By Tom Reilly
“Too much of a good thing can be wonderful!” —Mae West, actress and comedienne
Unemployment is at historic lows. Manufacturing activity is high. Retail sales increases are more than double the inflation rate. GDP is high. Capital expenditures are at a twenty-five year high. All is good, right? Well, yes and no.
Good times, like tough times, present challenges. Success can mask underlying problems. Low unemployment makes recruiting more challenging as the pool of candidates shrinks. High manufacturing activity challenges capacity. Increased sales volume may reflect strong demand more than effective sales and marketing. Focusing only on the outcome of a good economy may obscure some of the more insidious infrastructure hitches.
When a business has too many customers, service levels fall because companies lack the infrastructure to adequately service these customers. Wait times are longer. Backorders increase. Shipping delays occur. Customers get frustrated. Employees are stressed as they try to handle the increased demand. When customers decide to go somewhere else, some people believe that it’s no big deal because there are so many customers. This is the paradox of success: “We are so successful that our customers are growing dissatisfied.” It’s like the old Yogi-ism, “It’s so crowded that no one goes there anymore.”
Companies would be wise to attend to their service levels now to see if their infrastructure can handle this much of a “good thing.” What effect has this much volume had on your service levels? How does this volume challenge your capacity? What effect has it had on your customer satisfaction levels? How has this much of a “good thing” affected your employees? Make sure that your success is not your downfall.