Tuesday, January 03, 2006

Supply Chain Failures Under the Christmas Tree

First let me thank you for a successful 2005 as a continued reader...now back to the supply chain. In the final weeks of 2005 I checked one more port off my list - Miami. I spent the New Year in South Beach which is just a few miles from the Port of Miami. Security was thankfully tight, so I couldn't get too close, but it has significantly more capacity then the Port of Seattle/Tacoma.

Towards the end of 2005 I also witnessed a few supply chain failures on Christmas Day. My brother and went dutch on a snow blower for my dad. While the snow blower did arrive on time, December 23rd, it was missing the ignition key. So I phoned the retailer who promptly told me they were out of stock and suggested that I call the manufacturer. Waiting for only a few minutes the customer service rep was a little too friendly and admitted that I was the fifth customer in the last hour that complained to her about the keys missing. Knowing that this is a supply chain failure I asked to speak with someone more knowledgeable about the details. Apparently, the manufacturer shipped 500 snow blowers knowing that the keys were missing with the strategy that they would rather sell them without the keys instead of counting them in inventory at their warehouse. After explaining to him that their are several flaws in that strategy I requested for the keys to be shipped overnight, which they were at a cost of $12. So i wonder if the strategy included the $6000 if would cost to ship these keys to the 500 neglected customers, not to mention the huge hit to customer satisfaction? Failure indeed. The sad part is that I have read several articles on the supply chain expertise of this manufacturer in the trade press, so to witness this first hand was quite revealing.

The second failure was at my in-laws house while I installed a Wi-Fi network. The actual install was flawless (I highly recommend the Linksys products), but when it came to connecting the Ethernet wire to the PC the Ethernet card was so loose that I couldn't keep a strong connection. After searching the web it turns out that I wasn't the only one with this model with an ethernet problem. Eventually I had to make a trip to Staples and replaced the card, but these should be supply chain problems of ten years ago, not the supply chains of today. Let's see what awaits us in 2006.

1 comment:

Jennifer C. said...

I could add some of my own SC failures to your story! E.g. Overstock.com advertising a "by Christmas" guarantee on certain items, without having the ability to react when it is clear that their shipper was not going to be able to hold up their end of the bargain. (my beau's watch was stuck in the Phoenix, under "exception" status for a week! When it had been shipped 2day) All they could tell me was "well, we shipped it". And the shipper was much worse, "we'll call you back" and never doing so. There were reports of people standing outside the Phoenix DC for 5 hours trying to get their held up packages!!