An Operations and Fulfillment ‘Fable’

Oct 22, 2008 7:44 PM  By

Here’s an operations and fulfillment “fable” for you:

There once was a company that made a lot of shipping errors. Customers were beginning to get upset and started threatening to take their business elsewhere.

After thinking long and hard about what to do, the owner gave each department supervisor a bag of nails and told them that every time an order was shipped wrong, the person who made the error must hammer a nail into the fence behind the warehouse.

The first day, the warehouse had driven 16 nails into the fence; customer service had driven 20 nails into the fence; and purchasing had driven seven nails into the fence. That’s right, 43 nails on the first day. After a week, the supervisors could not believe how many nails had been driven into the fence.

Over the next few months, the company began to improve and the number of nails hammered gradually dwindled down. Employees began to discover it was easier to pay closer attention to the customer’s order than to make the dreaded walk to the back of the building to drive another nail into the fence.

Finally, the day came when there weren’t any mistakes at all. The supervisors went to the owner and told him that they had achieved perfection. But the owner suggested that they wait a week and see how well each department continued to do.

At the end of the second week, the owner suggested each supervisor pull out one nail for each mistake-free day.

Months passed and the supervisors were finally able to tell the owner that all the nails were gone.

The owner then called an emergency meeting with the entire company by the fence. He said, “You have done well, but look at the holes in the fence. The fence will never be the same.”

“When we ship an order wrong, can’t find the inventory promised to a customer, or don’t deliver their order when promised, it leaves a scar just like this one,” he said, pointing to a hole in the fence.

The moral? A customer will only take being hurt so many times before they take their business elsewhere. And it is virtually impossible them back once they are gone.

How many nail holes does your fence have?

Rene Jones is the founder of Total Logistics Solutions, a warehouse consulting organization headquartered in Burbank, CA.