Operations Payoff

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Destroying the Box

box

FreeImages.com/Antonio Marcos

To dramatically increase a company’s value, you can’t just think outside the box, you have to destroy the box. Many executives have (intentionally or not) created artificial boundaries for their company’s growth by limiting themselves to the way things have always been done, or through incremental, short-lived improvements through programs such as Lean, six-sigma, or theory of constraints. The way to achieve dramatic improvements of 20% to 40% (and more) is through innovation and disruptive ideas, like Amazon and Zara.

One way to innovative is through partnerships. Many companies collaborate, but true partnerships can provide results beyond the scope of incremental improvement. For example, in their effort to improve warehouse performance, Alaska Communications (ACS) turned operations over to the customers and boosted productivity by 75%. Here’s how they did it.

During the short summer construction season in Alaska, crews often work 20 hours per day, and sometimes around the clock, but ACS’s warehouse was open only 40 hours per week, causing expensive delays when crews couldn’t access the materials they needed. Because ACS had complete knowledge and control over what flowed into and out of the warehouse, they could turn operations over to the customers and let them have 24/7 access to materials. Using spot cycle counts, ACS had strong internals controls, which the accounting team accepted. The customers were happy and ACS achieved a 75% productivity improvement as a result; a great example of partnerships in action and disruptive, box-destroying innovation.

© 2017 Rick Pay, all right reserved.

This is an excerpt from Rick’s next book, Moving Into the Express Lanes, coming out in 2018 from Business Expert Press.


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