Visit Our Sponsors
What makes some supply-chain transformation projects achieve corporate goals while others fall short of expectations? Two veterans of numerous high profile projects agree that one mark of success is investing ample time and energy up front.
"Much of the most important work on complex supply chain projects needs to be done before a single dollar is spent," says Ken Mullen, senior managing partner at enVista Corp. "A lot of organizations tend to see technology as a panacea, but we believe that perhaps half of the opportunity comes in looking at processes and asking the right questions before technology ever enters the picture."
John White, president of Fortna, agrees, citing "clarification around the business case," as his most important predictor of success. "This means understanding the full breadth of the change being undertaken, the resources required to execute and the measurable outcomes," he says. "Too often companies focus on information systems or the materials handling equipment to be installed and lose sight of all the implications that those changes will have on people, processes and risk."
Once you have clarification around the business case, it is important to build out that case in detail, including costs and timeline, White adds. "In any company today, people are competing for investment dollars across many projects, so showing that you can get the best return on invested dollars is very important relative to justifying a project and being able to move forward," he says.
In trying to justify a project, however, don't make the mistake of "trying to fit a square peg into a round hole," says Mullen. "It is not uncommon to see customers who already have a piece of technology and who want to find a way to make that technology solve their business problem. We believe the right approach is to design a solution to the business problem and then find the technology to support it. Then you don't purchase the wrong technology and you get more value out of what you do purchase."
Another key to success is to make sure that you get your best and brightest people involved, that you empower them and make them accountable, says White. "The consultants and outside partners will go away at some point, so making sure there is ownership within the organization from the best people with the best ideas is critical," he says.
There always is a lot of energy at the start of major projects, but it is important to build in sustainability procedures to protect against diminishing returns, says White. "Often business cases anticipate returns several years out, but companies don't set up a tracking mechanism to see if projects continue to meet goals - and without tracking, they usually don't."
"The temptation is strong to come up with a very simple mathematical calculation, where if you spend this much, you will save that much and you have your return on investment. But you have to measure the time frame in which you will be spending capital against when you can realistically expect to start seeing savings," says Mullen. "Then you have to look at the type of savings you will see and the added benefits that can be reaped after the initial savings. Looking at this and setting the right expectations up front is very important."
To view video in its entirety, click here
Enjoy curated articles directly to your inbox.