Paul Bohr, Chief Transformation Architect
Emerging Expectations for Executives
Supply Chain Transformation
Transformation has become one of those overused words that has lost its ability to grab our attention. It is used freely in many situations to mean many different things. A good working definition for a supply chain executive is to deliver significant performance improvement in a short period of time. What a short period of time is in today’s organizations continues to shrink, and now expectations typically range from a six months to a year for delivering significant results.
Expectations for significant results are typically defined as delivering improvement in strategic outcomes that can be measured in growth, increased margin, innovation, strategic capabilities, and sustainability for a profit-driven enterprise. For a mission-driven enterprise, it is availability, affordability, surge, mission capabilities, compliance, and sustainability. These expectations require a supply chain executive to be very adept at translating day-to-day supply chain priorities, decisions, and performance into enterprise outcomes the entire executive team can understand and support.
Many people in supply chain organizations see the supply chain only as the daily transactions that they execute in planning and order management, or the continual crisis management when things don't occur as planned. Capabilities development implies focus not only on the improved physical flow of products and services, but the ability of the supply chain team to respond to bigger transformational questions of identifying and capturing opportunities for improvement in the scope of the end-to-end supply chain. It also requires a change in the approach to executive development. Lately, organizations are getting frustrated with education programs that don't show visible application, and traditional consulting that implements solutions that are not understood or sustained. These issues have organizations searching for applied learning programs that introduce new concepts, then provide the collaborative events to immediately apply the concepts and deliver results.
Collaborative Event Facilitation
Most supply chain executives have learned leadership as they progressed upward through functional roles. Administrative leadership of that type typically emphasizes decision making by individual authority and decision escalation rules, and focuses on maintaining discipline through job descriptions, policies, and task assignment. Aligning priorities and delivering performance improvement in the end-to-end supply chain requires more collaborative leadership that emphasizes facilitation of cross-functional teams, customers, and suppliers. Collaborative leadership of this type emphasizes relationship development skills, influence, change management, and the ability to plan and facilitate collaborative events. Success in accelerated transformation requires the supply chain executive to personally perform this facilitation role that has been traditionally assigned to organizational dynamics professionals. Only a Supply Chain Executive can architect solutions that require respect, credibility and simultaneous knowledge of priorities, perspectives, opportunities, and methods for performance improvement.
One of the biggest challenges a supply chain executive faces is development of the functional executives’ perspective of the end-to-end supply chain, and their leadership of improvement actions beyond their authority or direct control. Improvement and sustainment of supply chain performance cannot occur without this understanding and ownership. Establishing the collaborative events and chartering of the new end-to-end leadership roles and responsibilities is a critical step in transformation.
Governance of E2E Performance
The capability for Governance of End-to-End Supply Chain Performance is one of the most sought after capabilities in today’s organizations. Almost every supply chain maturity model has a line item for this and it is almost always the lowest score in the assessment. As they say, "if it were easy, everyone would be doing it". Establishing effective governance of performance requires the integration of everything already noted in this article, plus much more. Having a team capable of such perspective and leadership is the game changer for most organizations. In my experience as a senior supply chain executive and transformation architect, governance offers the opportunity to "Pull it all together". No more separate and unrelated meetings on finance, quality, strategy, customer and supplier management, discipline, risk management, or project portfolio. Organizations who have taken this approach have reduced their executive review meetings by at least 30%, and are capable of competent end-to-end executive supply chain reviews in less than two hours. Realistic expectations for such a governance team include development of cross-functional ownership, a demand-driven, outside-in perspective, real enterprise intelligence, a high performance culture, and an integrated performance improvement plan.
Real enterprise intelligence is not something the information technology department can provide you. It is developed and earned by the governance team itself. Real enterprise intelligence is developed by the leadership team defining strategy, goals, and forecasts, then linking their priorities with enterprise processes, controls, and leading indicators. Build upon that knowledge with the strengths of technology in ERP systems and Blockchain to provide better visibility, and the predictive analytics of Artificial Intelligence to support proactive decisions and actions. With a little practice (typically within 120 days), the team becomes very effective at delivering intuitive decisions that proactively drive performance improvement.
Accelerated Change Management
Change management is another subject that has been around for a while, but never seems to get applied effectively. Two of the major reasons for this lack of effectiveness are starting too late in the transformation effort, or application at too high of a level. My standard for successful transformation has always been to go to the lower levels of the organization and ask if their perspective or daily habits have changed recently. It is only then that you know you are succeeding. The change management model itself needs a little revision. Most models in use today focus on selling a solution rather than developing capabilities. The development team found it necessary to add another step for successful transformation. In addition to the traditional steps of awareness, understanding, and adoption, we added another stop of demonstrated capabilities to assure change management continued until solutions were understood, owned, and sustained.
Leveraging Best Practices
There always has been a "silver bullet" mentality to operations performance improvement that has led to high expectations and eventual disappointment with each new concept and technology. The idea that one concept alone will provide all the answers to our performance improvement needs seems a bit far-fetched, but look at how we have utilized ERP, Lean Six Sigma, Enterprise Intelligence, SCOR*, or now view Blockchain. The reality is that each of these has strengths that need to be integrated with others to deliver end-to-end supply chain transformation. ERP provides control and visibility. SCOR provides a framework for strategy, alignment, and focus. Lean Six Sigma provides a process improvement methodology and customer focus. Other best practices such as Demand Driven Maturity, Tailored Supply Chains, Business Intelligence, Change Management, Project Management, and Risk Management all have their strengths that can be integrated into a step-by-step playbook that can be confidently and consistently executed.
High Performance Culture
Establishing a high performance culture is on everyone’s list of necessary improvements. The reason it is so difficult to achieve is that it can only be created through example of the leadership team. Setting the example for a high performance culture can be successfully done through the governance team by leaders making commitments to each other (personal contracts) to exhibit and monitor their own behaviors and radiate those to the organization. You don’t have adopt all the behaviors at once (there are eight in total), but you can select one or two at a time and progress at a respectable pace.
Some of the biggest performance improvement opportunities exist beyond the "four walls" of your organization, and can only be captured through collaboration with customers and suppliers. This kind of proactive collaboration cannot begin with reactive day-to-day problem solving or infrequent contract negotiation. It must begin with collaborative events that discuss aligned priorities and real opportunities for win-win improvements. Successful execution of this kind of business-to-business relationships requires the highest level of executive event planning and facilitation. There are 32 facilitation strategies and techniques in the transformation playbook that supply chain executives can learn and apply to support confident and successful collaboration.
Integrated Action Plan
Restating our earlier theme of "Pull it all together" we come to the critical step of developing a leadership action plan. One integrated plan for each supply chain. Informed by the school of hard knocks (in some cases, can suggest what not to do), I have come to the understanding that there are only three types of performance improvement actions available to a supply chain governance team.
1. Discipline - When the enterprise already has good structure and process but don't consistently execute.
2. Risk Mitigation/Management - When the enterprise recognizes a problem that cannot be controlled.
3. Performance Improvement Projects - When structure or processes need to be redesigned.
The integrated action plan is a natural output of the governance team and provides the effective leadership focus and follow-through in priorities and resourcing of actions to assure success.
Delivering transformation as a supply chain executive is one of the most challenging roles in industry or government. Many of us have watched the progression of supply chain thinking from its basic origins to the advanced and more complex profession that defines expectations of today’s supply chain executive.
The future for supply chain leadership is very bright for those who prepare for it. The application of one or all of these critical leadership competencies could make the difference in delivering successful supply chain transformation for your enterprise.
*SCOR is a registered trademark of ASCM