StorageCo’s most pressing issues
The second post in The 9Stucks Boot Camp Series (‘An Eyeful and an Earful’) called out a number of StorageCo’s challenging issues (a real Stuck Salmagundi). Typically, there are problems that stand out and dominate all the others. StorageCo’s 2 biggest issues were:
- a business model that generated unnecessary complexity, added costs and caused tension throughout the company and the leadership team
- plants, equipment, and processes that were old and inefficient (this will be covered in the fourth/next post ‘Go with the Flow(charting)’)
Questions for you to consider are:
- What is a business model?
- Why is StorageCo’s business too complex?
- What can be done to fix their business model?
The Business Model
A business model (i.e. the ‘guts of the business’) is the combination of operating entities, plants/locations, products or services, distribution channels, customers and the associated operational policies that support this unique mix. StorageCo had 2 plants and 4 product lines. For purposes of this discussion let’s call the product lines 1) Specialty, 2) Plain Vanilla, 3) Logjam (hint), and 4) Industrial. Summary product line sales, customer data and order data are highlighted in the chart below.