I know I’ve quoted this old saying before, but it bears repeating:
- If marketing runs a company, it will go bankrupt, but emerge from Chapter 11 and become profitable.
- If accounting runs a company, it will remain solvent until the last stick of furniture is sold and the doors locked.
We currently are reaping the benefits of accounting-driven management. Actually we’re not reaping the benefits, as much as we’re feeling the pain.
Since about 2010, American businesses have been cheaping out. I’d bet we’ve all seen at least one of the following:
- Moving manufacturing from one third-world country to another to save five cents per hundred thousand products. (Trivia fact – Did you know that American companies once had manufacturing facilities in America and these employed American workers?)
- Maintaining low wages since the workers don’t have other obvious choices.
- Laying workers off when business slows down.
- Keeping the minimum wage at the absolute minimum.
- Fighting the formation of labor unions.
- Coming up with bold new buzzwords to recycle the same old pap. For example, Kanban was a Japanese practice to offset lack of capital and limited space. In theory, the pieces-parts needed to build a practice arrive just as they are needed. Today we call this the Global Supply Chain.
So where are we today after saving all that money? American workers are finding better jobs or better paying jobs and not returning to their old employer. Whether the minimum wage has been changed by Congress, the economics law of “what the market will bear” has affected it. The offshore manufacturing is inexpensive for a reason. Perhaps the location is prone to devastating storms like typhoons. Perhaps it relies on dirt roads that turn to mud in certain seasons. In any case, the products have not made it here, and may not for a while.
And then there’s that wondrous Global Supply Chain. Ships get bottlenecked due to the Evergiven and the Maersk Emerald getting stuck in the Suez Canal. Many ships are anchored offshore waiting for a location to offload their cargo. Container ships are great, except that you cannot unload them except where the equipment is available–which means major ports.
And the accountants responsible for this? They took their bonus checks and put them in secret bank accounts in the Caymans or South Dakota. They don’t care that the one toy your child wants will be bobbing around until March.
And last, but by far not least, as President Biden pointed out today, the supply chain is now in private hands. The US Post Office, which was once a major player, is now Louis DeJoy’s private and personal Monopoly game. Guess what? We lost.