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Archive for June, 2010

The Value of Having a Chief Value Officer

Posted by thempowergroup on June 24, 2010

Chief Value Officer (CVO) and Supply Chain Management

What if each company had a head of “Value Creation and Management?”  Perhaps it would be a senior level executive with a title something like “Chief Value Officer” (CVO).  What might such an individual be tasked to accomplish, and how would this individual work with a Supply Chain to achieve greater value for an organization?  The concept of a CVO isn’t a new one, and the concept has been discussed and promoted by firms such as Deloitte for certain professional service firms, such as accounting firms.  But what if large manufacturing and other types of firms had someone with such a title?

We’ve written about value in these blog posts before.  Strategic Sourcing certainly needs to become more focused on achieving true value rather than simply price or cost reduction if it is to continue as a viable key business process in the future.  And achieving the most effective business results in all areas is likely to require organizations to take a new look at how they define goals and strategies and processes in the future.  The old rules of continually squeezing more dollars out of processes and relationships with suppliers and customers in order to meet short term business needs just don’t cut it anymore.  Collaborative approaches to generating value for all participants in a supply chain will become the norm rather than the exception in future years.

A Chief Value Officer would be responsible for ensuring that all business processes and organizational entities are focused on a single company-wide goal, the creation and maximization of value.  That includes the Supply Chain as well as the Strategic Sourcing process and organization.  The CVO would, based on inputs from various stakeholders, determine the definition of value in the organization, create single value goals for the company/organization, and work with each organizational group to develop goals and strategies that will lead to effective value enhancement results.  The CVO would be the focal point for value and would have specific value increase targets that are quantifiable, measurable, and easily understood by other stakeholders.

The impact on Strategic Sourcing would be profound.  With so many Sourcing programs and projects becoming little more than cost reduction exercises focused on generating cash for the current year, the creation of a value officer in the company could be the impetus for transformation of Strategic Sourcing from a cost reduction process to a true value adding strategic process.  If the Sourcing head understands that the program must achieve results that are consistent with the company’s value goals, then the Sourcing strategies developed will be more likely to be value based, i.e., more collaborative, more long term, more focused on leading stakeholders to achieve success in their piece of the Supply Chain.

The starting point would be a greater focus on defining who the customers are, internal and external, and then defining what real value means to each category of customer.  Value is what drives Supply Chain requirements, after all.  Value is what also determines a company’s pricing strategy, since the only thing a customer can use to justify a price is how much value has been received.  It’s not about a supplier’s costs or about meeting basic service requirements, or about providing a certain level of quality.  It’s about that intangible sense a customer has that what has been purchased from a supplier, whether a product or service, will make them more successful in their own businesses.

When a company determines that it will be measured on criteria beyond basic service and quality considerations, the strategic possibilities expand enormously.  If the goal is to be viewed as a premier leader in the market in innovation, creativity, knowledge, passion, or any of the other “value” related characteristics that employees in the new value focused organization will need to have, then value based strategies will follow.  Each of these characteristics is a component of certain advanced supplier/customer relationships, such as long term value based relationships where the key suppliers become part of the supply chain of the customer, and they participate in early product development programs as well as in customer research, manufacturing improvements, and supply chain streamlining.

The nature of core employee competencies will change as well.  No longer will performance of Supply Chain employees be measured based on some mechanical output measure.  Instead, less tangible measures such as the above, which measure individual character and approach to work, will increasingly become part of the recruiting process and the performance evaluation process for Supply Chain and Strategic Sourcing personnel.

Having a focal point for value in a company is an idea that needs to be turned into a reality.  A CVO can be the catalyst to achieve the transformation of Strategic Sourcing from its current cost focused mentality to a true value creating process.

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The Bagel Problem – Supply Chain Management 101

Posted by thempowergroup on June 17, 2010

Just a Bagel?

Isn’t it nice when you arrive at work and find that one of your fellow employees took it upon themselves to treat the rest of the office with bagels or some other form of breakfast treat?  It makes you feel as if that Monday, when you’re running late and leaving the house without breakfast, really isn’t that bad.  Why do the bagels only come on certain days…special days?  Can’t every day be “bagel day?”  How hard could it be to make that happen?  We just need one person to pick up the bagels each day, right?

That’s what I thought.

My second day as an intern at The Mpower Group was when I was asked to find a “bagel solution.”  I honestly didn’t even know what this meant.  The bagels were getting here every Monday, Wednesday, and Friday, so what is the problem?  I realized the bagels were not arriving consistently at the same time.  Sometimes they would be here by 7am with the first person, but often not until 9am.  Sometimes two people would bring in bagels, and every-so-often no one would bring bagels.  The process needed a little more structure.  This way, the bagels would arrive at the right time every other day.  I developed a flow chart of the process and procedure in purchasing the bagels and getting them to the office.  Little did I know this was only the tip of the iceberg.  I was about to experience supply chain management 101.  Who knew it could be so complicated!

I started devising alternative solutions because the bagels were still not arriving at the desired time.  Employees were getting frustrated when the question “Who is picking up the bagels?” continued to circle around the office.  I tried setting up catering accounts with Einstein Bros. and Panera Bread to have the bagels delivered every Monday, Wednesday, and Friday.  This ensured freshness and no one from the office was responsible for picking them up.  The only downfall:  $50.00 minimum per catering order…that’s approximately 4 bagels per day for an office of 10.  I knew this solution was too good to be true!

I began thinking more strategically and approached this “bagel solution” as if it was a real supply chain problem…The Mpower Group way.

First, I communicated the desire for a new process and developed interview questions for each TMG employee.  These questions included:

  • Who eats bagels in the office?
  • How many per person?
  • What kinds of bagels are preferred?
  • What are the preferred cream cheese flavors?

After collecting this data, I asked for feedback on current process (i.e. what is currently working and what is currently not working.)  I then assessed the possible supply bases (including Dunkin’ Donuts, Einstein Bros., and Panera Bread) to make sure I was accommodating all employees’ needs as much as possible.  I then separated individual wants and needs to confirm that our priorities were straight throughout the development of this new process.

After making the executive decision to develop a standing order with Einstein Bros., our baker’s dozen, with all of our favorite bagels and cream cheese spreads, is waiting for pick-up at 7am every Monday-Wednesday-Friday; Sliced and ready to be consumed!

After figuring out the proper procurement and logistics for this process, the next items to be considered in this supply chain include storage, inventory, and maintenance.  I devised an easy-to-read flow chart (ordered by time) to organize the different responsibilities each TMG employee holds in this new process.  The responsibilities include:

  • Setting up the bagel station by a certain time
  • Clearing the station by a certain time
  • Marking the cream cheese with a date so that we know how fresh it is
  • Placing the bagels in sealed containers
  • Taking inventory of plates and knives
  • Discarding the bagels & cream cheese

So long as responsibilities are being handled properly, we will have the cleanest bagel station, along with the freshest bagels and cream cheese.

After considering storage, inventory, and maintenance, I found it important to have a process/solution measurement.  With this, I can receive feedback from all employees in regards to the new bagel process solution.  Every week, I have the opportunity to call Einstein Bros. and adjust my standing order to accommodate to the employees’ needs.  At the end of the summer, when I return to school, I will transition the monitoring and supply chain management tasks to another TMG employee.

Since my focus is to make this process simple for each bagel consumer, I took morning trends into consideration and thought about something other than bagels for a moment.  Why should the employees of this office have to walk into a different room in order to get their morning coffee?  They should be able to pour their coffee at the same time their bagel is toasting.  With this, I developed a coffee station right next to the newly developed bagel station.  This simplifies the morning processes and lessens the traffic within the office.

This project took a great investment in time, feedback, trial & error, and multiple attempts towards success.  Realizing that there was truly a glitch in the morning process’ supply chain was the first major step in developing an efficient and effective solution.  The main criteria for success included executing the new process under proper supply chain management after it had been developed.

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Get Fit! Thoughts on Reinvigorating Your Career

Posted by thempowergroup on June 11, 2010

Getting Fit!

Many of my friends work out several times a week. My son, age 22, has taken up running five mornings a week. They are getting fit.  There are many types of fitness. They are getting physically fit, but what about career fitness?

As I consult with companies, I meet with employees who are bored, dissatisfied and generally unengaged in what they are doing. They lost interest in their job, department or even the company. They lost their passion, their mojo.

So how do you rev up your passion for the job, department and company? That is where career fitness comes in. Career fitness is very similar to physical fitness. It’s about gaining energy, health, enthusiasm, and empowerment for your own career. Thankfully, there is no gym, profuse sweating, or cardio involved. Although it does require thought, planning and taking action.

So how do I become a career athlete? In the “old” days companies laid out development plans for the employee, sent you to classes and conferences in exotic destinations. Most firms have done away with that in cost cutting measures. If these options are available to you, lucky you! Be sure to take advantage of them.

For those of us living on the other side of the fence, where cost cutting has occurred, I do have some ideas. Give these suggestions some thought, make a plan, and take action. Take time to record your progress.

  1. Find your passion. What made you chose your line of work? What interested you in the education you have? What made you love it? If you are not passionate about your work, check out local community services, not-for-profits, and associations. Volunteer your talent so you can contribute to someone else’s future and your own.
  2. Refresh and expand your skills. You want to be knowledgeable about your field’s current trends. Use the web to research workshops. Have you checked out webinars or online classes? Even if your firm will not cover the cost, invest in yourself. There are inexpensive classes to help you build skills, making you more valuable to your current employer and more marketable to future employers. Look for recommended reading lists, not just in your field, but in business trends. Use the local library to check these books out.
  3. Broaden your business experience pushing yourself outside your comfort zone so you can work in the widest possible range of situations and circumstances. Work on a cross-functional team or move into another business function. If you have always sourced for manufacturing, check out business services. Go to work for the parent or sister company. Take on a stretch assignment to broaden your skills. Stretching is part of fitness.
  4. Grow and nurture your network internally within your organization and externally. Join a professional network and attend regularly. Get involved in a professional organization. Maybe even take on a leadership role.
  5. Be a mentor to someone starting out. Find a mentor for yourself. Ask your boss and other colleagues for feedback, advice and ideas.
  6. Be sure to pace yourself with downtime and vacation so you can preserve and reinforce your enthusiasm and commitment to doing your best job.

I hope you have found these tips helpful in revving up your career fitness. Once you recapture your passion, optimism will follow.

If you have other suggestions for readers of this blog, please leave a comment.  I’m sure others will appreciate it!

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