Imagine for a moment, you run a supply chain team. It’s 10:30pm at night, the office is dark, empty and cold. There’s one light on and it’s yours!
You are there because a customer in Asia Pacific has NOT got their product as promised.
You know that this customer doesn’t really like dealing with your company. Because after all, everything you have shipped to them in the past has either been late or damaged. (Maybe it’s because it’s crossed the equator multiple times and the heat has damaged the product.) The product probably wouldn’t have worked anyway even if it did arrive. You know that the company has even missed shipping orders completely with no communication.
Yet because you are new, you will not be beaten. You are simply there at 10:30 pm. Alone, trying to work it all out!
At some point, you start asking yourself a few simple questions:
- How can it be that everyone else, who is in anyway responsible for getting this product to the customer, has gone home? You even believe that your own team has done what they can but still the product has not been delivered to the customer. You know that this is not about laziness or lack of commitment, on the part of your team or anyone else’s.
- How can you work out what needs to be done differently next time, to ensure this customer gets their product? And furthermore, that this product is delivered on time, in full, accurately invoiced and intact! (Because apart from the embarrassment of non-delivery, your company cannot continue to make promises which it does not fulfill.)
- How do we lock in this new way of working and carry on at this new level of performance? How can we do it with reliability and consistency until the next ‘blip’ occurs? (Hopefully, we’d still be able review, correct, execute and adjust at that point.)
- What does the perfect order even look like? How do we make sure that when this order and every other order is fulfilled, we stick to a model of a perfect order – delivered at the ideal cost?
The solution here was an end-to-end supply chain process map. It made sure that everyone involved. knew what the cross-functional process looked like and their responsibility in this process. In my experience, I’ve seen such a solution take us around the entire globe. We went from two major manufacturing facilities in the U.S. and Europe to a slitting facility in Japan.
The solution included planning(information flows), financial flows and product flows. Furthermore, this solution ensured that every link in the chain knew what it needed to do, to complete the action especially at the critical handover points between functional silos.
At the same time, all KPIs were expanded to include completion of individual and group responsibilities per the supply chain cross functional process and linked to DIFOTAI. Suddenly, everyone cared about ensuring that every customer got their product. (And for those unfortunate customers that just couldn’t get theirs, the communication they received was at least improved substantially.)
Oh yes, and the value that was added? – customer service levels reached and exceeded their target levels, costs reduced because there was less expenditure on express air freight, lead times to all customers improved, inventory reduced improving cash flow, and this supply chain approached it’s ideal operating levels.
So, perhaps we could understand a few years ago, if a company had not systemised their supply chain. But why would corporations now, so late into a new century, not have already systemised their entire end-to-end supply chain? Why haven’t they, when the complexity grows as supply chains become increasingly global?
Here are my suspicions:
1. They don’t understand the importance:
- How else will you ensure that everyone in your organization knows their functional and cross-functional responsibility when it comes to DIFOTAI – the perfect order?
- How else will you ensure that the product or service is delivered consistently and reliably, in the same way, every time, until a new standard is achieved and that is then delivered consistently and reliably?
- How else will you determine where the pain points are and what we can do about them? Remember that the end-to-end supply chain is just like a sensitive ecosystem – you take action in one part and it affects the whole. Working on each individual part in sequence sub optimises the rest. You must work holistically!
- How else can you work out where you will gain the most benefit from placing your new ‘advanced technology’ solution? It could be anything from a demand planning and management tool, supply planning and balancing tools, artificial intelligence, machine learning, blockchain and/or robotics etc. How do you determine which one can optimally benefit the entire supply chain?
- How else can you end up linking ERP and IBP solutions like they are silver bullet solutions? All it does is strengthen functional silos at the expense of the cross-functional process.
- How else do you ensure that your acquisitions understand and adopt your processes (and just don’t go on doing things the way that they have always done them)? All this does is create multiple ways of ‘how we do things around here’ speeches. It drives not only separate processes, but separate cultures, leading to inconsistent, unreliable and suboptimal performance.
2. They don’t have the time:
- Here’s the myth: It will just take too long – We have just so much to do and you are asking me to spend more time doing something as basic as systemising – process mapping the supply chain.
- Here’s the truth: Systemising the supply chain will save you and your team significantly wasted effort.
3. They consider it too basic:
- Here’s the myth: This is for basic supply chains and small businesses. Our supply chain is too complex to systemise.
- Here’s the truth: All the more reason to do this ASAP!
4. They confuse it with using paper and post it notes and deem it old-fashioned and outdated.
- There are new tools and techniques available to speed up the process. There are new tools available to capture your system and provide a structure for you and your team to follow. These tools are easy to use and engage your entire team in the creation of these processes. Not only that, but they also assist in further development of the processes to drive continuous improvement.
- There are many ways to systemise your supply chain. (We ourselves offer three separate offerings to assist you in this regard).
5. Their leadership does not have a vision for the future:
- They’re apparently all too happy to work on the day-to-day every day, and have their resources wasting their lives on fixing the day-to-day everyday!
- They don’t fully understand that a vision is built on a solid foundation of reliable, consistent and cost effective performance.
6. Their leadership has not been consistent and have not made the decision to empower someone and let go:
- Instead, they have created a culture of ’I am indispensable and no one can do the job as well as me.’ Is this really the culture you want to build in your supply chains?
- We desperately need knowledgeable resources, not stuck in fixing the same things every day. This knowledge begs to be utilized in the creation of new and innovative solutions to the age-old issues which are still pervasive in our supply chains today. It’s time to start building the supply chains of tomorrow! There is so much more work that needs to be done. We could be well-occupied in areas such as continuously improved systemizing, network design and redesign, network optimisation, M&A, post-acquisition integration to name a few. (Note: I will be releasing more blogs will follow on these important next steps. If you need more information, just click here!)
7. They left it to the team to work it out for themselves:
- Here’s the myth: Surely the teams can organize themselves better than we can, right?
- Here’s the truth: They cannot because if they could, then they would have worked it out by now. (This is about working on the supply chain not in the supply chain, and cannot be fixed from the inside.) Your team will need more help to get this done, including change management, organizational positioning and support from the top. The right expectation is that they will be self-monitoring and self-reporting, developing their self-awareness when it comes to systemizing their supply chain.
8. Their supply chain has been systemised, just not being used:
- Suppose your team has already been empowered to do this, and everyone already knows their roles. So, are you hitting all your customer-related KPI’s every time with no issues? Are you hitting your delivered cost KPIs every time with no issues?
- If they have done it already, then we have to make sure that the process maps aren’t just on the proverbial shelf gathering dust and not being used.
Can you say, hand-on-heart, that everyone in your end-to-end supply chain knows what said supply chain looks like? That they understand their critical role in making sure that the chain does not break? And even in the event that it does and a new higher level of performance is required, can you be sure that everyone will know exactly what to do then?
Click HERE if you need more information on our offerings in terms of systemizing your supply chain. You can also make an appointment with Lisa HERE! We look forward to supporting you and your team in this important work.