News U Can Use

A Supply Chain/Strategic Sourcing learning community devoted to ideas you can use in your work or daily life.

Archive for July, 2010

Effective Execution of Process is Key to Translating Concepts into Action and Results

Posted by dalipraheja on July 29, 2010

(Reposted from Sourcing Innovation) Most of us missed it. They were trying to tell us about it when we were very young. We were not even in nursery school yet! It’s all about the vowels. It’s not about Old MacDonald’s farm, his pigs or hens or any of that … it’s about E-I-E-I-O! Now what do vowels have to do with Sourcing and Supply Chain Management you might be wondering? Well, as it turns out … everything! The vowels are the most critical link between our alphabet and our language. Without vowels we don’t have words … we just have letters! Without words, we have no sentences, no language, no meaning, no intelligence — in short, we have nothing! And so it is in our organizations. We focus on the tools, templates, processes, systems (the farm, the pigs, the hens) and we forget about the most critical elements in achieving exceptional business results — the vowels. And without the vowels, all we have are letters. There is no meaning … and we add no value!

The vowels I am referring to are Adoption, Execution, Implementation, Optimization and Utilization. Without these, all we have is an organization that has the best practices, the best processes, the best tools, the best templates, etc. In other words, what we have is a Toyota. We might have an organization that may be succeeding at a large scale, but we don’t have a sustainable model in the long run. For that, we need the vowels … the ever powerful vowels! If you were strategically sourcing a surgeon for yourself, I am sure you would look at more than just the tools that the surgeon has at her disposal and the training that she has been through. You would want to know what she could do with the tools and the training … n’est-ce pas?

And yet, sadly, it is still very hard to convince most organizations where they need to invest their focus and their energy. They all think that all they need is to develop the right infrastructure in terms of the processes, tools and templates and then train their people on the infrastructure and — voila — just wait for the results. We keep trying to tell them that they should budget at leastan equal amount of effort in the vowels, including the help of an expert talent management consultancy, and they continue to insist that all they need is what Old MacDonald talked about … and that the vowels will take care of themselves. Alas, they don’t. The superior business results never materialize. The organization gets frustrated and decides that it needs to adopt new processes, tools and templates because the current processes, tools, and templates must be broken. The cycle starts all over again. And the lessons of childhood are forgotten … that’s it’s not in the verse … it’s in the chorus … it’s all about E-I-E-I-O!

And the focus on the vowels needs to start very early. After all, the alphabet does begin with an A! Furthermore, the focus cannot end with just the creation and training around the process, tools and templates. It has to extend all the way to the point where superior business results are achieved. And while we will need the best tools, templates and processes (for the infrastructure), the mere presence of, and training on, the infrastructure is clearly not enough. In order to truly achieve superior business results, we have to make sure that we pay attention to the vowels.

The focus has to be on what happens beyond the training, how people will actually achieve superior business results, and how they will successfully adopt, implement, and execute the processes. It is the same with supplier relationship management processes. It’s not how you design them, it’s how you implement them. You need to focus on how these relationships will be established and managed to extract maximum value. It’s not just about getting to the contract. At my company we believe in this so much that we even approached a couple of the major law firms to encourage them to include the vowels in their deliverables to clients when they work on executing large transactions between providers and suppliers to help set up these relationships. We did not avail, but we know we’re right. (By the way, it is the same with organizational structures. To optimize them, we have to focus on the lines [vowels] between the boxes, not only the boxes.)

Here is how the doctor described the goal of a transformational journey:

We mostly agree with this except we think the potential is even greater than that. A truly transformational Sourcing / Supply Chain department actually should be transforming other departments. They should be totally focused on value across the entire supply chain. The department should function as if it was a consulting group. The best strategy for such a department is actually a “Sunset” strategy. This concept, and others, will be discussed in later posts.

We will examine this issue in detail in a series of posts. We will begin the transformation journey together. We will discuss the use of maturity models, both current and emerging ones (which look almost identical to the current models) and talk about the gaps and the roadmaps. You can rest assured that we will not ignore the consonants (the maturity models, roadmaps, infrastructure and talent management) … but, we will also focus on the vowels (Adoption, Implementation, Execution, Optimization and Utilization). Because there’s gold in them thar vowels. We will take you back to your childhood, to the days of Old MacDonald, to E-I-E-I-O and then we will build a solution framework and challenge your thinking. We encourage you to join the conversation. Add a cluck, cluck here and a cluck, cluck there … and pretty soon we’ll have everywhere a cluck, cluck!

Thanks, Dalip.

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Farewell to a loving man and respected professional

Posted by thempowergroup on July 20, 2010

It is with great sadness that we bid farewell to our friend and one of this blog’s founding authors, Ronald Sanderson. Ron was not only our friend and TMG comrade for many years, but he was a father, a grandfather, and a husband. His kindness, knowledge, and humor were blessings he shared with all of us. We miss you, Ron.

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Were You Ready For Eyjafjallajökull? (Bless you!)

Posted by thempowergroup on July 15, 2010

Japanese auto makers suspend production.  Air shipments requiring special handling (refrigeration, time sensitivity, etc.) are put on hold.  Performers can’t make scheduled appearances on “Idol Gives Back”.  Mail delivery is delayed.  The Royal Navy sorties to help service men and women get home from Afghanistan.   And all because a volcano in Iceland decided this was a good time to spew ash into the atmosphere.

Natural and man-made disasters have been a major news story over the last six months.  In addition to volcanic activity, three devastating earthquakes and several lesser but still sizeable shocks have struck around the world.  The impact has been felt, in one way or another, by a vast number of people in myriad ways.  I want to concentrate on the strain that these event place on those agencies and people who specialize in disaster recovery.  There are lessons there for all of us as we consider supply chain risk.

When an earthquake struck Haiti on January 12, some of the most highly trained people in the world rushed to assist with the disaster recovery.  Everything from engineers who specialize in assessing the structural integrity of partially destroyed buildings to handlers of dogs trained in finding people buried in the rubble were mobilized.  On February 27, the same resources were needed in Chile.  On April 5, similar resources were needed in Baja and, most recently, the April 14 quake in China again meant that the disaster recovery teams were mobilized to provide assistance.  Talk about being stretched thin!  And, yes, there were different levels of response from the international community depending on the local government’s resources and need to seek help.  The point is that multiple disasters can create havoc on recovery plans if for no other reason than that “worst case scenarios” frequently stretch available resources beyond their capability.

This points up a common weakness in supply chain risk mitigation plans.  The typical approach is to prioritize the possible risks, estimate impact, and plan for recovery by taking each INDIVIDUAL risk in isolation.  If we accept the old saw that troubles always come in threes, the weakness of this approach is obvious.  And, even if there is little evidence to support the belief in the power of three, it should be clear that, if two breakdowns occur simultaneously (or even in quick succession) the impact can easily become exponential.

More importantly, have you assessed the impact on your disaster recovery teams if two or three catastrophes strike in quick succession?  The human impact of dealing with a full-blown disaster in your operations is quickly multiplied when people are called on to “do the impossible” several times in quick succession.  Fatigue alone can rob individuals of the ability to make good decisions, can degrade their physical performance, and can leave them feeling that they “just can’t do this again”.

Here are two suggestions.  First, do some noodling.  Call it “scenario planning” if you like but the point is, get some people in a room and discuss how you might react if risk “A” pops up while you’re in the midst of the recovery effort for risk “B”.  This will do two things.  First, it will help you get a handle on which risks may have the most synergy.  Second, it will give you a starting point that can prove useful even if, instead of “A” and “B”, you’re facing risks “F” and “G”.

Second, look at your recovery plans.  Do you have clear back-ups for every critical resource?  Are there key people who are called on for heroic levels of effort in virtually every risk mitigation strategy you have documented?  If so, how will you cover their activities if they are unavailable?  This is a frequent problem because of the tendency to create recovery plans for each unique risk without looking at their possible interactions.  Indeed, taking this step may help uncover previously unrecognized linkages between risks.  It is not uncommon to find that, while the independent likelihood of risk “A” is very low, that risk becomes a near certainty if risk “B” occurs.  Knowing that in advance is the first step to being able to respond properly.  And, it may alter your assessment of the importance of risk avoidance measures related to event “B”.

Has your organization addressed multiple risks?  Do you think this is an area that deserves more consideration in your organization?  What other strategies should be considered as part of the risk assessment process?  I’m looking forward to hearing from you.

Posted in News U can Use, Sourcing/Supply Chain - Lessons Learned | 3 Comments »