Don't Forget to Measure UPIs

Perry A. Trunick, chief editor,
[email protected]

The holiday season has a lot of people thinking about packages, but not necessarily packaging. Heavy seasonal volumes may accelerate experience you’d rather not have in a form you’d also prefer to avoid.

You won’t hear many logistics professionals urging, “Turn up the volume until it breaks,” but that’s the experience many have when they encounter a surge. If there’s an advantage to that experience, it is that you locate a problem or a weakness very quickly—just follow the shouting to the source.

Sometimes a problem can exist just below the surface and trouble your supply chain without making enough noise to be noticeable. They exist somewhere in a zone outside your key performance indicators (KPIs), a place I’ll call your underlying performance indicators or UPIs.

For a few weeks I noticed that every time I bought a box of Dad’s cat food, the bottom flap was loose, sometimes coming open without my urging. Since the problem persisted, I looked at the box as closely as I could. In doing so, I noticed the top flap was well sealed and required a reasonable effort to open. I mentioned it to the grocer where I shopped, wondering aloud if they had seen it as a persistent problem as well. In fact, at least one stocker started taping the bottom flap, so someone else clearly saw the problem.

Being momentarily confused about my role—logistics first or consumer—I considered the consequences for the pet food company and the grocer. Top of the list was customer returns and store returns for packages that came open during handling. Those are lost sales that could begin to play into some other KPI—though the cause might not be immediately apparent. Customer dissatisfaction could turn to product avoidance. More lost sales, but without the clear reverse logistics indicator of returns. Customers could reluctantly switch from the one-pound box to the five-pound bag (which might be misinterpreted as a preference and lead to a mistaken emphasis on larger packages and customer defections longer term). I mulled over other factors and decided to go to the source.

I contacted the Dad’s customer service department and explained that they may want to examine their packaging line. I explained what I was seeing as a consumer and what I felt might be consequences for the company. I theorized (openly and to myself) what might be an underlying cause. They asked for the identifying imprint on the package so they could pinpoint the processing plant and then sent me a pile of coupons for free product— cheap consulting indeed.

Within a few weeks, the poor seal was remedied.

In today’s vast, complex, global supply chains, there are nearly limitless opportunities for simple things to undermine your best efforts to maintain high performance levels. It can take a long time for them to bubble up to the surface where you have your attention focused, and it can be very costly in the process.

What’s called for is a spirit, attitude, or culture all along the supply chain that will identify potential problems and fix them before they become disruptive. Acknowledging and communicating those successes will help foster further proactive problem solving. And, in the end, that will help keep those larger scale KPIs on track and improve bottom-line performance.

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