. In its heyday from the 1950s to the 1970s, it was the Americans’ largest military facility in the Western Pacific.

Subic Bay served as a logistics hub and port for the US Navy. Together with the nearby Clark Air Base, Subic served as the Americans’ projection of military power in Southeast Asia.

In 1991, after the Mt. Pinatubo eruption, the Philippines and the United States did not renew the lease treaties of both Clark and Subic. In a matter of months, the Americans left and turned over ownership of the bases to the Philippine government.

The Philippines immediately declared Clark and Subic as ‘freeport zones,’ in which authorities granted tax incentives to firms doing business in the former bases. Factories and duty-free stores sprouted at Subic and Clark as a result.

Subic Bay, more than thirty (30) years later, had become a….what? One cannot figure out what Subic had become. The former naval base has a deepwater port which loads & unloads merchandise for export & import. It has companies, big & small, with manufacturing & logistics operations. It has shops selling duty-free products. It also has recreational places, such as a golf course, safari, an aquarium, scuba dive spots, a horseback-riding ranch, a rainforest, and a beach. There are also several hotels, residential condominiums, a yacht club, as well as private enclaves.

Subic had become a mix of so many things, such that one couldn’t figure out what it was. Was it an industrial free-trade zone? A duty-free shoppers’ paradise? An eco-tourism site? A very large resort?

And because it tried to be so many things, Subic had no one identity. It was like a person who had multiple personalities—no one knew which was real.

Subic didn’t draw crowds and instead had become a sparsely populated place. Business was mediocre at best. Locators who manufactured and did logistics there did not really expand. New investments year to year weren’t too much, nothing to boast much about.

Nearby Clark was a bit luckier. Thanks to its growing airport, people identified Clark as a viable alternative versus Manila for travel to and from Luzon island. Subic, however, remained almost anonymous as people were clueless about what the former naval base was or could be.

The lesson from Subic was that when one markets a place, one should develop an identity for it. One shouldn’t promote it as several things. Subic is a free industrial zone; it’s a duty-free shoppers’ locale; it’s an eco-tourism site; it’s a recreational area; it’s a private get-away-from-it-all residential place. When one says it’s all these, one gets the impression it’s trying hard and it becomes none of the above.

What is Subic? Time won’t tell. Only people who have stakes in it, if there are any, will.

Find Ellery

What is the Problem in the First Place?

I went to a branch of a local drugstore to buy a small bottle of mosquito repellent lotion. The branch didn’t have any stock but the nice lady behind the counter checked her computer and told me to go to another branch which was a short five (5) minute walk away. I went to the other branch and yes, there were small bottles of mosquito repellent lotions available. I picked up a bottle and then shopped for another item: shaving cream. There was no stock but the nice lady behind the counter of this drugstore branch said there were some available in the branch where I came from.

What’s the lesson I learned here? Buy all the available items you’re looking for before going to another store. Haha.

Why is it that some stores would have plenty of one product and none in another? It’s easy to pin blame on the manufacturer who sold the product. Maybe the sales representative was remiss in checking stock availability or the manufacturer’s logistics department hadn’t been delivering pending orders?

The large corporation that owns the drugstore has a central warehouse that receives products and distributes them to all its branches. Could it be that the drugstore corporation wasn’t efficient enough to stock all its branches with the complete line-up of products?

There’s also the possibility that a customer bought plenty of one (1) product at one drugstore branch and left none for the rest of the day. It’s what managers would call a spike in demand.

Some supply chain managers would recommend building up inventories at branches to avoid stock-outs. Inventories, however, come with a cost, in the form of cash tied up on unsold products on a drugstore’s shelves. Executives don’t like cash being tied up especially if it can be used elsewhere such as high-interest returning investments.

Information technology (IT) managers could suggest installing an integrated information system which would flag out-of-stock incidences to the drugstore’s logistics planners in real-time. Supply chain managers could swiftly deliver items using smaller trucks or even motorcycle couriers. Transportation expenses might rise though.

All these possibilities sound well and good, and many companies do apply the ideas above. But what was the problem in the first place?

If perhaps it were the owners of the mosquito repellent lotion company who noticed the lotion being out of stock at the drugstore branch, they maybe would throw a fit as they call the sales and the supply chain departments to investigate and restock the branch.

Executives & managers tend to fast-track solutions to issues without first defining what the problems are. But is there really a problem? Does the drugstore chronically run out of stock in its branches or was that stock-out of mosquito repellent solution a one-time event which doesn’t happen often? What products are always out-of-stock? How much is the drugstore losing from stock-outs?

And there perhaps lies the bigger question: how are stakeholders addressing their supply chain issues? When does an issue become a problem, and when does a problem become a crisis needing a lot of attention?

These are questions which could keep supply chain managers, if not executives, awake at night. Answers won’t come, however, by grabbing for solutions. They come after clarifying the problem.

When stakeholders know what the problem is, when it becomes clear what the root causes are, solving problems becomes more straightforward.

Find Ellery