Supply chain operating models
The operating model you never designed
Why accumulated process becomes drag, and how to redesign without halting the business.
An operating model that was never designed still exists. It accumulated, one exception and one workaround at a time, and each addition was rational when it was made. The accumulation becomes drag once the workarounds stop being visible: the system of record no longer describes what the business actually does, cost to serve cannot be produced by customer or by lane, and the process survives only in the memory of the people running it.
What does accumulated drag look like in the freight numbers?
Freight volume and freight spend moved in opposite directions over the twelve months to July 2026. Cass Information Systems recorded shipments down 4.8% against July 2025 while freight expenditures rose 9.1% over the same twelve months. The Cass Truckload Linehaul Index rose 8.6% across that period. Because expenditures rose while shipments fell, the spend carried by each shipment rose faster than the linehaul rate index did.
Mode mix and accessorial charges account for part of that difference. An operating model that cannot separate the rate effect from the process effect cannot say how much of the increase it caused itself, which is the practical definition of drag.
Why does the seventy percent failure figure not survive checking?
The most quoted number in change management has no study behind it. Mark Hughes of the University of Brighton Business School reviewed the five published instances from which the claim that 70% of organizational change fails descends, and reported the result plainly.
“In conclusion, while the existence of a popular narrative of 70 percent organizational change failure is acknowledged, there is no valid and reliable empirical evidence to support such a narrative.”
Mark Hughes, Journal of Change Management, volume 11, 16 December 2011. Source
Redesign work should therefore be argued from what the accumulation costs, measured in the business, rather than from a failure rate that cannot be sourced.
What does the research say about workarounds?
Workarounds corrupt the record of the process, not only its speed. Bartelheimer, Loehr, Reineke, Assbrock and Beverungen studied 13 workarounds across four organizations, using 15 semi-structured interviews, four workshops and event logs drawn from enterprise resource planning and workflow management systems. The study was published in Business & Information Systems Engineering on 16 May 2025.
“This study contributes to the literature by describing how workarounds can act as mechanisms that cause mismatches between process execution and event data, adding to the discussion on process drift and workaround mining.”
Bartelheimer and others, Business & Information Systems Engineering, 16 May 2025. Source
The same paper explains why workarounds appear at all: standard business processes are not easily or quickly adaptable to new technologies and to events the process was not designed for. Every workaround is therefore evidence of a design gap rather than evidence of a discipline problem, which changes what a redesign has to fix.
What does the accumulation cost once labor tightens?
The sector is absorbing the same accumulated exceptions with fewer people who cost more. In transportation and warehousing, average hourly earnings for all employees reached $32.63 in July 2026, preliminary and seasonally adjusted, against $31.52 in July 2025. Production and nonsupervisory employees reached $31.29, against $30.10 over the same twelve months. Warehousing and storage employment fell from 1,869.3 thousand in July 2025 to 1,834.6 thousand in July 2026.
Turnover carries the workarounds out of the building. The quits rate for transportation, warehousing and utilities was 2.4% in June 2026, seasonally adjusted, against 2.0% for total nonfarm employment in the same month. Roughly one worker in forty in the sector leaves voluntarily each month, and every departure removes an exception that was never written down.
Order quality shows the residue. APQC's open benchmarking database records median perfect order performance of 88.0% across 13,590 organizations, measured as the product of on time delivery, complete orders, damage free delivery and accurate documentation. APQC does not publish a fielding window for that measure, so the median should be read as a standing benchmark rather than as a dated observation.
What separates an accumulated operating model from a designed one?
| Dimension | Accumulated model | Designed model |
|---|---|---|
| How exceptions are handled | Handled by whoever notices, outside the standard process, to get past an obstacle. | A named category with an owner, a count, and a defined path back into the standard process. |
| What the system of record is | The system shows one version of events while the work runs in spreadsheets, email and habit. | One record, and the record is true because the process was designed to be executed inside it. |
| How cost to serve is known | Known in aggregate only, and not attributable to a customer or a lane. | Known by order, by customer and by lane, and reported monthly. |
| What order quality looks like | Failures are absorbed individually and never counted. Median perfect order performance across APQC's database of 13,590 organizations is 88.0%. | Failure modes are separated and attacked one at a time against a stated target. |
| What happens when a key person leaves | The workaround leaves with the person, because it was never written down. | The process survives the person who was running it. |
| Response to a cost shock | Rate effect and process effect cannot be separated, so every increase looks external. | Rate effect and process effect are reported separately, so the controllable part is visible. |
How is a redesign run without halting the business?
Four steps keep the operation running while the model changes. First, measure the current model before changing anything: cost to serve by customer and by lane, and exception volume counted by type rather than estimated. Second, fix the record before the process, because a redesign built on an event log that does not describe reality will reproduce the same gaps. Third, sequence the work by exception volume rather than by organization chart, so the highest frequency workaround is retired first. Fourth, retire each workaround explicitly, with a named owner and a date, and confirm afterwards that the exception count actually fell.
The sequence matters more than the pace. A redesign that starts with the organization chart moves people before it understands what they were absorbing, and the exceptions reappear under new names within a quarter.
Sources: Cass Information Systems, Transportation Index Report, July 2026 (twelve months to July 2026) · US Bureau of Labor Statistics, Employment Situation, July 2026, Table B-3 and Table B-1 (preliminary, seasonally adjusted, released 7 August 2026) · US Bureau of Labor Statistics, Job Openings and Labor Turnover Survey, June 2026 (preliminary, seasonally adjusted) · APQC, perfect order performance (n=13,590; fielding window not published) · Hughes, Journal of Change Management, 2011 · Bartelheimer and others, Business & Information Systems Engineering, 16 May 2025 (13 workarounds across four organizations). Last reviewed 18 August 2026.
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