APICS is the premier professional association for supply chain management.

Consideration and Compromise

By John P. Collins, CFPIM, CSCP, and Eric P. Jack, PhD, CFPIM, CSCP | March/April 2014 | 24 | 2

The importance of achieving consensus

We supply chain and operations management people are expected to understand the nuances of lean production, inventory management, and sundry other concepts within our domain of expertise. Because many of us are deeply involved in continuous improvement activities, we also are supposed to be fairly adept at various quality and project management fundamentals.

A group of professionals coming to agreement on a problem is difficult; coming to agreement on a solution for that problem can be even more challenging. It’s no wonder that many companies struggle. Yet, with all the available knowledge—plus access to best practices—there really shouldn’t be so many issues left to resolve. Why are there still businesses with too much inventory? Why do organizations have inefficient and ineffective processes even now? Why are there companies with demand and capacity imbalances? Something is missing here.

Perhaps the answer is consensus—everyone coming together and seeing eye to eye on priorities and on a solution to an agreed-upon problem. Webster’s defines “consensus” as “the judgment arrived at by most of those concerned.” So, how does a company achieve this common judgment on what to do, how to do it, and why it needs to be done? And then, how does an organization reach consensus on who’s going to do it? What is the most effective way to reach consensus?

Let’s look at an example of a company that had this challenge. A manufacturer of highly engineered specialty products was losing market share to lower-price competitors that focused on just one portion of the market. As sales dwindled, the engineering staff members criticized the sales team’s ability to sell effectively. The marketing professionals felt the product was over-engineered. Salespeople believed the only way to regain market share was to cut prices. Accountants considered the margins already razor thin, and they couldn’t see a price cut as feasible. All of these employees thought the operational group was too slow at bringing down costs to a level where prices could be lowered without substantial reductions in profit margins. The operations professionals had been lobbying for some design reconfigurations and changes in materials that would facilitate faster and more consistent production with an improvement in yield. Clearly, consensus was nowhere to be found.

A not-so-happy ending

In spite of a clear and compelling threat, consensus was never reached, and the business failed. Everyone believed they were dead right in their own opinions; no one was willing to consider another viewpoint; so, ultimately, everyone suffered.

Does your company have difficulty coming to a consensus? Perhaps the real answer is that today’s businesses need genuine leaders who are truly dedicated to a unified purpose.

John P. Collins, CFPIM, CSCP, is president of Sustainable Solutions. He may be contacted at jcollins@ssi-spm.com.

Eric P. Jack, PhD, CFPIM, CSCP, is dean of the School of Business at the University of Alabama–Birmingham. He may be contacted at ejack@uab.edu.


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