Aug. 8 2006 05:54 PM

In every business lifecycle, there are break points. Break points can be best described as those times and conditions where increased sales volumes and demands, as well as present operating complexities, require complete evaluations and system changes in order to stay competitive.


In evaluating your present operating system and the impact of future growth on operating capabilities including space, labor, equipment and controls, you will develop various options and alternates that must be carefully examined in order to present final recommendations or decisions. The specific recommen-dations you make in each operating area reflect a strategy or course of action you feel appropriate, the risk youre willing to take and the commitment necessary for your company to make in order to support the new operating conditions.


Break points present a real opportunity for change, but like Pandoras Box, be careful what you wish for your wish may come true. There are many risks to consider in your recommended course of action. If you first eliminate the do nothing option, what you are basically left with is the perfect answer.


When you consider the continuing challenges facing companies and businesses today, you tend to think in terms of trying to increase market share and profitability, holding the competitive edge as well as addressing service and cost issues. With that kind of pressure, there is always a temptation to go for the perfect answer. Do it once, do it right and dont worry about it again. On paper, this works very well. But consider the risks and implications of the dark side:


The perfect answer may require a large capital investment. The numbers might not add up and the return on investment may be too long.


Its hard to look over the forecast horizon. So what guarantee do you have that the perfect answer will fit future operating requirements? In other words, how long will the perfect answer work?


You may be able to develop the perfect answer, but can your people implement that answer, and more importantly, can they sustain it?


Finally, will the perfect answer render future changes unmanageable? Putting operating flexibility at risk is a factor that many people dont consider. Looking at todays business environment and demands, flexibility is the cornerstone of the way we have to operate.


There are two levels to consider: some people look to the future but only change what they immediately need to. Others look to the future, change what they need to now and develop operating answers that are easily expandable as they are required.


Many consider the answer that works the safest and most conservative approach a constant cycle of review, modification and incremental changes that you can build on. The risk factors can be minimized, the investments can be controlled and the next steps in the sequence can only be implemented after successful recognition of the previous step.


In exploring the answer that works, situational awareness and a common sense approach can provide you with the insights necessary to make the answers more reliable.


Lynn A. Gross is a warehouse operations consultant in Boca Raton, Florida. E-mail for more information.