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. Try implementing Lean in the Back Office.
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.
So why is it so difficult to implement, and sustain, a Lean program in the Back Office of your organization?
We had completed value stream mapping the current state processes across some very significant business processes in the company. It took a fair amount of time even though we had the active involvement of subject matter experts and leaders from every functional organization.
When all was said and done the current state involved hundreds of process steps, almost 200 pain points, and dozens of iterative, repetitive loops. The company was just being introduced to Lean process improvement techniques. And as challenging as it was to reach a common understanding of what the current processes were the difficult part was about to start.
A High Performance Organization is one in which there is tremendous alignment among and commitment by the team members. And as a result this motivated team is able to achieve superior results. The level of collaboration and innovation they demonstrate is remarkable. But what are the ground rules?
There are many characteristics of the culture which allows such teams to be high performing. And when they set out to drive change and make improvements it is those cultural characteristics which allow them to succeed.
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.
This project involved every employee, every function, and every process in the company. We needed a simple way to prioritize all of the projects that we were about to undertake.
“The Board is REALLY upset. They want a plan to dramatically improve our Supply Chain inventory turnover performance and they want it now. Will you lead this for me?” That was a call to action.
My boss had just got out of the Board meeting and these were his words to me. The company had historically performed very poorly in managing inventory. And it was not only consuming a lot of cash but it was impacting our profitability with the high carrying charges and write-offs. Also it impacted our competitive position as customers and competitors didn’t believe we knew how to manage inventory, and Supply Chain, very well.
“We are a Supply Chain Services Company,” I was told.
“If we are truly a Supply Chain Services Company, then why is our Inventory Turnover only at 7?”, I asked.
I had just joined the company and in studying their financial performance it stood out to me that if we were truly a Supply Chain Services company then having only 7 Inventory turns was extremely uninspiring.
We needed to be dramatically better at managing Inventory to convince ourselves, and our customers, that we were a trusted and leading Supply Chain Services partner. Could we double inventory turnover?
Pain points are a part of business. They create opportunities to innovate, diversify and grow. Without customer pain points, there is no reason to be in business. Trading goods and services is as old as mankind itself.
“Global Process Excellence™” was to be the platform on which we would propel the company’s Operations upward toward Best In Class status. Our Call To Action objectives were clear:
We had a clear requirement to improve our profitability
We needed to respond to customer expectations for increased value and a consistent, exceptional customer experience in all Distribution Centres
We needed to lean out the operations and improve our productivity
We needed to create Best in Class capabilities
We needed to enable profitable growth on the back of an enhanced Operating model, capacity and capabilities
And we needed to unleash the tremendous experience and expertise that resided within our employees
Now we needed to formulate our Roadmap: the Approach, the Mandate, a set of Ground rules, and a process of Governance to bring together everything that would now be called Global Process Excellence™.
How many people make a New Year’s resolution to adopt a Lean program and “Lean” yourself out only to abandon it shortly thereafter?
One of the top New Year’s resolutions is to start exercising. In January the local gyms are filled. But by February those gyms are much emptier and many of those well meaning people are still at home.
What do you do when your Lean program at work suffers the same fate? How do you know when your improvement program needs to be improved?
Many a project starts off with very lofty objectives. And with a lot of work and a little luck those desired results are often achieved. In every case those results usually have been achieved within a certain timeframe and with a lot of momentum.
Yet once you achieve those goals in many respects the energy and momentum which got you there may start to fade. Yet your work has just begun. The next question that always comes up is whether you can sustain, and further improve, those results.
Additionally if you are trying to drive Cultural Change and long term transformation after a while your initial project may become stale and your participants demotivated or distracted.
To avoid your project becoming “just another program” you need to proactively recognize when your project needs to be reinvented or rebooted to avoid irrelevancy and the back-sliding of your results.
The Supply Chain touches all of our lives whether it be in business or personally. No matter what industry you are in or are touched by, all involve the movement of goods, services, and information. So the most efficient functioning of the Supply Chain affects us all. And it affects us in every aspect of our lives whether we are consumers, employees, or business leaders.
With a career spent in Supply Chain I’ve seen many ways of performing the processes involved in managing the Supply Chain. Many of these processes are highly efficient. Yet many more are highly inefficient. Regardless, everyone strives to improve the way things are done. And every experience has been an opportunity for growth.
In this blog I’d like to share my experiences, and those of others, in improving, working in, managing in and being managed by the Supply Chain.
There have been some remarkable achievements and there have been some missteps along the way. However there are lessons to be learned and experiences to be shared in every case. And I hope that this learning and shared experience will be of value as you seek to improve the Supply Chain you are a part of.
On top of that we want to share anything and everything related to Leadership, Change Management, Technology, Procurement, Purchasing, Distribution, Logistics, and much, much more.
Overall Supply Chain Game Changer can serve you as a guide as you do your jobs and as you progress through your career. The issues and challenges that you face will be different for everyone on any given day. There is something for everyone in Supply Chain Game Changer.
Additionally I invite you to comment and send me content. By learning, not only from successes but from failures, we will all be better going forward. There is a wonderful world of people and experiences that we can all learn from.
So again I welcome you to the Supply Chain Game Changer™ blog.
“I’d like you to join our company. One of the Projects you will lead is our ‘Productivity Initiative’ unless you will be naming your project. We need to transform all of our business processes and culture and improve our efficiencies everywhere.”
Wow! What a great challenge and opportunity to make a difference. But calling it the “Productivity Initiative”? That was as inspiring as watching paint dry or grass grow.
“I’ll do it! But we need to give this Project a NAME. A NAME that will inspire people, motivate people, and capture the essence of the change and cultural transformation that we are looking for. And this can’t be an ‘Initiative” … it has to be an ‘Imperative’ … this is not optional … we have to transform the business and we need everyone to rally around our cause!
You have determined that something has to change in your company! Customer satisfaction may be low. Employee morale may be in the dumps. Financial results and operating performance may be falling far short of your objectives. You need culture change!
Or maybe you don’t have any of these problems. But you view that your company is performing well now yet it is not well positioned to go to the next level and be successful in the future.
Or it could be any combination of these pressures. Whatever the reason, you have come to the realization that the culture of your company must change to get the results you need!
The nature of the results you are trying to achieve will determine the type of change you need to create and the work stream to make it happen.
If you are making changes to a very small part of your job then your focus is very localized. If you are leading a project solely aimed at achieving a specific result then your change management focus is somewhat larger. But if you are leading a business-wide long term transformation then you need a comprehensive Change Leadership work stream and strategy.
While there are similar elements in driving change at any of these levels, the broader transformation requires a well thought out, well articulated Change Leadership program to be in place to lay the foundation for, and govern, your transformation.
My first Management job was on the Manufacturing floor on 3rd shift. It was company policy … anyone’s first Management job was in Manufacturing. The principle was sound: to really understand how the business operated you needed to be at the very core of what it did, which in this case was Manufacturing. Only then could you really learn the business and how to work with people.
So as I started a new job further along in my career, with responsibility for Distribution Centres around the world, I knew that I was not going to learn what I needed to know from behind a desk looking at Powerpoint slides with pictures and statistics. I needed to go to each and every facility and learn about the operation right from the floor.
