Almost every business has an “expert.” This employee has the tenure, knowledge, and technical capabilities to deliver excellence in a particular business function. Unfortunately, your experts will eventually retire or leave. In fact, 25% of the inventory and manufacturing workforce is over 55. And roughly 3 percent of the U.S. workforce outright quits their jobs each year. So, what is your game plan when your expert leaves?
Welcome to one of inventory management’s largest problems: tribal knowledge. But this problem is rooted more deeply than you could probably imagine. In fact, tribal knowledge isn’t a product of tenure. It’s fed, watered, and clothed by inefficient inventory management practices. And eliminating tribal knowledge involves far more than knowledge transfer. You have to change the way you think about problem-solving.
Understanding the Tribal Knowledge Issue in Inventory Management
Traditionally, tribal knowledge is defined as “unwritten information that isn’t shared by other people in the company.” And it’s almost always discussed in the context of age, rank, and niche positions. But in inventory control, tribal knowledge is often a byproduct of inefficient processes and disconnected systems — not seniority. When an inventory issue happens, one team or person solves that issue and learns from it. Without a standardized inventory management system, that knowledge is trapped with those people who solved the problem. Over time, some leave, some stay. Those that stay now have “tribal knowledge.” This happens across every team. So, businesses with unstructured and siloed processes have tribal knowledge artifacts across their organization, not just with a specific person or team.
Unfortunately, many companies attempt to solve tribal knowledge by tackling the end part of this chain. They create workshops and classes to help older employees transfer knowledge to younger employees. And that’s great! But it’s not solving the problem. Instead, inventory-based businesses need the right standardization and technology to prevent siloed knowledge flow in the first place.
That’s a big part of what we solve at StockIQ. We standardize purchasing and inventory control processes. Not only does StockIQ’s standardization process help you perform gap analysis on problems instead of allowing team-based problem-solving that builds tribal knowledge, but we take all of your most critical inventory-based knowledge out of people’s heads and into one monolithic solution. And this process has far-reaching benefits — including shorter replenishment cycles.
The Relationship Between Tribal Knowledge and Replenishment Cycles
Replenishment is bound by processes. From ordering to unloading, storing, and stocking, every step in the replenishment cycle involves specific touch points. Unfortunately, many companies use manual or spreadsheet-based ordering and inventory tracking. Let’s start with this: spreadsheets have value. But they should not be used to handle ordering or inventory tracking. They simply have too many glaring pain points. In fact, let’s list a few:
- Complexity: The premise of spreadsheets is super simple. The execution ends up as a hyper-complex static blob filled with complicated algorithms and far-too-many numbers. Over time, spreadsheets grow increasingly complicated, which eventually leads to another form of tribal knowledge. The person or persons that built the spreadsheet are likely the only ones capable of digesting the massive beast. Believe it or not, ERPs — which are infinitely more complex on the back-end — are 100x simpler on the front-end. And that’s what really matters.
- Security: Most spreadsheets aren’t backed up, and they lack security outside of some cell locking features. That’s a problem; a big one, 36 billion records were exposed in the first half of 2020 alone. Threat actors are everywhere, and they want your data. Here’s where things get scary. Successful malware attacks cost businesses an average of $2.6 million. So, most companies attempt to fix this by encrypting spreadsheets and adding user controls to them. But that introduces an entirely new issue.
- User controls: Spreadsheets have virtually zero built-in user controls. One person can use a spreadsheet at a time, and version control becomes increasingly challenging to control as the spreadsheet grows in complexity. Guess how most companies solve this problem? They only allow certain people to handle their spreadsheets. Suddenly, we’re right back to the tribal knowledge problem.
- Variability: Spreadsheets aren’t standardized. Each spreadsheet can be customized in unique ways, and each organization uses spreadsheets uniquely. Again, this introduces tribal knowledge into your organization. Each team knows how their spreadsheet works. No one else does.
- Scalability and continuity: You can’t scale a spreadsheet. You can simply enter more data into it. And more data brings more problems, more security issues, more complexity, and more variability. Worse yet, spreadsheets have no tangible continuity. If a spreadsheet gets corrupted, you get to lose a week of process by booting up an old backup (if you even have one!)
We could go on. 88 percent of spreadsheets have errors. In fact, one in five studies involving genetics contains errors due to spreadsheet formatting. These are hyper-complex papers written by incredibly smart people. And all of that work was foiled by a spreadsheet.
Spreadsheets produce tribal knowledge as a byproduct of their structure. And this tribal knowledge leads to lengthy replenishment times. Not only are spreadsheets inefficient in terms of speed (manual data entry takes time), but the unique combination of errors and tribal knowledge makes them particularly weak for inventory replenishment. What happens if someone enters a wrong data point? What will you do when your spreadsheet expert leaves? And how much time do you waste manually entering data?
The same goes for manual replenishment. Tribal knowledge cripples timeframes and forces you to over-rely on specific employees. At StockIQ, we help distributors and 3LPs break the trend. Our hyper-intelligent replenishment engine standardizes and automates the entire replenishment process, destroying tribal knowledge in the process.
StockIQ Shortens Replenishment Cycles & Eliminates Tribal Knowledge
The key to eliminating tribal knowledge is simple: you need a standardized process and intelligent inventory platforms. We can help. StockIQ provides amazing algorithms, processes, and automation to inventory-based businesses looking to achieve escape velocity in the modern supply chain. Are you ready to modernize your inventory systems? Contact us to learn more.
