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July 20, 2018
The importance of people systems: Logistics
January 28, 2016
Logistics is a term with a wide range of definitions. It’s widely believed to derive from Greek for art of calculating or reason. Earliest uses tend to focus on movement of goods and people to serve military goals. Modern usage of the term encompasses everything involving large, complex operations and coordination. Planning a wedding, manufacturing widgets, running a local bank branch, managing a department and everything in between can have substantial benefits by spending the necessary resources on logistics. I gravitate toward the crowd-sourced Wikipedia definition: logistics as the science of developing systems and processes for people. Our focus at Ulku Logistics is on building or improving systems and guiding businesses to dramatically improve decision-making. Many business leaders underestimate the value of appropriate efficient operations systems, or how productivity can be stunted by poor systems.
A recent systems-focused project of mine was to investigate poor response time and long work hours for a specific role. In most circumstances a seeming personnel performance issue has its root in inadequate systems or procedures. The employee was exceptionally qualified for the role, but was unable to complete the daily tasks in a reasonable work day. He had a procedure for nearly every task that had been honed by years of previous incumbents. His manager had decided to divide the role into two positions, and I was brought in to recommend an efficient division of responsibility.
I spent several days observing and asking questions to understand this employee’s work flow. As he was already overworked, I’m sure he wasn’t excited about my unending queries, but he maintained a positive attitude. It quickly became apparent that the procedure was driving every process the employee completed. He relied so heavily upon the procedure that he didn’t know the “why’s” of what he was doing. The procedure said to do this, click this, and type this and he executed. I take the reason, “because we’ve always done it that way,” as an invitation to dig deeper. The role required the use of sophisticated software with which I was unfamiliar so I engaged an expert in the software to look over one of the procedures. That procedure had many unnecessary and redundant steps. I was able to devise a plan to reduce the time to execute the procedure by almost half with functionality maintained. The employee’s manager quickly agreed to have all the procedures involving the software reviewed. The required time for daily tasks involving this software dramatically decreased from three hours to only 30 minutes.
Some additional procedure improvements I proposed allowed that one employee to work a reasonable day and dramatically improve his performance and response time. More importantly, it allowed the manager to avoid spending over $100,000 per year including training and benefits on activities that didn’t add any value to his organization.
This example is not an unusual occurrence. Many businesses are run with systems that have been gradually developed, improved and added to over the years. The client for this example is a large, international corporation, but I have seen the same symptoms in local professional practices. A systems expert such as Ulku Logistics can guide businesses to making massive improvements to their systems or, when necessary, guide creation of systems.
For managers and entrepreneurs such as you, having well-functioning systems significantly reduces your employees’ reliance on upon you. This allows you to focus on building the future of the business, while day-to-day challenges are managed without always requiring your input. Expert-built systems are one of only a few methods I know of that can add hours to the day for organizational leaders, while improving accuracy and reducing errors.