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Change is Inevitable; Growth is Optional

Analyst Insight: Combining supply chain analysis and consulting topics is more logical than you think. Best practice/market leading companies regularly use outside consultants. When you look at the roll of consultants' clients, it includes all the leading companies. Leaders know that to innovate, they have to 'break the rules" – extending beyond status quo. They know that analyzing and improving supply chain process performance requires full-time commitment and expertise – to look at processes from the outside in.

Change is Inevitable; Growth is Optional

The first chapter of my book is: “Change is Inevitable; Growth is Optional.” At Trissential, we not only believe change is inevitable; we believe it is ongoing. Transformation is not an event; it is an ongoing journey in a world of change. If we managed change as well as it is documented in the press, the performance gap between Leaders and Laggards would not be so wide.

Successful process improvement is a three-legged stool. First, process improvement is a program with ongoing projects. Program/project management is a discipline to be learned and mastered. Projects can’t be managed part time; they require dedicated FTEs to manage a program office or projects. If you lack the FTE resources, then use consultants to supplement your staff.

Second, projects must include the people who do the work. Admit it: people go outside “accepted” processes all of the time. They have their own spreadsheets and firefighting tools/techniques. They make the process work. They are the best resources to define “as is” and suggest “to be” processes.

Third, improvement projects require subject matter expertise beyond internal practice. Your SME resource can be staff members who routinely conduct industry/competitive research, attend trade conferences, and/or benchmark. Otherwise engage consultants.  Don’t expect the people who created and sustain the process to suddenly discover how to change it. Challenge existing processes to break the rules and innovate.

Surprisingly, many companies try to serve their customers and manage their supply chains generically. Most companies offer different products to different size customers operating in different segments of the market. Each customer/segment should have different service requirements. Over-serving market segments is costly and doesn’t satisfy the customer’s requirements. Defining your supply chain segments is critical to developing strategy, metrics and process improvement initiatives.

For example, P&G recently adopted Service As Measured By the Customer (SAMBC) as its service metric, recognizing that not all customers used Perfect Order Fill as their metric.

Segmentation analysis enables you to align the performance metrics required by each segment and set performance baselines that can be analyzed and benchmarked to identify gaps and set improvement priorities. Benchmarks can be obtained for no charge by submitting your data to APQC.com. Leaders often leverage consultant resources to collect industry and competitive benchmark data.

Your market and company are constantly transforming:  Leaders choose to transform intentionally and systemically to capture opportunity and share.  Laggards transform unintentionally, absorbing the pain from the change set by the Leaders. It’s your choice; if you align strategy, metrics and performance analysis to your process improvement program, you can identify resource constraints to achieve your objectives and supplement your staff appropriately.

In 2014, expect to see supply chain managers adopting more supply chain analytics to identify process performance improvement programs. As economic and competitive pressures mount and supply chain management becomes a regular topic in the C suite, continuous process improvement initiatives will be mandated. With limited staff resources available to commit to the initiatives, executives will look to consultants to provide the specialized skills and expertise to supplement their resources to accelerate results.

Source: Trissential

Keywords: supply chain planning, supply chain analysis, supply chain management, BPM, supply chain innovation

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