There was an island populated by a tribe of agrarian people who harvested seaweed and grew vegetables, wheat and fruit crops to live on.

They employed a band of brothers who converted their seaweed into a range of fertilisers that they used for their farming.

Every year, for twenty years, the islanders sent a legate who predicted how much product they needed, and the band of brothers made it for them, and they were paid when it was made. This business wasn’t very profitable for the brothers, but it was reliable and consistent enough to support them so that they could undertake more profitable work for other customers and so to sustain and grow the business. The business with the islanders grew steadily and the brothers contributed to it in various ways as the product range evolved and supply chain problems were overcome.

Then, one day a man came to visit the band of brothers. He looked an ordinary sort of chap and he said:” Hello, I am an envoy from the new King of this island. The islanders have voted the new King into power, and I have come to tell you how the King wants your business to be conducted from now on. The King wants to transition to the new way of working by the end of June, in three months’ time.”

“Firstly, the King is based in a country a long way away and you will have to invoice him there for your sales, and we want you to change as little as possible while I explain what he needs. The King has a large number of envoys who he uses to manage the many different aspects of his wide range of business enterprises, and you will need to engage with each of them as they assess how you must change to satisfy the King’s model for your business on this island. Their word is law but to ensure that they will never betray the King they will not be in post for more than 30 months. For example, the King can’t pay you for what you make until you send it to his customers, and he can’t let you hold any of his seaweed that you need for production until you have paid for it. You must continue to make the product to the forecast that is given to you so you should continue to operate without any changes for the time being.”

The band of brothers were puzzled as to how the new rules would work and how they would be able to finance the business on these terms, so the envoy asked them to make some proposals based on the previous year’s data.

The brothers presented a pricing proposal they believed would be sustainable on the previous year’s numbers and a new stocking and payment plan for the all-important seaweed component.

At the next meeting the envoy seemed to be unhappy with the proposal but left the brothers uncertain if it was a basis for proceeding or not. The brothers tried to clarify how the King would know that there was stock available to sell to his customers if the brothers had not already sold it to the King.

The envoy explained it like this. “The King expects to operate a system of weekly and daily checks to ensure that the production operation can adjust the forecast of future requirements in alignment with the current orders and the stocks that have been made to forecast, but haven’t been paid for, so that the people in the country a long way away have a continuous oversight of the forecast, sales orders and virtual stock.” The brothers struggled to visualise what exactly this would mean in practice despite a brief illustration of two pages of a process flow chart. The envoy seemed to be frustrated at their lack of understanding and concluded:

“All of this and the unfamiliar terminology of departments, functions and organisations will be revealed to you in due course, as will the list of the products that the King wishes to be made and sold. (With the possible exception of the list of retail products that are still under discussion with another party). Meanwhile we urge you to continue to work as usual but also to accommodate all of our envoys and to submit historic data for the sales and production of the products, particularly concerning variance between sales and forecast, even though the King has had access to all of the island’s data for several months.”

The band of brothers started to be concerned that not only were their requests for terms of business in compensation for the new rules unaccepted, but the new operational processes would be more of a burden than before, and they became fearful.

They particularly feared that the new rules would lead to pressure for frequent changes in production plans in response to un-forecast changes in sales demand with all of the cost, complexity, and opportunity for error that their twenty years of experience has led them to expect.

The danger that they feared most was that not only would their business become less profitable but the new King’s demands would prejudice the fulfilment of service to other more profitable customers and so strangle the business’s opportunity for growth.

The band of brothers returned to their tents and muttered to themselves as they prepared for the following week’s visits by six envoys to audit quality systems, packaging compliance and the King’s new contract (which is yet to be tabled).

Will next week be the “darkest hour before dawn”? It will be week 5.