There's a big difference between actual supply-chain transformation and simply making incremental improvements, says Roddy Martin, senior vice president of CCI. For major companies such as Du Pont, Procter & Gamble and Coca-Cola, transformation entails fundamental change in the organization. It calls for much more than making small improvements within traditional corporate "silos."
"Transformation is when the business from the top down thinks and behaves differently," says Martin. "It's disappointing when companies misuse the term. It's consulting-speak all over again." The effort requires a clear mission set forth by upper management, and strict alignment of processes throughout the organization in order to ensure proper execution.
Making matters more complicated is the ever-shrinking tenure of top executives. Often the departure of a chief executive officer brings an end to that individual's efforts to transform the organization. Martin says companies can avoid this pitfall by making sure that the program is solidly in place, and designed to outlive the senior executive who started it.
Effective transformation requires great leaders, says Martin. They reject long "mission statements" in favor of "very simple galvanizing principles." Procter & Gamble, for example, pursued what it termed "two moments of truth," in its effort to eliminate billions of dollars worth of stockouts. Du Pont stuck by its decision not to outsource key processes. And Coca-Cola focused squarely on growth and brand.
A typical corporate transformation is no quick fix. A decade or more is not unusual. P&G's took at least 14 years, says Martin. "This is not something where a company wakes up and says, 'I want to see results in six months.'" But executives should celebrate short-term wins along the way, in order to keep up enthusiasm for the effort over the long term.
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