Who is to blame for the hoverboard fires?
Thursday, February 04, 2016
How do we prepare our college students or even high school students for the real world? Our texts are full of theories of how a perfect process should work, such as in the making of a laptop computer or bridge.
But what about a situation like the hoverboard, the hot Christmas present of 2015? We've since learned the hoverboard's lithium battery has a tendency to burst into flame, burning people and property. Who is to blame for this product mistake?
That question is not a part of what the textbook on supply chains, manufacturing and logistics teaches in academic courses. At best, courses in reverse logistics outline what could be done to repair, return or recycle a damaged product.
Courses in the field of logistics and supply chain management extol the virtues and economics of cost effectiveness, cost efficiency and quality control — if everyone along the supply chain works together. We teach lessons in how to play nice in the sandbox of manufacturing. Much of what we teach is appropriate if the human factor works perfectly.
To make sure that happens, we teach how cross-functional teams along the life of a new product, from cradle to grave, are best served with collaborative efforts. Cross-functional teams pull ideas from team members for all parts of an organization, including engineering, finance, accounting, marketing and customers. But mistakes happen. Who is at fault?
Hoverboards, laptops or other products start as neat ideas that will make a profit for a company. But after that, a long and complex series of supply chains is set in motion. A product starts upstream where raw materials — such as liquids, metals and various chemicals — are harvested or purchased. Along the way, a manufacturer puts all the raw materials together, piece by piece. This is the beginning of the supply chain.
Even that is a myth. A supply chain is really not a linear chain at all. It is a metaphor for a supply network resembling a spider web or a complex network comprised of the flow of materials, information and dollars across many supply networks. The hoverboard can be a metaphor for how what we teach is not how we produce a perfect product.
Part of the process that catches any errors as any new product is born are the cross-functional teams, who work in what the industry calls value engineering and value analysis operations. The value engineering process is where we first convert that new idea into the reality of a product. After the product is made, we need to double-check it for many safety and cost factors.
That is where teams performing value analysis come into play. Their continuous feedback makes sure the product can be made at a reasonable cost and with the least expensive available parts. This value analysis process keeps expenses down so revenue can be made and profit can be realized. But safety is always in the mind of such quality control groups, engineers, supply managers and marketing teams.
Many of our logistics and supply chain textbooks describe how these teams are made of specialists, a single team devoted to a single mission. Such thinking is embedded in product design, product invention or product update activities.
While this line of thinking is what is taught in many engineering and economic classes, a new model has emerged over the last 10 years. I have witnessed some cross-discipline thinking emerging from companies such as Capital One and Amazon. I have friends in both places, and we have discussed what can be labeled as out-of-the-box thinking.
The subject matter experts in the building of a unique product seek out others from totally different disciplines and ask them to join a specialty team. The results have made money for these companies.
Such companies, for instance, tell the specialty team not to get too comfortable with the way they work and with the standard operating methods because they may change — in just a few days or weeks. And these organizations do that by bringing in people who have no stake in the product engineering at all.
Have you experienced or heard of such out-of-the-box thinking going on in your work, world or from others?
I read in the news recently about the manufacturing-to-retail businesses that are on the edge of failing, due to plunging oil and fuel prices. The number of major retail stores closing is growing, such as the recent store closures announced by Walmart, Sears and JC Penney. The shopping malls are in jeopardy of failing as well.
There are already cost reductions happening with many major retailers, or they think so. They are creating their own transportation company, for instance, instead of leasing out the job duties. Lots of companies will close this year and next year, due to other factors such as online shopping and the fuel crisis.
It is a supply chain crisis — from the first step upstream to the final purchase by you and me as customers downstream.
But will forming your own transport company instead of outsources really cut down on expenses? My experience says no; in discussions with former transportation company executives, their answer is no. But the low fuel prices in 2016 are creating start-up companies. If the fuel price goes up again as it suddenly did in 2008, this may not be the best cost alternative to outsourced transport.
The hoverboard fires are real, not some speculation from a text. So who gets fired? That is not usually discussed in classes on proper supply chain etiquette. When the CEO wants to fire someone to make an example, then should all of them be fired next Friday? Should they be told to pack up, get out and not expect a job reference? But would that be the reality in all companies? It depends. In some cases, the entire organization could eventually fail, and everyone loses.
From my experience in the commercial world, I would suspect the CEO would want one person or one team of people to be made the sacrificial scapegoat in order to put the fear of doing a better job for those still remaining with the company. The decision to terminate people or a group of people is not that difficult.
As you think about this, who would you blame? Do you blame everyone who had a hand in the product? Which one would you choose? The team member from value engineering or value analysis? Or whoever checks on the quality the last time to catch an error made by someone else?
Most likely that quality checks person or team will be in front of the CEO, trying to explain why they did not catch the now obvious mistake beforehand. So who would be that one person or team? Someone has to pay for everyone else's stupidity, greed, oversight, ego or the decision to purchase cheap materials to save on costs.
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