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A value management program is an important tool for keeping a supply-chain planning transformation initiative on track, says David Joiner, customer value manager with OM Partners.
SCB: What is a value management program, and how does it affect supply chain planning transformation?
Joiner: Value management is new thinking in program management. Often what we see in supply-chain planning transformation programs is a focus on the labor force, planners and the implementation of more advanced tools. Traditional project management is very important in making sure that tasks stay on schedule and on budget. But we're finding that once the initial energy burns off, and we've gotten well down the road in the project plan, customers lose sight of the initial tangible value that the project was designed to achieve.
What value management provides to customers is a plan and roadmap so that the project team can keep sight of the detailed tasks and how they relate back to particular value gates. So that we don't get off track in the middle of the project, and forget the big picture that we're trying to achieve.
SCB: A constant reminder of first principles?
Joiner: Yes. It's a lot like a road trip. Every now and then we need to pull out the map and remember the final destination that we have in mind.
SCB: What is the challenge involved in staying on budget?
Joiner: That's where traditional project management is still important. Program value management doesn’t replace it — it augments and complements it.
SCB: What kind of benchmarks do you need to establish in order to make sure that you're following each of the tasks that are laid out in the project plan?
Joiner: It's very important to have a tangible value plan before the project kicks off, so we have an idea of why we're doing this, and the direction we want to run. Then, as part of the initial planning and analysis phase, we finalize that value roadmap with pain points and value drivers. Pain points are the day-to-day planning problems that we want to solve with the new processes, tools and skills. We tie all of that to an overall value roadmap, which lays out value gates that are periodically checked, along with the actual project plan itself.
SCB: Things are going to happen that you didn't anticipate. How do you deal with that?
Joiner: You can’t anticipate certain things. You need to have a philosophy of reacting to them, and that's where the value plan and roadmap come into play. You might change that value plan. You might decide as an organization, "This was the best value plan and roadmap we could come up with in the beginning. But now that we're into analysis and actually transforming our processes, people and tools, we see that it's worth changing. So we're going to react to something we know better now, and come up with a better plan.”
SCB: The other thing that happens in initiatives of this sort is mission creep. You end up taking on tasks that you didn't anticipate, and maybe you shouldn't be doing. How do you avoid that happening?
Joiner: Again, that's where the value roadmap comes into play. If mission creep is considered, we compare it to the value roadmap and decide, "Does this actually enhance the value realization that we're going to get in the end? Are we going to improve our savings and inventory dollars? Are we going to improve the man hours required for doing these planning activities?" Sometimes mission creep is a good thing, but with the value roadmap you can make an informed decision as to whether you should change your mission or not.
SCB: Who in the organization should be in charge of this?
Joiner: There should be a value manager from the vendor side, and another contact on the customer side, and there should be direct reporting to a steering committee at the customer’s office.
SCB: How visible should an initiative like this be? How much should you keep top executives in the loop as you move along?
Joiner: The value-management program philosophy is an excellent tool to make these projects visible to the executive suite. When we talk to executives about the details of project planning, they might sometimes lose focus. But when we talk about how it’s going to impact their investment in capital and supply chain right away, you've got their attention. That's a good example of a classic value driver in a value roadmap.
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