The 50% Logistics Problem
Every two years, during the last 10 years, said Dan Gilmore, editor of the magazine supply chain in the U.S. Picks, a series of articles that “50% of the problems.” When Dan described the 50% problem as follows: Companies (and individuals) constantly, in fact, often dramatically overestimate their performance in the supply chain. Although statistically, by definition, half of all businesses have fewer than 50% of capacity in a particular area, ask a group of companies, where they are, almost inevitably, to which almost all of them are better than their peers. In general, in my experience, I think a large percentage of companies that are in the top quartile (25%) or quintiles (20%), supply chain performance.
But 75 or 80 percent of them are wrong, according to Gilmore.
As expected, Dan gets a lot of relief when writing on this subject! The arguments something like:
- A general opposition to the observation, just because some people do not like the consequences, I do not speak;
- The difference between the top and bottom is very low, so that makes it seem everyone is on the top and
- Of course everyone thinks they are doing an excellent job, what do you expect?
Well, by definition, should half of all businesses in the lower part of the service, can be independent of the standard deviation and metrics. (And, as expected, in each comparison study, a normal distribution among the leaders and laggards). In fact, there are big differences in performance between leaders and laggards in every benchmark. I’m interested in this topic because in my 15 years as a consultant, I created a similar opinion about this tendency to exaggerate the power when it comes to the supply chain. So when I read Dan Gilmore room confirmed my own experience.
I understand that “every person is different and it is normal to be satisfied with the performance” in the bottom half. It is likely that this is the result that best done with the resources and problems. But it is easy, the situation with maximum efficiency so that most of us think about it. Many people may mistake to overestimate their health, finances, etc and the result can be devastating. I think I’m in favor of facts and reality (not always provided in the home is), then the possibilities are clear. After all, if there is one thing I learned from my 20 years of working conditions in the supply chain, is this: There are no right or wrong, some are better than others. Not good and evil is willing to consider alternatives, “opening our minds to new ideas and suggestions.