Ellery's Essays

The Benefits of Management By Walking Around

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Some of us may remember Management by Walking Around. It was a buzz phrase from the 1980’s, credited to Hewlett-Packard executives and made popular from the book, In Search of Excellence, by Tom Peters and Robert Waterman.

Management by Walking Around (also known as Management by Wandering Around) or just MBWA for short, is essentially making time to roam around one’s facilities and talk to people who are on the frontlines of our businesses. We watch & talk with workers. We spot things that need immediate action. Or we just observe and update ourselves to what’s going on whether at the shop floor or within our own offices.

In our world where even though remote surveillance technology has become mainstream, MBWA is good advice for supply chain managers and more so for property managers & building superintendents.

I must admit I hadn’t done MBWA since I was a junior manufacturing operations manager at P&G in the 1980s. I decided to revive the idea as a property manager of my family’s business (45 years later!).

What inspired me at first to walk around wasn’t the needs of the business but the necessity of health. My doctor said I should move around more as I grew older. So, one early morning I decided to do a short walk around my family residence.

Being responsible for the maintenance of the place, I inspected the premises as I strolled. Little things I’ve never really noticed came to the fore. Tree branches needed pruning. An eave on the house’s corner required minor repair. The gardener was doing a good job keeping the yard clean and taking care of my mom’s orchids (we took his job too much for granted, it seemed).

I then started doing MBWA at the family’s warehouse compound a few kilometres away. I noticed more things than I would have otherwise as I wandered around the perimeter of the less-than-a-hectare storage facility. The outdoor passage from the fire exits was rocky, which could impede quick evacuation in case of an emergency. The fire exit doorknob didn’t look right; I should have it checked. Vegetation was growing and hanging over the wall toward our neighbours’ properties. A gate leading to the back of the warehouse had broken hinges and looked like it could collapse any minute. I also saw several blind spots in the warehouse’s closed-circuit television (CCTV) coverage which could be taken advantage of by nefarious characters.

I took several photos and asked the manager in charge to look at the “deviations’ himself and if necessary, schedule rectifications. Most would be done speedily and without much investment, but which if continued to be ignored could spell potentially unwelcome results in the future. It’s always better to be safe than sorry.

MBWA as a management routine waned at the turn of the 21^st century, as managers embraced performance measuring concepts such as the Balanced Scorecard and remote management (overseeing operations from afar by watching CCTV cameras streamed via the Internet). As businesses expanded globally, we found it more efficient and of course, more convenient to ask subordinates to set targets, report performance, and provide their action plans. And we did this via virtual conferences from our offices or homes, without having to travel to faraway locations.

Business, after all, had become more complicated as our portfolios and our scopes of oversight expanded, not to mention the baggage of additional regulations stemming from evolving political climates.

We have so much on our plates. We tie ourselves up conducting meetings and writing reports in the hope we’d find quick-fix resolutions or answers to whatever pressing problems. We had forgotten the value of information gleaned from the old-fashioned act of observation of what goes on in our workplaces.

On the bright side, many organisational leaders regularly practice MBWA.

The late Henry Sy Jr., founder of Philippine-based SM retail chain conglomerate, for instance, made it a point to visit at least one of his dozens of department stores once a week. Mr. Sy, with his adult children in tow, would examine the shoes at the footwear department, which was his initial business at the start of his entrepreneurial career.

I remember the Jesuit director of my school walking the corridors peeking and waving to the teachers and students in classrooms, every year of his long stint which covered my entire educational history from kindergarten to senior high.

There are some executives who do MBWA more for show, however. For example, a government official takes a one-time bus ride with his media entourage to demonstrate his empathy with the commuting public’s daily ordeal with traffic (and campaign for votes in a coming election).

MBWA encourages MBTP, Management by Talking with People. We meet people when we walk around and in so doing, we converse with them. A variation of MBTP is MBSUL, Management by Shutting Up & Listen, in which we hear people out rather than making speeches or sermons to subordinates. We don’t meet people on the frontlines to finger-point or find fault. We’re there to get their feedback, understand what’s happening, and fill in what we are missing in our day-to-day situational oversights.

Executives of global companies may find it difficult to do MBWA of facilities halfway around the world, but even if they could do it a once or few times a year, I think there would be some benefits in seeing what’s happening in person and having face-to-face conversations with the people they don’t see often.

MBWA is a simple concept, one that requires the investment of time. But if the results of spending that time consist of knowing what’s really going on and understanding what frontliners are experiencing, wouldn’t it be worth it?

About Ellery’s Essays

“Where’s My Order?”

“Where’s my order?” I heard the lady say to the server at the diner.

A family of four had been waiting for their food. Their appetizers and some entrees arrived but not all. The lady who was apparently the wife and mother of the family was impatient.

“Please cancel the order if you cannot serve the dish,” the mother firmly but politely said to the server.

“We’ll follow up,” the server replied.

Within a minute, another server arrived with the delayed dish.

I noticed that there were only two (2) servers and a busboy attendant (one who brought the food and cleared the tables after customers left) at the diner which was fully occupied with hungry patrons. The servers also did the billing and receiving of payments on top of taking orders and communicating them to the kitchen.

But the lady and her family could care less. What mattered was they got what they asked and will pay for.

It’s a scene repeated in many restaurants, in retail stores, and in other service firms as well. Customers make orders. Orders don’t get delivered. Customers threaten cancellation. Establishment is understaffed.

Customers don’t notice or care if service firms have enough people or capacity to take and serve orders. It’s not their problem. They assume that because service providers are open for business and selling to make money, they deserve the products & services as they demand them.

The last thing you want is for your customers to forward their frustrations such as in posting negative social media stories and even legal actions. Yet, many business owners hesitate to add capacity or hire more staff to ensure better customer services.

Why do business owners not spend more to hire people or invest more in improving services?

Because they’re afraid the costs would diminish profits. They fear that they won’t get any more added revenue. Would the diner earn more money with more staff if the dining seating capacity remains the same? The diner owner wouldn’t know for sure.

What’s certain, however, is if the diner doesn’t serve its customers to the level they expect, they are more likely to not come back. Patrons would post or feedback by word-of-mouth that the diner’s service is not up to par. This would constitute a threat to sales.

The owners of the diner would frown if they hired extra staff only to see them busy only during mealtimes and not in between. Many business owners don’t, after all, want to pay people who wouldn’t be working all the time.

The diner’s owners would also prefer not to prepare pre-cooked food in advance in which although such could be served immediately, would risk of being thrown away customers don’t order all of them. You don’t want to produce too much that would just end up in the trash can.

Serving customers is what enterprise owners pursue in the basic course of doing business. Rather than dwell on the uncertainty of whether we’ll make more money by improving customer service, we should not cut costs knowing the certainty that customers won’t be happy with our services.

Running a business that sells and deliver products is complicated. It gets more challenging when the products we sell rely on raw & packaging materials we’d need to buy, on manufacturing operations to convert & pack the materials into saleable items, and on a logistics network to convey them to customers who could be next-door or half a world away.

We’ll never be 100% certain about procuring, making, and delivering the merchandise we need. Supply chains are far from perfect and just about everyone has experienced failures such as out-of-stock, off-quality items, and tardy deliveries.

But it doesn’t mean we can’t do something. Upping service by boosting productivity has a better chance of counting for something. If the diner’s owner invested to ensure customers come out happy instead of disappointed, it would boost, if not at least maintain, the diner’s reputation as a place worth eating at.

Maybe we won’t reap an immediate tangible gain by spending more for service, but we’d earn a prospectively positive reputation to customers. And isn’t reputation just as much a priority than simply making a profit?

About Ellery’s Essays

Pursuing Productivity Amid Adversity

The year 2025 arrived and what many businesses dreaded came true. Newly inaugurated American President Donald Trump and his economic hawks swooped and threw global trade into turmoil.

Arguing unfair trade practices from many nations, President Trump imposed tariffs on billions of dollars of imports from Canada, Mexico, China, and the European Union (EU), with threats of more to come.

A lot more probably would happen in 2025 and beyond, but the crux of the matter is that adversities, not just from disruptive American economic policies, shall continue to challenge supply chains.

So-called industry leaders repeatedly preach resilience and cost optimisation. Some strongly advised renegotiation of supply contracts.

Some know-it-all self-proclaimed supply chain gurus say that enterprises should shift to importing ingredients & components instead of bringing in finished or fully assembled products in which the latter are charged higher duties. Others say vendors, enterprises, and customers should just share the costs from new tariffs.

All these knee-jerk messages have something in common: they’re no different from the ones we heard before (such as from the height of the CoVID-19 global pandemic to the Russian-Ukraine war) when supply chains virtually shut down due to lockdowns and border closures.

Many chief executive officers (CEOs) tell their operations managers to fix and improve supply chains without a clue whether it will make an impact or not (in most cast, they don’t). They look for quick solutions without first understanding and accepting what supply chains are.

And what indeed are supply chains?

Supply chains are made up of relationships. They’re not ecosystems. They’re not information networks. They’re not limited to just the procurement & logistics operations within enterprises.

Supply chains start from the very resources we mine or harvest. From there, materials and merchandise flow through various processes such as conversion, transportation, and storage & handling before we sell them as products finally served, used, or consumed.

Every supply chain is unique. Not one is identical to the other although some share or overlap their activities with others.

We manage both the internal operations of our enterprises and relationships we have with our partners (i.e., vendors, service providers, and customers) for the purpose of making our supply chains productive. Because we share similar priorities between us as stakeholders and our partners, we strive to perform up to or above par to achieve our aims. Productivity is the overall virtue we work and measure ourselves in supply chain performance.

Every supply chain, however, is subject to risk and adversity. It is because of risk and adversity we put a lot of attention on our supply chains. We have learned that many things could and do go wrong with supply chains. We suffered losses, wasted resources, and lost opportunities because adversities affected our supply chains’ productivities.

We made and continue to make mistakes in how we manage our supply chains. We don’t realise that we shouldn’t only be managing supply chains but rather, engineering them. And we don’t realise that the goal we should look for in improving them is productivity.

Whatever strategy we undertake to improve supply chain productivity would likely not be easy, however. Supply chains are broad and go beyond our businesses’ borders and we’d need to work together with our partners (vendors, customers, service providers). We cannot solve supply chain problems just by managing our businesses’ operations.

In taking on supply chain challenges, we also need to accept that we should not see ourselves as dominant protagonists. We are no more than peers or equals with the vendors and customers we do business with. (We can try just as Walmart does with its vendors, but sometimes it does not come out beneficially: Chinese officials repudiated Walmart executives for hinting vendors should lower prices to mitigate the impact from US tariffs).

Whereas we measure our operations’ performances differently than others, we can gauge the common thread of productivity running to and from between enterprises.

Productivity encompasses key elements such as quality, cost, and reliability. We can index productivity via measures like these or simply monitor and act on each individually. How we work together with our partners and perform towards improving these measures will define our productivity progress.

Supply chains are subject to relentless adversities. We have been on the defensive combating them as we make the same mistakes in thinking we can just manage supply chains instead of engineering them for productivity improvement.

Productivity is the common aim of organisations along the supply chain. When we pursue it, when we focus on it, when we and our partners collaborate towards it, we can overcome adversity and mitigate risks.

About Ellery’s Essays

The Benefits & Pitfalls of Commodities Trading

A commodity trader at a food company observed that prices of coconut oil, an ingredient in most of the company’s products, was forecast to trend higher. He, therefore, ordered more than two (2) months’ supply of coconut oil, buying from several vendors who offered the lowest prices.

When the coconut oil price indeed increased days later, he boasted to his boss that he saved the company hundreds of thousands of dollars.

The company fired the commodity trader. The boss told the trader that he violated policy, which was the company does not speculate in the buying of ingredients. The company buys based on the demand of its products, not based on the prices of commodities.

The profession of commodities trading is about buying and selling items that are considered indistinguishable from wherever they are from. Agricultural items like seeds & oils (e.g., soybeans, palm, coconut) and metals (e.g., gold, silver, nickel, iron) are examples.

Commodities traders either work independently or work for companies who seek and buy ingredients or raw materials for their products. Their aim is simply to buy items at the cheapest price and profit from them whether they sell them to other buyers or they are converted and sold as finished products.

Companies like the food company do not like to speculate with commodities, even though many traders do it. The rationale is speculation is a two-way street: sometimes one wins big; sometimes one loses a lot. Prices may look like they’re increasing but then they fall, bringing about losses. But the prices may also go down and traders would save money for their companies who buy based on demand.

Supply chain managers also frown on commodities speculation. Delaying purchases may save money by prospective lower prices but could cause shortages downstream to the manufacturing departments who need them and result in unavailable products for customers. Buying more before price increases could build inventories beyond storage capacities or risk obsolescence or degradation over time. Supply chain managers don’t like out-of-stock or having too much in storage. Supply chain managers prefer steady-stream flow pulled by demand from users. Hence, speculation is a bad word. Buying based on need sounds better.

There are therefore benefits as well as pitfalls in commodities trading. Enterprises learned this the hard way when the CoVID-19 pandemic hit in 2020. Almost overnight, businesses suddenly could not receive inbound raw materials from international sources due to quarantines and lockdowns. Shortages occurred from factory floors to supermarket shelves. During and after the pandemic, some companies relaxed their rules against speculation; some have made it a practice to buy based on seasonal and global current events.

Experienced commodities traders don’t just look at price when it comes to buying and selling items. They look at the big pictures behind the commodities. What’s the harvest of cocoa have been like in Africa? What’s the story of some governments aiming to invest in mining of rare earths in the Pacific Ocean? Has China been dropping prices of steel to reduce inventories?

Supply chain management shares the thinking of wise commodities traders that one should be familiar what’s going on behind the scenes other than being experts in one’s internal operations.

Commodities traders also don’t treat their vendors as adversaries. Rather, they see them as alter egos to negotiate with. Negotiation is the key job of commodities traders and good negotiators aim for the ideal of win-win outcomes. As much as commodities traders don’t form friendships with vendors; they don’t try to make them enemies as well.

Commodities trading is an inherent function in many businesses. There are pitfalls and benefits to the job and there are costs and rewards depending on how we work with them in our supply chains.

About Ellery’s Essays

Fast-Food Doesn’t Mean Available

Late one Sunday morning, while driving, I had a craving for an extra-long chicken sandwich from my favourite fast-food restaurant. I stopped by the restaurant’s nearest fast-food drive-thru only to hear the lady’s voice from the box say the sandwich is out of stock.

When calling the hotline of another fast-food restaurant close to 12 noon on another day, the order-taker on the other end of the phone said that the order will take one hour to serve. All the motorcycle delivery people were busy. The same message was repeated at other fast-food places I called.

Fast-food restaurants are famous for being quick whether it be in serving food at the store or when delivering door-to-door. They are infamous, however, for having no stock of one’s favourite item and turning away customers at peak hours. Fast-food companies never seem to have enough food or delivery people to serve customers.

It’s a complicated tangle of not having enough capacity, supply, and delivery capabilities at the right moment.

Fast-food giants release tons of advertising about how good their products are and how convenient it is to order via mobile apps and the web. They continue to set up more branches and attract more customers.

Fast food’s market reach had spread far and wide and had made it an obligation for their commissaries to produce and deliver to more places than they have ever served.

Fast-food chains keep inventories to a bare minimum for the obvious fact that their items have very short shelf lives. Delivering to meet demand versus ensuring little or zero inventories at the end of the day at all locations is a constant challenge for commissary planners.

We can’t really fault commissaries for falling short as demand continues to grow. We can’t blame branches for not being able to deliver as orders outpace their capacities.

But meanwhile, as I resigned that Sunday to not getting the sandwich I want, I just settled to eat lunch at home.

About Ellery’s Essays

Missing in Supply Chains: Productivity

If there’s one thing I find missing in every business news story I’ve read, it’s: productivity.

If there is an article about productivity, it usually is in the context of labour efficiency or how much output workers churn out over a given period. Some media writers define productivity as to how many tasks we complete versus what we plan in a day.

These definitions are well and fine but unfortunately, they distract us from productivity’s higher meaning.

Productivity builds from efficiency in which it is not only how much is produced over a given time but also how much is delivered and progressed towards strategic objectives in ratio to resources spent and assets utilised.

Efficiency is:

Output / Input (or Capacity)

Productivity is:

Actual Output / Target Output / Input of Resources

Most business firms don’t have productivity measures pertaining to the above, if they have any at all. Instead, many businesses opt to measure efficiency or just plain output over a given time. They balance this by monitoring cost although as a separate indicator.

This is understandable as measuring productivity in relation to used-up resources is more complicated than just calculating output or cost. We’d rather like to keep things simple, after all.

Productivity, however, is more than just a measure. It is an attribute or characteristic that our business organisations we should strive for, even more than quality and value.

Productivity encompasses how well we progress toward our goals given what we value; it’s not just how much we make versus what we put in and for how long. Hence, it covers aspects such as quality (how good our products & services are), net worth (the financial value of our enterprise net of costs & liabilities), sustainability (the conservation & utilisation of resources), agility (velocity of accomplishing goals), versatility (flexibility & responsiveness to change with the times), and resilience (how well we address adversities).

In short, productivity should be the core of our mission in how we do things and we should aspire for it particularly when it comes to our operations, or more specifically, our supply chain relationships.

Supply chains are the operating relationships within and between our enterprises. Productivity is what we aim for in our supply chains. Because when our supply chains are productive, chances are our enterprises are also optimally productive, as we keep pace with our partners to make it so.

Every client firm I’ve worked with had unique problems with their supply chain operations.

Examples:

Inventory was too high.
Customer orders weren’t being served; if they were, they’re often too late or incomplete.
Some items were always out of stock.
There was costly waste in materials, operating hours, off-quality products, and rework.
Machine capacities were not fully utilised.
Scheduling was haphazard.
Customers were rejecting and returning too many items.

Often, these problems led me to an underlying issue: the supply chain operations of the client firms were simply unproductive. Not only in the sense that the enterprises’ operations were lacking in capacities in manufacturing, were not performing up to par in their distribution networks, proper policies & procedures were absent, or there was poor planning or coordination between functions (e.g., purchasing, production, logistics). But also, in that the firms had very little in the way of systematic and structural relationships with their partners, i.e., vendors, customers, & service providers.

A medium-sized printing press company was purchasing cardboard paper of various specifications from three (3) vendors. The company’s buying department had pre-allocated business to the three (3) vendors, giving 50% to the first, 30% to the second, and 20% to the third. When the printing press’s production department requisitioned any needed carboard, the buying department will order from the three (3) vendors based on the preset allocations.

If the first vendor failed to deliver the ordered quantity at the specified time & quantity, the buying department would revise upward its orders from the second and third vendors. Sometimes the buying department will cancel the order from the first vendor if the second and third vendors deliver completely and on time.

But none of the vendors ever delivered completely and on time. This was because the printing press company’s buying department always gave not more than one to three days for the vendors to deliver. At best, each vendor delivered partial quantities, never mind if they had to scramble their schedules to produce and dispatch the printing press company’s orders.

One can imagine the exasperation of the three (3) vendors. Because the deadlines were tight, and there was uncertainty in how much order quantities would be changed if not altogether cancelled, the three (3) vendors would build in extra charges into their quoted prices.

The printing press company would complain about the ‘high’ prices and eventually seek new vendors who often at first would offer lower prices at least until they experience the same exasperation from the demanding printing press’s buying orders.

Productivity was far from perfect for the printing press company and its vendors. And it was likely that the printing press company’s delivery productivity to its customers was not that great either. Indeed, the printing press company was often adjusting its production schedules given the uncertainty of whether the cardboard paper it needed would arrive or not. Its customers would complain about unserved orders and late deliveries, to the extent that customers would revise quantities downward, if not cancel orders altogether.

It’s no surprise then that the printing press company would encounter complaints like what we see in the list above.

Many businesses like the printing press spend time trying to fix their internal systems and structures without looking at the big picture of their supply chains. As much as the printing press can make its operations more visible (e.g., putting up performance measures), more methodical (e.g., writing detailed policies & procedures), and more participative & coordinative (e.g., implementing a sales & operations planning system), the company could only go so far in reaping benefits. If vendors and customers aren’t in the loop and working with our enterprises, we would never improve our and our partners’ supply chain’s productivity, no matter how much we invest in our own operations.

Productivity is not efficiency, and it isn’t just a performance measure. It is an attribute or a characteristic we aim for not only in our internal operations but also in our supply chain partnerships with vendors and customers.

Many of the complaints we have about our operations are rooted in issues with the productivity of the systems and structures that underlie our operations and our supply chain relationships.

When we take the initiative to fix our operations in the context of improving the productivities of our supply chains, we will be making big strides toward breakthrough improvements.

About Ellery’s Essays

Five (5) Lessons from an Elevator Story

A high-rise building (let’s call it Building A) has been fixing its nine (9) elevators for the last twelve (12) years. Several times an elevator would fail, and passengers would get stuck, causing trauma and panic. Fortunately, the building’s security quickly rescued trapped passengers and suspended access to the dysfunctional elevators. But for the building’s owners, elevator reliability was a big problem.

The building management had resorted to buying and stocking spare parts but it didn’t alleviate the elevator problem. Management could not predict the next breakdown and parts on stock would never be enough. Management resorted to quick fixes to keep elevators running but breakdowns still happened.

In another building (call it Building B), the building’s management had just replaced two of its three elevators. The management was in the process of replacing the third.

The Building B’s management was replacing every part and electronic component of all its elevators. Except for the chassis and cab, Building B’s management was changing everything.

Building B’s two (2) newly replaced elevators were running like brand new. Both elevators ran smoothly and reliably without a hitch. The total cost of the replacements amounted to about 30% of what Building A spent per elevator.

What did the Building B’s management do better?

1. Building B had a clear, concise goal

Building B’s owners via its board of trustees defined what they wanted. They wanted the elevators to work with minimal disruption. The choice of words was important. For so long, Building B’s management was preoccupied in reacting quickly to elevator breakdowns or failures and at least cost. The tactic was to have frequent inspections and keep stock of spare parts. But that wasn’t consistent with what the owners wanted. The owners wanted minimal disruption. It wasn’t about controlling the cost of maintenance or reacting fast to elevator breakdowns. It was about making sure the elevators were always available to the building’s occupants and reliably delivering them to their destination floors.

Building A’s management on the other hand continued to focus on just buying parts and nagging the contractor to respond to breakdowns more quickly. It was more of reaction than action with a tactic of repairing only when needed.

2. Building B had a clear strategy

With that goal clearly set, Building B’s owners and management moved to replace all the elevators’ components except for its chassis and doors. Every moving part, wire, cable, and electronic component would be replaced. Broken or not broken, worn or not worn, every item would be changed. The owners and management figured that changing every item would make the elevators virtually brand new and less likely to break down every few years. Changing everything also would open the building management to consider other elevator brands and newer models.

This was a problem with Building A: the management and ownership refused to consider alternative brand models for the elevators.

3. Building B developed a clear and complete Terms of Reference (TOR)

Building B’s management drafted specifications and criteria, otherwise known as the Terms of Reference or TOR to carry out the elevator replacement strategy. The management and ownership rewrote draft after draft until there was unanimous consensus on the specifics and language of the TOR. The TOR documents in detail what the building ownership clearly wanted as the endpoint of their strategy.

Building A had no such TOR and never did make one.

4. Building B led a transparent bidding process

Building B’s management invited contractors to bid for the elevator replacement project. Contractors submitted not only their prices but also their detailed schedules and scopes of work. The building management provided guidelines and templates for bidders to ensure uniformity. The management would reconcile the bids with the TOR and compared their quoted terms & conditions against the respective TOR’s provision.

The first building did not have any formal guidelines for bidding and because management and ownership wanted to stick with an existing contractor, there wasn’t any bidding.

5. Building B monitored performance and made corrections

Despite the objective, strategy, and TOR, the replacement of the first elevator at Building B did not go smoothly. The contractor collected the down-payment but did not deliver the parts on schedule. Installation was delayed. When installation was finally underway, the contractor saw design conflicts with the power system, elevator’s closed-circuit television cables, and fire protection system. Completion was delayed but the contractor and the building management resolved issues.

To avoid delay in the replacement of the second elevator, Building B’s ownership agreed to pay immediately the corresponding down-payment even as finishing touches were ongoing for the first elevator. But the building management amended the contract to penalize the contractor if there would be delays in the deliveries of parts.

The replacement of the second elevator went much faster given what was learned from the experience with the first. The replacement of the third went just as smoothly.

At Building A, the contractor didn’t provide timelines or formal reports when repairs were done. Most communications were informal and undocumented. Building management forwarded purchase orders and checked disbursement requests without supporting documentation. This caused excessive spending without really reaping quality work.

The key word to Building B’s successful replacement of its elevators was ‘clear.’ A clear goal. A clear strategy. A clear TOR. A clear response validated by performance.

When problems are well defined and solutions are clear, getting results becomes straightforward.

About Ellery’s Essays

Four Remedies to Mitigate Bias

https://en.wikipedia.org/wiki/File:Manila_Korea_Town,_Malate,_Manila.jpg

I won’t lease an office to a Korean. Every Korean I did business with didn’t pay the rent on time.

Many golf country clubs in the Philippines won’t accept Korean golfers as members. This is because Koreans don’t follow proper etiquette at the golf courses. They shout at other people, don’t wait their turns, and are rude to caddies and attendants.

My and other people’s prejudices against all Koreans are not justifiable, of course. We should not, after all, generalise our bad experiences with some Koreans to judge the entire nation of Korea. Being biased against Koreans or towards any individual or group is wrong.

South Korea is a developed country renowned for its cutting-edge technologies and successful industries. Koreans have shown world-class talent in the arts, reaping admiration from audiences around the world. They have one of the best disciplined and well-equipped militaries in the world as they continuously face threats from their neighbour, North Korea.

We buy many Korean items such as smartphones, appliances, cars, and health & beauty aids. Many of us eat at Korean restaurants. Many of us visit Korea as tourists. It, therefore, is quite unfair when we discriminate against Koreans and patronise their products and their country at the same time.

We should not judge individuals or groups based on our past experiences with them. It’s not right though it may seem logical for a few of us.

As much as some Koreans may exhibit unappealing behaviour, it doesn’t mean all of them are like that.

Despite the progress our society has made in stamping out discrimination, we all are guilty of having biases.

I avoid Koreans in my day-to-day business. As much as I know it’s downright wrong, my biases kick in as I recall bad experiences with these ethnic groups.

It’s not enough we show a respectful face when we encounter people we have negative biases toward. Directors at a posh golf country club politely denying membership to Koreans is still discrimination.

It’s even worse, hypocritically, when we visit Korea and enjoy the country and then come back to Manila and resume our biases toward Koreans. We don’t realise that the Koreans aren’t the bad people; we are.

Our biases stifle opportunities to have winning relationships with individuals or groups. Biases are bad for business.

What can we do to set aside our biases?

Treat every person we meet as an individual who has unique traits, not one that we automatically conclude as a representative of a group.
Seek to understand. Empathy takes effort and likely more so with dealing with individuals who are culturally different from us.
Welcome the differences as who knows what insights we could gain. We can learn from the talents & acumens of Koreans. How do Koreans succeed in the arts? How do they grow their business from small businesses to global conglomerates? We could only find out when we open up to relationships with them.
But we shouldn’t don’t surrender our principles in the process. We shouldn’t let our guard down as we empathise and welcome differences. Some Koreans are successful because they are assertive and persuasive. We should be ready to assert our own principles as much as we become open to what Koreans or any ethnic group can contribute in our negotiations with them. Collaboration is a two-way street after all.

Biases are bad. But these four (4) remedies may do the trick in not only mitigating our prejudices but also in keeping our doors open for opportunities, especially with individuals who could offer insights we never knew existed.

About Ellery’s Essays

If You Can’t Stand the Heat, Get Out of the Kitchen

I went to a lunch with former high schoolmates I’ve not seen in years. Most of us were glad to see each other. One of my schoolmates, an esteemed cardiologist, however, didn’t want to make conversation with me; he seemed to prefer to talk to other schoolmates who were either medical doctors or scientists with Ph.D.’s, or in other words, people who he saw as peers, not someone who wasn’t in their class.

This Photo by Unknown Author is licensed under CC BY-NC

In another case, a fellow member of an office building board of trustees I was also a member of thanked me via an online text for the tikoy (rice cake) I sent him during Chinese New Year. He texted that the tikoy was a blessing in his otherwise slew of personal challenges he was facing. I responded with a cheerful emoji . He texted back saying his problems were not funny. I replied saying he shouldn’t be so serious. He didn’t answer back.

There are some people who are plainly different in how they see and treat others. We shouldn’t judge them.

Maybe my doctor classmate was hungry, and he just wanted to eat than talk at the time.

The senior board member may just had been grumpy at the time.

Still, we shouldn’t be impolite or rude or worse, disrespectful. The doctor could have just said he’d like to eat and maybe talk later. The board member could have been more tactful in his text.

Maybe I’m not a person who deserves more respect than others who have higher stature. But then, I long ago had stuck to a policy where I take what others think with a grain of salt.

We live in a world where many people really don’t care about their fellow men or women. It’s understandable given the busy demands we face at work and at home. We have already too much on our plates and spending time caring about the welfares of others would be an additional burden we could ill afford.

Still, we should not be disrespectful. And we shouldn’t dislike people who show disrespect. Instead, we should just shrug our shoulders and move on.

If we work in jobs or reside in homes where we can’t get along with superiors or relatives, we should either just learn to live with these people or move out. It’s a matter of how much disrespect we can take.

As the saying goes: “if you can’t stand the heat, get out of the kitchen.”

About Ellery’s Essays

What Do We Do with ‘Bad Orders?’

One of the most irritating things in supply chain management is handling returned items from customers. We spend plenty of our precious time & resources trying to get rid of them.

https://www.waste360.com/industry-insights/returned-merchandise-stockpiles-as-waste-one-company-s-solution

‘Bad orders’ or BO for short are otherwise known as unsaleable merchandise or trade returns. BO is a commonplace term in the consumer goods industry in which retailers return millions of dollars of products to their suppliers.

BO isn’t limited to consumer goods, however. Businesses in other industries face trade returns as well. Customers return pharmaceuticals, toys, tools, and even cars.

Reasons customers return products are varied and many; some of which include:

Damaged items
Wrong items delivered
Customer has no space
Delivery arrived too late (or too early)
Expired product
Obsolete product
Customer can’t pay

Businesses try to impose policies on trade returns. In most cases, they don’t work. This is because many customers will not agree to them. Customers don’t want to keep trade returns; they want to get rid of them and get their money back from the suppliers who sold the items to them.

A large consumer goods multinational, for example, told its wholesaler customers that it won’t accept trade returns. The multinational firm told wholesalers it would neither retrieve unsaleable products nor transact refunds for them. Wholesalers, in turn, told their downstream retail customers they also won’t accept returns. The retailers responded by switching their purchases to the multinational’s distributors, and then telling the distributors to retrieve their unsaleable merchandise when they delivered orders. The distributors had no option but to get the items, otherwise they won’t be paid. The distributors then brought back the items to the multinational who found itself back to square one with BO’s it doesn’t want.

Supply chain managers label the retrieval and handling of trade returns as reverse logistics. It involves setting up systems & structures to retrieve, re-process, and/or dispose of returned items. As in every organisation, managers need to justify the viability of such systems & structures. The challenge is how to convince executives to invest in such operations, which add expenses to already losses in sales.

The ideal solution in managing BO’s is to prevent them in the first place. But because, as mentioned earlier, there are multiple root causes for BO’s, reaching a no BO scenario would take time and a lot of work.

But we aren’t alone in our endeavour to eliminate BO’s or trade returns.

The trade returns problem is a supply chain issue. Our suppliers & customers just as much have a stake in solving the problem as our businesses do. We, therefore, should work with our suppliers & customers if we are to reduce trade returns.

We can set up a reverse logistics system in partnership with our customers & suppliers. An initial purpose of such a system would be to retrieve unsaleable items as soon as the customers ask. Likewise, our suppliers would do the same in taking way unsaleable materials when we request them to do so. We would negotiate both with our suppliers & partners on how to account for the unsaleable items retrieved and the amounts to be refunded. We would need to negotiate on the value of items to be refunded given the costs we and our suppliers & customers incur in the processing (e.g., disposal, storage, salvage) of said items.

As we gain experience with our reverse logistics system, we together with our suppliers & customers can identify root causes and work to address them. We can work, for instance, on repackaging goods to avoid damages in handling or reformulating materials to lengthen shelf lives.

Bad orders, unsaleable merchandise, or trade returns are pains for all supply chain operations managers. We don’t like them; we want to get rid of them as soon as we could at least expense.

We try to manage trade returns via setting up reverse logistics systems & structures. Seldom, however, has such systems & structures been successful in stemming BO’s given the myriad of root causes for trade returns.

The reason reverse logistics systems fail is because we try to impose them on our suppliers & customers. Trade returns is a supply chain problem. It requires we working together with our suppliers & customers to solve it.

We can, therefore, get underway with a reverse logistics system in which we set it up together with our suppliers & customers. We can plan to have an efficient system that not only gets rid of items from our operations but also have one where we identify and address root causes.

The underlying principle in working with our suppliers & customers is mutual benefit. When we and our partners, i.e., our suppliers & customers, adopt it, we will have made headway in minimising the scourge of bad orders.

About Ellery’s Essays