The 2020 Mid-Year Economic Update_long

Operations Q&A: When Does 1 + 1 Equal More Than 2?

Try recalculating some of the mathematical problems in your business.
LeeSchwartz

Question:When Does 1 + 1 Equal More Than 2?

Answer:I recently attended a very fascinating seminar. It attempted to recast existing paradigms related to process improvement and teamwork. Toward the end of the fastest six hours I have spent in years, the presenter asked a series of questions, one of which was: Under What Condition Does 1 + 1 Equal 2?

Even when applying “new math,” the result of 1 + 1 always equals 2, right? But does it really? Armed with this new way of thinking, I am now leaning toward a contrarian opinion. Here is why.

I was engaged by a distribution company moving into a new location. Its stated goal was straightforward: Design the layout and help with the logistics of the move. During our preparation, I was told that they had more than 4,000 active SKUs. I initially took that at face value, but in short order I challenged them to confirm the number.

“Print an inventory value report,” I encouraged, “and then review to determine if, in fact, 4,000 is an accurate number.” Turns out it was not even close. The number was closer to 1,100. What an eye-opener to senior management. Knowing the “real” number put a lot of minds at ease as they looked ahead to the move.

In addition to achieving a painless move to the new location, the company also was able to tidy up its inventory data.

Bottom Line:Can you think of times when your efforts paid bigger dividends than originally anticipated? Probably happens more times than you realize. A distribution company that I worked with reduced the time it took them to cycle count by almost 40 percent. The time saved allowed them to reallocate labor resources. More people picking orders allowed them to ship more orders each day. In this case, they streamlined their cycle counting process while achieving the unintended benefit of increasing shipments each day.

While you may not set out to accomplish so much, do not set artificial limits either. Allow your actions to take you where they may and, in so doing, you might discover that 1 + 1 can result in something more than 2.

I welcome your commentsor questions at lee@schwartzpro.com.

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