“Hoarding” is a common behavior with all people. When taken to an extreme is can be VERY costly to companies and organizations. Do you know how to see the difference between normal hoarding and that which is shackling or worse draining the life from your future or the future of your company or organization?
Hoarding is Costly
I was recently channel surfing and came upon the reruns of a show called “Hoarders” and almost immediately jumped to the next channel! Living a very “Zen-like” existence, it hurt my eyes and mind to watch something like that, so I chose a different channel. When individuals “hoard” it is usually a symptom of deeper issues. Some people are tagged as hoarders because they are physically unable to rid themselves of excess, while others are psychologically unable to release themselves from the excess. Whatever is hoarded, it is based in the inability, physical or mental, to release themselves of it. Thinking that companies and organizations have personalities themselves, my thoughts shifted to the potential impact that the “hoarding” behaviors may also be found within companies and organizations and cause harm on them as it does with individuals. I turned the TV off and began writing down my thoughts and here we are!
“Hoarding” in the context of my thoughts is excessive accumulation and retention of something (physical or virtual). Everyone hoards to some extent. Some people have been known to hoard toilet paper! Many people tend to overeat that which we enjoy, technically a subtle form of hoarding! When a hurricane threatens, people hoard food and fuel. Others may accumulate more data than necessary to decide. Some people have more paper clips than they will ever use, while others have pens and pencils. Records and files abound in storage. Some people have more shoes than they will ever wear. Have you ever thought that some people hoard time? I personally have many bicycles. The point is that we accumulate that which we believe that we need or cannot live without. When it becomes an interference to living, it becomes “hoarding”. Psychologists have many explanations for why this happens with individuals. Interestingly, these explanations run parallel to the reasons that companies and organizations hoard and subsequently have “Supply Chain” issues and challenges.
Hidden Hoards in the Supply Chain
Let us jump right into “hoarding” at a higher level. It is scary! As I had anticipated does exist and a company and organizational level.
Time Hoarding
Many of the explanations are based in some previous negative experience, meaning that the event posed a significant threat to wellbeing and the individual adjusted their behaviors in such a way to accumulate a “buffer” that would create a safety zone.
A great example comes from my personal experience. I was managing a process that delivered its daily work to a distribution carrier with a midnight deadline. My facility was, intentionally, located 2 miles from the distributor to maximize processing time. I was a new leader and had been in the position for only a few months when I decided to work the second shift to spend time with my second shift team.
Much to my surprise, at 9pm the facility shut down and the team loaded the truck and left. When they returned from their delivery, I asked them if the deadline had changed.
Their response was that the deadline was still midnight. They continued to explain that three years ago there was a terrible accident on the route between our facility, totally blocking the route and the center and they missed delivery. The former leader told them that she never wanted a missed deadline again. By the way, her bonus’ were based on meeting deadlines and not on the number of items processed. She swore, literally and figuratively, that if it happened, she would fire everyone. By the way, it cost the company a little less than $40 to miss that deadline. Yet the long-term impact to the facility had been losing 3 hours of processing time, every day, for three years costing nearly two million dollars. The threat of losing their jobs cause the team to “hoard” time! A safety buffer!
Data and Information Hoarding
My experience with data and information hoarding spanned many businesses. I have had analysts gather more information than necessary because they made poor conclusions and recommendations in the past. I have also had a Senior Vice President keep critical information to himself, in the event a costly analysis, that he endorsed, did not go in his favor. In this instance hoarding was a character or intent protection strategy. I have seen that this usually occurs in the mid to upper levels within an organization, but it can happen at any level.
Records and Files Hoarding
Retaining past information is often a legal requirement, but seldom is there a process in place for destroying stale records and files. If there is a policy in place, it is seldom routinely followed. With a little focus, I have been able to reduce storage areas by more than 50% and the associated costs. Most often records and files retention has a “just in case” justification. Even these need to be questioned. I have also found many situations in which data and information was stored in duplicate or triplicate in multiple areas, again costing organizations two to three times the amount that could have been spent.
Supply Chain is Bigger than Imagined
My point is that when one thinks of a supply chain the thoughts automatically go to incoming materials storage, in the warehouse or outgoing finished products in the distribution center. The fact of the matter is the supply chain is bigger than that and often the source of costs that drain a company or organization and threaten its survival. Let us look at some of the “supplies” within the chain that are overlooked:
People – There is often the tendency to overstaff an area because of the instability of inputs or demand.
Management – Often companies over-manage areas because of the incompetency of either those managed or management itself.
Data and information – We already discussed this
Equipment – Back-up systems are important, but one needs to question the frequency of use and the true cost of retention.
Materials – Beyond the production inputs, there is often an overage is support materials.
Time – It is normal human behavior to “work-fit”, which it to space their work out within the allotted time available. Often individuals create buffers, “just in case”.
Virtual Data Storage – Low cost, but often very costly.
This is not a complete list, but the common areas, that I have experienced, that subtly drained the P&L’s of many companies and organizations. For those who have the time to hunt for these hidden areas the return on their investment is worth it.
Attacking the Hidden Hoards
Our experts at the Continuous Improvement Institute (The Cii) can help you find those hidden hoarders and take your supply chain to new performance levels. They use a three-step methodology:
Identify – Assess the complete supply chain, comprehensively.
Assess – Determine the required levels and value to the organization, along with a prioritization of overage and underage.
Control – Develops a recommendation for addressing and controlling current and future supply chain challenges.
It pays to look deeper into your supply chain, it can be an asset when properly controlled and a huge detriment, when not! Supply chain analysis is part of the future of the “New Normal” and those who excel at it will be at the apex of their market. The Cii Team of Experts can help! Check us out at www.thecii.com .
Phillip C. Reinke,
Founder and President of The Continuous Improvement Institute.
After 30 years of successful organizational transformation from “ground up” and performance improvement in Fortune 100 companies such as General Electric, First Data Corporation, Western Union, BankOne/First of Chicago, National City Bank and Washington Post/Kaplan Higher Education, Phil set out to share his experience with a broader audience of companies that could not afford to fully deploy the highly demanded and much needed, Six Sigma culture.
Contact: (954) 839-8477 I phil@thecii.com