Solving the Wrong Problem
Okay, this post is a bit outside the normal domain of this blog. It’s technically about “supply chain management,” which, as you might imagine, is not really the focus of my work or attention. But a brief article in HBR on the topic has been really bugging me. In the article, the authors complain (whine?) about the biggest problem in supply chain management:
And me, and my friends, and your sister…Basically, what really annoys supply chain management folks, apparently, is the fact that the consuming public does a bad job at managing inventory.
Yes! I know it’s outrageous, but at any given moment, the general public, on average is “out of stock” of 10% of what they normally purchase. Say it ain’t so! The tragedy, the authors note, is that by their estimates, consumer goods manufacturers in the UK alone are losing $9 billion per year “owing to the poor job consumers are doing in keeping their cupboards filled.”
Okay, is it just me, or is this logic a bit insane? Manufacturers “lose” money each year because we aren’t hyper-efficient enough to spend even MORE money per year on stuff? Since when is it truly a problem that I don’t have peanut butter in my house for two days?
Because the peanut butter market is saturated, the only way to make MORE money is to have us buy more than we really need. So they team up with refrigerator and trash can makers to make appliances that actually scan in what we buy and throw away and then remind us to buy more peanut butter two days ahead of time, lest we spend those two days eating our celery sticks plain (causing these “poor” companies to lose money). Great. I now will have to spend $200 on a trash can to avoid a problem I did not know I had in the first place!
I’m all for efficiency, but this doesn’t seem right to me.