Retail/Distribution

The concept seems simple enough. We are taught early on that mistakes will be made, but that what matters is what we learn from them. Simple enough, right? Well, as the saying goes, “Easier said than done.”

Product recalls in varying levels of severity happen every day, all with important lessons to be learned. Unfortunately, too often, companies overlook these key takeaways to satisfy the CFOs with more financially driven business models that can dictate daily operations and, consequently, place less emphasis on quality management. But in reality, companies that manufacture and distribute products to consumers with an emphasis on customer safety and health are also making operational efficiency and cost management top priorities by preventing expensive consumer-facing issues and rework. 

One of the most prominent cases of not learning from mistakes happened just this year with General Motors. People refer to the string of auto recalls as GM’s “Year of the Recall,” with the most recent recalls raising the total to more than 28 million automobiles, costing the company $2 billion. Imagine you’re GM’s recently appointed CEO, Mary Barra, who inherited this plight. You’re looking to establish your new vision, endear yourself to your employees and manage the needs of your investors and consumers, but instead have been greeted with the issues left behind by the previous regime.

Fortunately, Barra has taken this opportunity to do what she can to right the wrongs of those before her and focus the company’s resources on the innovations of tomorrow. There is no one-size-fits-all approach or solution to problems such as product recalls, but there are several factors that play significant roles in the success of a company, one of which is ensuring quality is a staple of doing business from the boardroom down. 

Building a Culture

First and foremost, it’s imperative to build and maintain a collaborative culture of quality that encourages and rewards employees for giving their best efforts, documenting their output and requesting peer and management reviews for all business activities. By encouraging such self-awareness, you’re giving employees the power and desire to drive tasks to completion using their existing knowledge and abilities. 

Alternatively, building such cognizance will motivate employees to recognize their own limitations and ask for help when needed. The ability to seek criticism and feedback from others will ensure that you overcome any biases, fill in skill gaps, drive down deliverable cycle times, drive up knowledge sharing, increase the overall quality of work and escalate productivity.

Secondly, by using quantifiable metrics to analyze your business across the supply chain, you can prevent competing agendas and compel management to locate the source of the problems. To ensure that those with authority are making the most objective decisions, it’s a good idea to weave in data-driven decision-making processes with the proper business context, knowledge, skills and diagnostic capabilities, which also can help managers act with the necessary confidence to carry out successful business operations. Ideally, by setting these concrete benchmarks, you also might prevent the pushing of ill-informed agendas or sloppy work, both of which can have long-term negative impacts on a business and its brands.

Next up is guaranteeing a mutual understanding and holding the appropriate people accountable. It’s vital for a company looking to improve quality across its supply chain to understand that risks can shift from department to department at all levels, and that transferring these risks should be done with caution, especially when put on the supplier. For instance, if a supplier is fighting to maintain profitable margins as a result of a cost transfer, then quality could be the first thing to be sacrificed. 

This may in turn create poor inputs into the manufacturing process and the problems could go undetected until it’s too late and the product is in the hands of the consumer. Once this happens, you go into “clean-up mode” and all preventative measures you may have taken up to this point will have been futile. 

the Bigger Picture

Accountability isn’t just important for decision-making, but is also needed for coaching, partnerships and problem-solving. One premise behind W. Edwards Deming’s philosophy is that people have an innate desire to succeed and give their best efforts, but to give 100 percent they need direction and the means to do so. It’s important that all employees view the organization as a team. This feeling of community instills trust, instead of employees walking on eggshells to please the boss.

It’s essential that every employee understand the risks, issues and merits of their decisions and the possible implications not only in the short-term, but their potential impact on the bigger picture. If you can achieve this company-wide understanding, you can help ensure these problems and risks are not unduly transferred across departments and that all employees are held accountable for the decisions they make and the risks they take.

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