How to Recognize and Fix the Choke Point

How to Recognize and Fix the Choke Point

An Advanced Shipment Notice (ASN) is a document, usually electronic, that is sent from a supplier to a customer to advise the customer of an in-process product shipment. The ASN gives the customer the capability to plan their manufacturing or distribution even though they do not yet have the product in their inventory. It’s quite a useful tool, allowing customers to optimize their inventory and reduce working capital, while improving on-time delivery to their customers – the customer’s customer as it were.

While the ASN sounds like a gift from heaven above, it does not come without significant effort. It is, perhaps, one of the most likely victims of cross-functional dysfunction. Multiple supplier departments must contribute to the information required of an ASN including but not limited to order management, warehousing, inventory control, accounts receivable, and transportation. In fact, the transportation department must also rely on the supplier’s carrier to provide information such as truck details, route information and estimated times of arrival (ETA).

Remember the old saying, “A chain is only as strong as its weakest link?” This certainly applies in the case of an ASN. That weakest link is also known as the choke point – that point in the process that is most likely to cause the process to fail. Identifying and mitigating the impact of the choke point is crucial to the success of the ASN.

It all comes down to process. In the case of the ASN, there is one master process, and each of the functions contribute their portion to it. When all the functions contribute to the process accurately and timely, everything works well. When one function fails, this becomes the choke point.

When a supplier develops an ASN, it’s important to bring all of the representative functions together to collaborate on the master process, designing in detail how this will work, and contingencies when something goes haywire, such as an electrical outage at a warehouse, or weather- related transportation delays.

The ASN is a great metaphor for leaders optimizing their organizations, whether it be process related, technology, culture, and regardless of the drivers of that optimization – company strategy, mergers, acquisitions, divestures, or new leadership. Leaders at the appropriate level must come together and collaborate openly on expected outcomes. They also need to  design a path forward to address these requirements, ensuring that any choke points are identified ahead of time, and steps are taken beforehand to mitigate any issues that chokepoint might present.

The bottom line is this: the company must come together to openly collaborate. This means putting aside pre-conceived notions of good or bad within each function and challenging each other to think through the ramifications of their work. This requires open discussion of how changes in one area will impact the ability of other areas to work successfully.

Dedicated to your profitable transformation,

Steve

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