What My Kids' Hamster Can Teach Your Small Business About Supply Chain
Optimize Your Supply Chain, Inventory and Processes
I am no hamster expert. The entirety of my hamster experience comes from the past four weeks, in the time since my wife capitulated and allowed our children to bring a long-haired, Teddy Bear hamster home.
The agreement was that our son and daughter would be responsible for the care and feeding of Alexander Hamsterton (a name which I proposed, but did not stick). Their first order of business was to rename our new pet “Minky.”
What can Minky teach you, Small Business Owner, about optimizing your company’s supply chain? I mean, you probably are an advanced primate with a depth of experience in your company, your company’s product line and your supply base. Minky is, by all accounts, none of those. He is a rodent with a fondness for the cover of night.
And, yet, this one-month observation of Minky reveals that our young rodent may actually be a living metaphor for how you can optimize the supply chain of your small business.
Before we get started, please let me reiterate — I am no hamster expert. Please do not contact me about all the ways I am misunderstanding Minky. If you’re looking for serious hamster advice, please check out this article written by a real-life hamster expert and registered veterinarian technician. If you are interested in how our Minky might help you optimize your small business supply chain, read on.
The Hamster Wheel
Do you ever feel that you’re expending a great deal of effort, making a lot of noise and going full speed — only to find out that you didn’t actually get anywhere? Welcome to Minky’s world.
Minky will run what will seem like miles upon miles inside his little wheel that goes nowhere.
And because he’s nocturnal, he’s fond of doing his running at night. My kids have worked out a schedule (because they are the offspring of a supply chain dad) and so Minky spends a week in my daughter’s room, then on Sunday afternoons, he rotates to my son’s room. This rotation has allowed both my kids to claim that the sound of the wheel turning throughout the night doesn’t bother them — and, in fact, helps lull them to sleep.
You might be feeling the exact same way about your supply chain team. You claim that their noise doesn’t bother you. You don’t know exactly what they’re doing, but they seem like they’re constantly in motion. And, at the end of the day, nothing seems to change. They’ve placed their purchase orders. Goods from your suppliers has arrived at your doorstep. And you have product to ship to your customers.
But Minky runs for a reason. All hamsters do. In the wild (yes, wild hamsters!), hamsters are born prey. Being on the move isn’t just a way of life, it’s a way to stay alive. Hamsters need to move so much that evolutionary biology embedded nearly constant movement into their DNA. If they don’t move, they can get sick and even be stricken with paralysis. (Or so I’ve read.
Again, this isn’t an article written by a hamster expert.)
So while it may look like Minky isn’t getting anywhere, all that running and running is actually very important work. It’s helping to keep him alive.
Much like your small business supply chain folks. All that constant motion is in their DNA. And while, from the outside, it may not look like they’re getting anywhere — they are doing the work that helps to keep your company from getting sick.
Yes, your supply chain team is placing their purchase orders — like seem to always be doing. But have you checked what those purchase prices are? Are you paying less for the same goods than you were the last time they cut those purchase orders?
Your optimized supply chain team isn’t just placing purchase orders, they’re also negotiating with your suppliers to drive your costs down.
And they’re working with your suppliers to negotiate faster lead times, so that your accounts payable obligations are leaner.
Retreating Within Himself
When Minky first arrived, he would spend a great deal of time shuttling his bedding into this little house. He would build berms of this bedding and lay behind it. It felt like he had no real desire to get to know us.
He was doing what hamsters do, but not very interested in sharing what any of that was.
Does that sound like your supply chain folks? Do they disappear and just do what supply chain folks do (whatever that is)? With no seeming interest in sharing what any of that is?
After a few days, however, Minky emerged from his self-made barriers and engaged with us. He now looks our way when we walk into the room. He’ll even come toward us (the carrot shreds and apple pieces probably have a lot to do with that). We can appreciate him because we can see him more regularly.
Likewise, you can bring your supply chain folks from outside their barriers by having them report metrics — like on-time delivery, inventory accuracy and cost of goods as a percentage of revenue. Over time, your supply chain folks will work with your suppliers to improve on-time delivery and those other metrics — and you’ll learn to appreciate them, as see them as the Minky of your small business.
Burying His Inventory
Minky will take the food out of his bowl and bury it within his bedding. He does this because he wants to make sure that no other hamster (one day he may figure out there are no hamsters) gets hold of his precious inventory. He puts it where only knows it is, so that it’s available when he needs it.
That’s what a lot of us do with our inventory. We create a safety stock that will be there when we need it. But that safety stock comes with a cost. Every week, my kids clean out Minky’s cage and refresh the bedding. Invariably, the food that he’d buried during the week gets thrown out.
And that’s the danger of holding safety stock. It will cost you valuable dollars and there’s a risk that the inventory will either expire, rot or otherwise become obsolete.
While Minky may be an excellent example of what might be the right way to run your supply chain, don’t automatically follow his inventory policy. Safety stocks can help in a pinch, but are the dollars invested worth it.
Your optimized supply chain should help you deliver what your customers want, when they want it — and spend as little money as possible getting that done. And following Minky’s lead can help you get there.