Author Archives: jadetrillium

Defining Supply Chain – Part 1

tilesAll areas of a business break down into one of two groups – Strategic or Tactical.  Most people understand the difference between the two.  To use a very broad brush, Strategic is why we do things and Tactical is how we do things.  An organization will start with an overriding strategy which then breaks down to departmental strategies (marketing, production, financial, etc).  These departmental strategies then start breaking down to tactical decisions on how we will achieve the strategies chosen.  As an example, if an organization chooses a “make to stock” strategy to supply their customers, this will inevitably lead to tactical decisions on how much stock, where it is stored, etc.  Those areas of an organization that deals with strategic decisions tend to pay more attention to the bigger picture and the longer time frames.  As we move into the tactical areas the vision starts to get more detailed, more short term and definitely, more myopic.  This “myopia” is one of the major problems organizations run into.  As each department concentrates on their issues, tactics and processes they risk losing sight of the larger strategies and, more importantly, they risk developing conflicting goals with other departments within the organization.  Once different pieces of any organization starts working toward different goals, communications between groups break down and it becomes impossible for the organization to be as effective as possible.  This lack of communications and the risk of conflicting goals is creating a need in modern organizations for someone to stand back & look at the big picture.  To ensure everyone is aligned together with the overarching strategies and to work with those groups that are drifting away from solidarity within the larger organization.  That need is what has given rise to the modern concept of “Supply Chain”.

Now before you start throwing things at me, let’s segue off to the side for a moment.   One of the overriding characteristics of modern times is the shift to specialization.  If we look back 100 years or more, everyone admired what was known as a “Renaissance Man” (also known as a Polymath).  That is, someone that had a background and knowledge in many different areas such as arts, math, science, etc.  Historically, it was perceived as desirable to have a wide-ranging background and look for the linkages between each of these disparate bodies of knowledge.  Over time though, as our knowledge, and more specifically, as the amount of detail in each area has increased, it has become difficult for one person to learn many unrelated areas of information.  People needed to specialize in order to understand and move forward in their area of expertise.  Due to this trend we have become a culture of specialists that are enamoured with details and rarely look up to see the bigger picture.  This, in turn, has led to a need for groups of people that specialize in the big picture.  One of the best analogies I have ever heard for what Supply Chain does was told to me by Dr Jack Bacon.  He is a Futurist (talk about a specialist in the big picture) that I met at a conference a couple of years ago.  His analogy was… a tiled wall.  Each tile represents a specific specialty but they do not interact directly with each other.  Surrounding them is the grout that separates and connects them all together.  That grout represents the communications links between each specialty that ensure that they all achieve the stated goal.  To put it another way the grouts specialty is connectivity.  Supply Chain serves the same role – if each of the tiles is a specialty such at finance, production, HR, procurement, logistics, etc. then Supply Chain is the grout, connecting all the groups together and ensuring that each group gets, and delivers, what they need to make the larger organization successful.  To tie these two concepts together, in a culture of specialization, the Supply Chain group specializes in the big picture thereby insuring proper communications and cooperation between each of the other specialized groups, include both vendors and customers.

So what does that mean in terms of what functions and tasks that the Supply Chain people do?  For that you will need to wait for Defining Supply Chain – Part 2.  In the meantime, take a moment and think about what a culture of specialization means for you and your organization.  Do you have the proper tools available to deal with both big picture and little picture issues?  If not, what should you be doing about it?  Jade Trillium Consulting has expertise in both sides of the question and would be more than happy to talk to you about how to ensure a balanced approach.

WHY DO CHANGE PROJECTS FAIL?

pyramidI am forever seeing posts that pose the same question – Why does _____ fail?  You can fill in the blank with pretty much anything, 5S implementation, Continuous Improvement, Culture Change, ERP Implementation… It really doesn’t matter what program you are talking about, they all represent change and many change programs have a bad habit of failing or backsliding after some initial successes.  The question is why most of them fail with time.  Obviously enough people thought that they were worthwhile enough to justify the cost, time and pain of initiating whatever program we are talking about.  The easy answers are; that management and/or the rest of the company did not support the program; or people do not like change; or there wasn’t enough discipline to stick to the program; or…pick your own excuse.  The bottom line is still, the project failed over time as the organization slid back to the old way of doing things and THIS IS NOT ACCEPTABLE.  If a project is worth doing, it is worth ensuring that we keep the gains and, preferably, move on to greater gains as we add to the process improvements.  (Note – I said add not replace.)

Obviously this is easier said than done or people would not be talking about this as a problem.  So how do we make process improvements or organizational changes “stick”?  In terms of avoiding backsliding from any gains, there are two critical aspects to any process change that tend to be overlooked or misrepresented.  One is participant value and the other is systematic measurement.

VALUE

When I talk about value I am not talking about the value to the company but rather the value to the individual.  When the project was first discussed and agreed to, it was justified by it cost savings or service improvements or some other value to the organizations bottom line.  While this is important, most people are not excited by the bottom line and anything else that can improve the bottom line will tend to distract those that do get excited.  By value to the individual I mean just that, what is it about this project that will improve each individual’s life.  It does not need to be the same value to each individual but the only way to get a person to buy in, and get excited about change, is for there to be something in it for them.  (We may make jokes about WIFM but it is a major driver for most people.)  When we are deciding on, design how, presenting, working and evaluating, any project we need to consider what the advantages are for each individual and how to ensure they are aware of, & agree to, these values.  If people do not see and understand the value to them, they will not make a commitment to live the change and to keep at it even after management attention moves on.  An example of this would be a 5S Implementation.  Most people see this as just a clean-up project and so, over time the affected area starts to back slide.  But this is not just a clean-up project.  It has two main objectives, to remove the clutter which enables people to work more efficiently and, more importantly, to determine what was creating the problem in the first place, then resolving the problem.  It is this problem resolution that is the best way to keep this type of project from backsliding but the value to the workers in the area are, among other things, easier movement, better safety, less time hunting for tools, parts etc, plus a more comfortable work environment.  It is identifying and selling these benefits that get the individual excited and committed, not something like it decreasing costs by some specified percentage.

MEASUREMENT

The second critical aspect is measurement, or, more specifically, building the behaviour needed into people’s objectives and Key Performance Indicators.  People pay attention to what their money is tied to.  Sticking with the 5S example, an objective should be added to the people affected that the area stays organized according to 5S principles and a KPI instituted that actually measures and reports adherence.  This can be anything from a Qualitative Assessment, to a regular checklist.  The method does not matter, just that there is a measure that can generate a pass/fail on the objective and thereby affect raises and bonuses.  For this to work it is also critically important that the objectives and KPI’s be at all levels of the company, not just the people on the floor.  Supervisors get measured on their people’s compliance, managers on the supervisors and on up to the C level people.  This builds a compliance pyramid and a pyramid is one of the strongest possible ways to organize anything.

The bottom line when it comes to change management is that most of these change programs are journeys not destinations.  There is no end to the program though the direction may change periodically.  We don’t want to replace previous programs.  We want to save any good points, nurture them along and grow new improvements on the roots of any previous successful improvement implementations.  You cannot do that without strong roots to start with

Having issues with project initiatives?

When it comes to projects, process improvements and change initiatives there are really only a couple of factors that cause the difference between success and failure.  They may be basic things but they are absolutely critical.  Those factors are Value, Training & Education, and Measurements (KPI’s).  You need to pick projects that have true value to the company and everyone in it.  You need to train people properly on how to implement and maintain the initiatives.  Finally, and probably most importantly, you need to build support into the organizations objectives and measures or any benefits will slowly fade away over time  If you need help understanding and getting implementing your process improvements contact Ed White at Jade Trillium Consulting to discuss whether we can help your organization and how best to proceed.

Hope you enjoyed this posting.  Talk to your friends and co-workers about their experience and thoughts on this topic, especially what it means for your organization.   And, as always, I would love to hear back on your (and their) thoughts.  Just fill in the comment box below along with your contact information to let me know what you think.