As you may know, I currently work part time with an early-stage software company that provides a cloud-based solution for tracking regulated waste.
We work with the entire supply chain from generators such as manufacturers to brokers and haulers and finally the facilities that dispose of the waste. In this supply chain, the tail (facilities) wags the dog (manufacturers).
In my 30-plus years of working for and with manufacturing companies, I have seen many tails telling the dogs what’s what.
In this case, there are 8,900 waste facilities registered with the Environmental Protection Agency. There are 3 million generators. The generators pay for waste disposal.
And as most of you know, if anything goes wrong in the process — paperwork, spills, mishandling — you have the deep pockets. You get the call from Mr. EPA. Yet, the facilities tell the generators what paperwork they will use, how they will handle communications, how the material will be delivered, on what, when, where, and what it will cost.
Makes no sense
I witnessed a case where a broker/ hauler drives 45 minutes one way, then waits between six and 18 hours to gain access to one of the places where they can offload. Since drivers can only be in the cab for 10 hours, they many times transport drivers to the line of trucks and switch them out.
Here’s the itch: There’s another less-used facility 120 miles away. A two-and-a-half hour drive with no lines. But the broker couldn’t see any advantage to driving the extra hour and 45 minutes, choosing to have their drivers and equipment sit in line for a day and a half or longer burning fuel (you can’t shut the trucks down).
What surprised me was how the hauler was willing to do this. It makes no sense. Until they told us they pass the additional costs on to the manufacturer. I was a QA manager at a manufacturing plant many years ago. I just wanted the nasty stuff out of the plant.
Out of sight, out of mind. Until something goes wrong. It’s a small cost compared to all the other problems companies encounter.
Increasing risk
It’s an example, however, of how issues can spiral out of control, where the tail indeed drives the dog. In many cases, your risks are being increased without you even knowing, until something happens, because we don’t ask questions.
How many examples do you have in your company where the supplier with exclusivity, but with rules around lowest cost bids, lack of training more employees in critical operations, failure to deal with a problem employee, no redundancy in vital equipment or fixtures, customers abusing payment terms and long invoicing processes wags the dog?
Take a look at all your processes at least every year, not just the ones that are the noisiest or highest cost. Ask questions. You might be surprised at what you find. ●
John Myers is entrepreneur-in-residence, director TA2, at the University of Mount Union.
