I’m no big fan of Tesla, but I am slowly warming up to them. The story a few weeks back about them working with the boys from Valor Equity Partners to bring production back from Asia, resulting in a reduction in costs of some $30,000 per car went a long way. But this post is not so much about Tesla as it is about resistance to change.
The state of New Jersey, in its infinite wisdom, has decided to pass a law requiring all new car sales to go through dealers. Now anyone with half a brain knows that the law has nothing to do with “consumer protection” and everything to do with the dealers putting money into the pockets of New Jersey politicians, and the pressure their lobbying groups exert.
Dealers may or may not add much value in the new car supply chain. I tend to think that the little value they add is largely undone by the rampant customer abuse that is part and parcel to their entire industry. There is a reason why car salesmen typically score among the bottom feeders in any poll of peoples’ attitudes toward various professions. In the end, dealers add considerable cost to cars that is hard to justify. The notion that, “Competition between dealers also lowers vehicle prices,” is absurd. How adding non-value adding costs to anything lowers prices to end customers is a complete mystery.
In fact, people will go to great lengths to protect their place in the value stream, even in the face of overwhelming evidence that they add no value. The pressure retailers put on state governments to add sales tax to online sales is another example. Brick and mortar retailers create costs for the local government – local police and other emergency personnel provide support to the retailers and the crowds they draw, customers gathering near the retail districts require city sanitation services, and so forth. Now I am not advocating any taxes for retailers or any other business – Lord knows every business s overtaxed. I am merely saying that there is at least a thin rationale for sales tax being needed to offset the fact that towns and cities do provide some service to the brick and mortar store owners. But I can scratch my head all night and not come up with any reason why the city fathers are the least bit put out by me buying something on line from another state and having the UPS truck rill up to my house. But the retailers will protect their non-value adding livelihood to the bitter end and exert whatever political pressure they can to try to regulate their survival.
It was similar motivation that drove the book publishers to illegally collaborate to try to control prices, and for the record companies to try to defend their margins by all manner of shady dealings in the face of clear evidence that, once downloading their wares was easy, their role in the chain was minimized.
But those are examples of the big picture. The very real, every day examples of the same are within every company pursuing process excellence. The need for planners and schedulers staring at their MRP screens all day goes away when everything goes to demand pull, but they and the life-long veterans of supply chain management who made their bones doing such work will go to extreme lengths to preserve the need for their existence. Accountants, IT folks and all of the rest of the office administration corps will do the same – that is, do whatever it takes to preserve their non-value adding functions.
Often the preservation is done through highly creative methods, and sometimes it is little more than outright resistance to change. But going quietly into the night is not something to be expected of the people who have made a career of working hard, but adding little to no value in the eyes of the customer. They confuse ‘necessary’ with ‘value adding’, or at least make every effort to keep leadership confused about the difference between the two terms.
I am sure you will find that it is rarely the value adding folks on the factory floor who resist lean thinking; and much more often the people threatened most by the notion of a company driven to maximize customer value.