The Art of War and the Supply Chain
Put down your implements of battle, warrior; now is the time for learning. Are you weary of an uphill battle for market dominance? Sun Tzu teaches how to be a supply chain leader.
Their plane did indeed leave five hours earlier than the originally scheduled plane. However, what they did not take into account was the information on the delivery routes: Their plane went through Bahrain before going to Kuwait, and their parts ended up stranded in Bahraini Customs for two days before even reaching Kuwaiti Customs. The part they needed was also shipped via the established distribution system and arrived three days earlier than the "faster" shipment.
Competition
"If your troops do not equal his, temporarily avoid his initial onrush," states Sun Tzu. In other words, if you are taking on a competitor head-to-head, make sure you are ready for his/her initial engagement, and to do this you have to be prepared, which is another one of the themes woven throughout The Art of War.
The case of home improvement giants The Home Depot and Lowe's is a good example of studying and preparing to take on your competition. For a long time, when I was growing up in North Carolina, the only home improvement store was Lowe's. Then along came The Home Depot, which amassed over 1,000 stores in 20 years and is famous for being the fastest company to hit $150 billion in sales.
In light of this, Lowe's had to assess and form its strategy, which appeared for several years to be to open a new store within a few blocks of The Home Depot and take them on head-to-head. However, when Lowe's reassessed that strategy, it realized that females start the majority of home improvement projects. This prompted Lowe's to start carrying more pastels, more furniture and more appliances in their stores, thus increasing their stock price by 82 percent over a two-year period. The Home Depot's counter to this was to go into the appliance business, and, after less than two years, The Home Depot is now the third largest retailer of appliances.
Training, Remaining Current
"If officers are unaccustomed to rigorous training they will be worried and hesitant in battle&" Sun Tzu says the greatest of crimes is to be unprepared for battle, while the greatest of virtues is to be prepared for any contingency. The only way to ensure that your leaders are not hesitant in the face of competition or decisions is to make sure they are well trained.
And just as the military invests millions of dollars annually to prepare soldiers for any contingency in combat operations, companies have to be willing to invest in training for their employees to ensure success in business operations. Toyota, for instance, invested $50 million in the University of Toyota to ensure employees receive the proper training necessary for success.
There is a difference between training and education, however. Education is a classroom type of learning and is important, but training, in contrast, is a hands-on form of learning. Toyota requires every employee at its Ontario, Calif., parts distribution center to have 80 hours of training every year: two full weeks. This is one of the reasons that the retention rate for employees at Toyota is over 95 percent since the distribution center was opened in 1996.
Another key area of training is cross-training. This form of training is critical for supply and demand chain success. Nothing is more frustrating to a customer asking for assistance or asking a question than being told that the person with the answer is on vacation and no one else is trained to do that action.
After Action Reviews
"Therefore, when I have won a victory I do not repeat my tactics but respond to circumstances in an infinite variety of ways." What Sun Tzu is telling us here is to change our tactics after we've looked at what we did right or wrong in the heat of battle. In the Army, we use a process known as the After Action Review. The process is used after every training event and every operation to determine what went right according to the plan or what went wrong and why. The process is not designed to fix blame for something that went wrong, but instead it is meant to find out why something went wrong and how to preclude it from happening again.
The Army's After Action Review process is a seven-step, straightforward approach to getting to the root cause of the problem:
1. What was the plan?
2. What actually happened? Did we follow the plan?
3. What went right? How do we sustain that?
4. What went wrong?
5. Why?
6. How do we fix it?
7. Who is responsible for ensuring that it is fixed?
