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Supply Chain is in Throes of Transformation
Richard Sherman, Senior Fellow, Supply Chain Centre of Excellence, TCS [NSE:TCS.NS]
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Is your Supply Chain Ready for a Transformation?
By Darrell Edwards, SVP & Chief Supply Chain Officer, La-Z-Boy Incorporated [NYSE:LZB]
Why Are You Changing?
“You can’t hit a target you can’t see”. I don’t know who said it first, but I believe no truer words were ever spoken as it applies to a supply chain transformational journey. You should ask yourself, what about your supply chain needs changing, and why? What new capability or increased value will your supply chain create as a result of this transformation? Change is hard, but it is incredibly hard if the entire organization is not fully aligned; pulling in the same direction. The uncanny ability to marshal organizational support, top to bottom, increases your probability of success, and knowing what to target is an alignment imperative. The entire organization needs to understand what success looks like and should know not only how they can help to achieve it but also how it affects them personally. In addition, when I say the entire organization must understand, I mean not only the supply chain, but also the greater organization beyond your team, including your boss too. Your supply chain team’s goals must extend beyond its boundaries, aligning to the greater organizational goals, and the entire organization must not only know change is occurring, they must know why.
Can You Create a Compelling Need to Change?
In terms of a catalyst for change, probably the two of the most important transformational questions are… why are you changing and what is the benefit (previously discussed), but the other equally important question to be answered is, can you create a compelling need to change; does a rally cry for change exist?
Before undertaking the rather daunting task of a supply chain transformation, be sure to consider the readiness of the entire organization
As we said, even under the best of circumstances change is difficult, and if the supply chain does not see the benefit of change, the success proposition is greatly diminished. It is your job as the leader to create the compelling need to change, to craft a transformational vision, that when cast, creates hope that tomorrow will be better than today; and the journey is worth taking.
Working to engaging your team’s hearts and minds helps to create maximum alignment. By the sheer nature of the supply chain function, engineered standardization and process is in it’s DNA, but process, as good as it is, only gets you compliance, albeit very good compliance. Excellence lives just beyond compliance, and excellence is achieved through complete team engagement, which requires you to go beyond the needs of the organization. The compelling need to change, that greater purpose, cannot be only about the organization, it is bigger than that; it must transcend the organization by meeting some other greater need. Perhaps that need is providing employment for the local community, or making the environment better, or well, you get the idea. To create a compelling need, remember, it is not only about the supply chain or about the organization, it is bigger than that.
How Will you Know you are Winning?
Part of creating a case for change is understanding why you are changing; why the current supply chain is not creating a distinct competitive advantage, and what can be done about it? This seems like common sense, but surprisingly, as Stephen Covey once said, “common sense is not always common practice”. Maybe a deep dive into the supply chain’s central nervous system (the core) will offer compelling insights. Whatever the outcome after the diagnostic; is how you will know your transformation is successful or not. In other words, whatever needs improving is what should be measured if service improvement is an imperative; then measure it. If it is quality or cost that needs improvement, measure it, or maybe asset management needs to improve, and so on. Benchmark a best-in-class basket of aspirational-type organizations and this should offer clarity of what should change, by how much, and when measured, will determine if you are winning or not.
Before undertaking the rather daunting task of a supply chain transformation, be sure to consider the readiness of the entire organization, not merely the supply chain, I mean the end-to-end enterprise. Ask the question: ‘Is there a compelling need to change, a change big enough the entire organization can rally behind?’ We know change is difficult, but transformational change can be tough, and try as you may, a supply chain transformation cannot be confined simply to the supply chain, the entire organization will feel it; and when done well, subsequently feel the benefit too. A targeted clear line of sight (also known as alignment) is a must, and as such, the degree of pain, or success, is very relative to alignment. As everyone pulls in the same direction, organizational magic occurs. Be certain, with no ambiguity, that the goal for your supply chain is clearly defined and over-communicated to the organization. To be clear, a supply chain transformation is really a must if your organization is to remain a long-term, relative, value creating enterprise. So, perhaps the ultimate question is not if, but when will the transformation occur, and it is leadership’s responsibility to decide if your supply chain is ready.