There are a myriad of variables and factors which affect your ability to achieve your objectives. Deciphering this complexity to determine what is important to measure is critical for driving improvements and change.
As with many aspects of your business there can literally be dozens and dozens of different metrics. The same is true in sports. So if you are trying to drive breakthrough results in your company or win on the field how do you determine what is important to measure?
The Supply Chain team was generally viewed as lacking in skill and capability by those outside the organization. Customers and other internal functions viewed Supply Chain as a dysfunctional organization as evidenced by the poor Supply Chain performance metrics. And external benchmarking placed our Supply Chain last amongst our competitors.
Inside the Supply Chain organization there were a lot of very smart people. But there was no trust, teamwork or synergy. The culture was one more of complacency than of trend setting. And there was a lack of inspired leadership.
The company I had just joined was nearing the finish line on the implementation of a new WMS system. They had been working on the system change for a few years. Now implementation was only a few months away.
As the implementation date drew closer one of the key Warehouse management leaders, heading the project from the beginning, left the company. We forged ahead and implemented the system on April 1st. That’s right, April 1st!
Implementing a Lean program on the Manufacturing floor, in a Warehouse operation, or in a Distribution Centre is challenging enough. There are a series of process steps in which materials are transformed or moved in some fashion.
And your Lean program has at its core the objective of making these operations as efficient as possible. But when you try to apply these same Lean principles to the support organizations, or the back office, you are likely to experience a wide range of reactions.
We had the “Call To Action” from the CEO. The business needed to be transformed to support growth. And the business needed to be financially stronger and much more productive.
With the mandate established we had named the change initiative that we were about to launch. We had enlisted leaders from every functional organization. And we had began to roll out our communication strategy.
The theory is simple! If you can increase spend levels through centralized spend aggregation across entities then you increase your leverage in negotiations. This leverage should translate to lower costs and better terms and conditions.
These entities may be different departments or facilities within your own company. They may be different companies under common ownership. They may be disparate companies within an industry. Or they may be unrelated companies spanning many industries.
The benefits seem clear. So why is there so much resistance when it comes to trying to aggregate spend across these entities?
How many times have you been asked to cut costs? How many times have you been asked to cut costs so deeply that it is beyond your comprehension?
In those situations you can always use the Brute Force method. Hacking and slashing resources and expenses in this way often compromises the very capabilities, skills, morale and services that are keeping your company afloat in the first place. But it can be quick.
But if you have the chance to deploy a proper Change Management program to drive the cost reductions or other improvements that you are looking for then you may have many more constructive opportunities in front of you.