The Opinion Page
News and comments about the issues facing today's SCM and Inventory Management professionals.
High performance athletes can teach us a great deal about what it takes to succeed in life, and in business.
A while ago, I attended a reunion at my former rowing club in Mississauga, Canada. I competed and coached at elite levels back in the 1970's and 1980's, winning national and international championships. As a coach, I enjoyed similar results, but I never had a chance to represent my country in the Olympic Games.
After a 25-year absence from the sport, the reunion was an opportunity to become re-acquainted with some of the athletes that I had introduced to rowing 30 years ago.
How wonderful it was to mingle with athletes who had grown into World and Olympic Champions! They can now tell me, their old coach, more about the sport than I ever hoped to know! It was terrific to know that they had grown to such heights. How proud I was to have been associated with them.
All of them had been successful in life outside of the competitive arena as well. They had become lawyers, doctors, architects, brokers, teachers, and one had grown into a photographer of considerable renown. Their progress on personal and professional levels was no accident.
I commented at the event that the sport of rowing, and athletics in general, taught me many valuable lessons about human nature, motivation, commitment, teamwork, and even grace in failure. I have used many of these lessons daily in the arena of business management.
I have used a rowing analogy numerous times in my presentations on strategic planning, which is a subject that is close to my heart. In business, we are really trying to accomplish the same thing as high performance athletes: succeed over the long term, according to the rules, and stay healthy in the process.
Over and over again, I seem to return to the notion of Vision as being a key ingredient to athletic, business, and personal success.
A few years ago, before the 2012 Olympic Games in London, I stumbled upon the remarkable story of British Olympian Greg Searle. At the time of the original publication of this article in the Wall Street Journal’s The Source on July 3, 2011, Searle, aged 39, was training to earn a spot on Britain’s 2012 Olympic rowing team.
Since the publication of that article, Searle earned that spot. He competed in the Men’s Eight, regarded by many as the premier event in rowing at the Olympics.
Searle first won gold at the 1992 Barcelona Olympics with his brother Jonny. In an appearance at the 1996 Atlanta Games, he earned a bronze medal. After a fourth-place finish in Sydney in 2000 he retired from top-level rowing to concentrate on his career as a practice director of performance development consultancy, Lane4.
Searle draws on his extensive experience in high-performance sport as he offers five compelling lessons to business leaders, starting with “Vision:”
1. Find a vision; set short term goals to achieve overall success.
A critical component of any strategic plan, the vision sits above everything else that we do. It needs to be an exciting articulation of the overall objective, which inspires people to follow.
When London won the games, Searle thought to himself, “I want to be a part of that.”
Smaller goals and objectives, which feed attainment of the vision, are set into a framework and are followed in a regimented fashion. Without the strength of the vision, it would be very difficult indeed to subject oneself, or others, to the everyday stresses and demands that are required.
Searle comments, “So many leaders talk about goals and talk about a vision but they don’t make it exciting, compelling or engaging enough for people to want to achieve it. The great leaders are the ones that can create that enthusiasm for long term success which drives everyday behaviors in their team.”
2. Feedback is your best friend.
The science of sport has progresses tremendously over the past thirty years. We are now able to measure physiological, psychological, and nutritional outputs like never before. As such, feedback to the athlete from coaches and trainers regarding his or her progress has improved dramatically. Results in British and Canadian programs have proven the worth of such feedback.
“This is an important point for businesses and their leaders as many companies don’t use the support function as well as they ought to,” says Searle. “I receive constant feedback measured against the goals that I set at the beginning of the year. It’s the personal feedback regarding my impact—how I behave around the team and influence them, as well as how I move the boat—that I receive from my coach and fellow athletes that is most valuable.
3. Unshakeable self-belief.
There is an important difference between the terms self-confidence, and self-esteem.
We all make mistakes. Often, it has been said, a person’s true character is revealed in how that person recovers from failure. Failures can hurt, but they needn’t devalue a person’s sense of worth. It is a matter of framing those stumbles within a
larger context of life accomplishment.
Searle advises, “The respect you earn as a sportsman or in your career has been gained over the course of years. It’s important to remember that respect can’t be lost in the blink of an eye.
On an individual basis, self-esteem is deep lying and built upon successes and setbacks over the course of a lifetime. As such it will not be affected by things that happen day-to-day but will be swayed over longer periods of time.
Self-confidence however, is affected in the short-term by everyday events. Self confidence can afford to take a few knocks, but it’s vital to maintain self-esteem by reminding yourself of your successes in the past and that overall, your quality will shine
4. Controlling the controllable.
Early in my career in rowing, I used to take notice of my competitors’ reaction to the weather conditions. Many worried that it might be windy, it might be raining, or that it might be cold. I turned this into a competitive advantage. Why worry about something that I cannot control? It will only slow me down.
Similarly, Searle sees the value of focusing on those things that will help your boat go faster, within the myriad issues that will impact your performance. “After that, he says, “it is simply a case of controlling your reaction to everything else.”
“As a leader or a sportsman it’s important to be prepared by addressing the things that are within your control.
In my sport it is a case of moving the boat as fast as you can down your lane. What the other boats do in their lanes is their concern.
Any strategy needs to be based upon what we can do to make a difference to our performance to get the best result.
I must admit that in Sydney in 2000, I thought our boat was inferior to our competitors’ boats. I remember that I let my mind drift and think about other things that were beyond my control.
We came fourth. It was a lesson learned.”
5. Recognizing pressure as a positive
While I loved the sport of rowing with all my heart, it was difficult for me to compete. So young, I saw pressure and stress as a negative. It was not until later in life that I understood how to put such pressure into perspective and turn it into a positive life force.
Searle advises, “I know that I can perform at my best when I am under pressure. I don’t necessarily like it. I still get racked with self-doubt and nerves—but I know when I am in that situation I have to accept that feeling as it produces the best from me.
It’s only halfway through the race that I realize I have found strength that I didn’t know was there.
In a business environment there are high pressure situations to be dealt with every day, but often that pressure can help you become focused, sharp and at your best. The key is to recognize the symptoms and embrace them. You have to reframe the situation so it ceases to be a threat and becomes an opportunity.
A vital coping strategy is to ensure you have other things in your life. I am a father with two kids. I can keep pressure in perspective. As I sit on the start line, I think about my daughter who was recently in her first swimming gala. When it comes to
the Olympics, I will be in a boat with eight of my mates doing something that I have been doing for the last 20 years. I think that what I do isn’t tough compared to a 10 year-old facing the world and competing for the first time.”
The following tools and techniques are frequently referred to as the “Seven Basic Tools of Quality.”All may be used to identify the root causes of problems:
Pareto Analysis: Also known as 80/20 Analysis, this technique is versatile, powerful, and easy to use with spreadsheet software applications. Charts are a graphical tool for ranking causes from most to least significant. Data can be divided into classes with varying levels of impact on processes or results.
Cause-and-Effect Diagrams:The “fishbone” diagram assists a group in locating the cause(s) of error. Normally, the relevant quality characteristic appears at the head of the “fish,” with the spine acting as the link upon which causes can be hung. As a
starting point, four “bones” are usually labelled “manpower”, “methods”, “machinery”, and“materials”, but these are frequently changed as the investigation progresses.
A graphic or symbolic representation, often using ASME Standard Symbols, of work performed on a product as it passes through the stages of a process.
Control Charts (XBar and R):
Particularly useful in a manufacturing environment, the development of Process Control Charts requires some education in statistics. They are an effective way to determine whether or not a process is in control. Upper and Lower Control Limits are calculated, and process outputs are plotted in a run chart relative to these limits.
Run Charts: A simple yet effective graphical representation of performance over time. Trends, cycles, and exceptions can be easily identified.
Scatter Diagrams: This technique is used to plot the relationship between two variables, for example, a worker’s hours spent in training and the number of defective parts produced.
Histograms: A graphical representation to measure frequency of occurrence. Observations are gathered over time and plotted onto the histogram to identify the most common output as well as the least common.
A number of my students have been working very hard lately to earn a professional accreditation in freight forwarding.
I am pleased to report that they all succeeded wildly in their final exam. I was very happy for them. It has been a long, difficult journey for them. They earned it. They are now allowed to put certain letters after their name on business correspondence. They may now be called "people who know what they are doing!"
Such an accreditation is valuable. It affirms their mastery of a certain level of acknowledged best practices and an esteemed Body of Knowledge. It helps them to gain competitive advantage in the job market. It helps them to earn higher pay than their less-qualified colleagues. It sets them up for better opportunities at career advancement.
Let's pretend that I am a hiring manager in the field of Operations Management. Reviewing a stack of resumes for a job opening that I have posted for my firm, I get excited when I see a number of candidates who have included the letters CPIM or CSCP after their names at the header of their resume. These CV's are put in my "A" pile.
Upon closer scrutiny, I find that some of the candidates have put a qualifier after their claim to professional certification, In the body of the resume; they include the words "in progress" or "expected" after CPIM or CSCP. I confess that I might experience what we used to term "lunch bag letdown."
Have I been misled? Is this a breach of ethics?
On the one hand, I have initially been led to believe that the candidate is a person who has demonstrated mastery of the OM Body of Knowledge by successfully completing all examinations and course material as required to achieve certification. This is by virtue of the fact that the candidate has presented himself as "Fred Smith, CPIM." On the other, the candidate wriggles himself off the ethical hook by including the "in progress" disclaimer deeper in the resume.
How would you feel as a hiring manager? Would you pursue the candidate's application further? Or would you think - as I might - that the candidate is bending the rules just a little and I might be tempted to put the resume into "File 13."
Not long ago, I accepted a new assignment. I was reviewing the CV's of my new staff, and noticed that one of the operatives on the team - who had been hired a couple of years before me - had claimed on his resume that he was "APICS Certified." It helped him win his job. The previous hiring manager, not being an APICS person, accepted that individual at his word, and failed to exercise "due diligence."
Being an APICS person, I thought that I had happily found a colleague. I rather innocently asked the operative about his "APICS-Certified" credentials, He responded that he had been an APICS member once for a year, and had attended the Basics of SCM exam preparation course. Exam? No, he hadn't written one of those. But he had a certificate to prove that he had attended that Basics course. Here I was faced with an individual who was "certified" simply because he said that he was "certified." Interesting.
Bending the truth, or even telling an outright lie about your certification is one thing. But here is an issue that clouds the ethical picture a little bit more.
Many professional organizations are now demanding that certified members re-certify every few years. These are often called "maintenance" programs, and required that the certified individual work in the disciple, remain a member of the association that certified him or her, keep up with current trends and developments, and in one way or another "give back." to the profession.
Often, maintenance programs will come with a price tag. Not everyone likes to shell out $100 every 5 years or so to keep their certification "current." So, they don't. And yet, some of those same individuals continue to claim that they are - for example - CPIM. "I passed all the exams," they might say, "and I volunteered for years. I just do not think it is right for the association to ask for more money. It is simply a cash grab."
I met another person a couple of years ago who claimed to be CPIM. It was on his business card. He also claimed to be an active member of CAPIC. (At one time, CAPIC was Canada's version of APICS, and a subsidiary of the parent association. Many years ago, it was absorbed into the broader APICS organization.) When I met this chap, CAPIC had not existed for over a decade, and when I advised him of this he told me to my face that I did not know what I was talking about. And I happened to be the Past President of the local APICS Chapter at the time. Nope. He was right, I was wrong. He was an active "in-the-loop" member of a non-existent organization, because he said so.
I see a lot of this these days. People who claim certification, or give the false impression that they are "certified," when in fact they may only be members, or have made it only part-way through their studies. If someone says he is some thing - a professional, a pilot, a doctor, a first-responder, a nurse, an engineer, a lawyer, an electrician, a mechanic - does that make it so? I suppose in some peoples' worlds, it does.
It seems to me that - if only for the sale of my students who have just earned their new credentials - that we are obliged to do what we can to protect the value of those credentials. Current trends to bend the rules concern me. Should we, as professionals, be concerned? If yes, how should we enforce appropriate protocols?
I recently had an opportunity to engage in a conversation on Linkedin. One of the group members asked this question:
Q: I am a graduating senior, and I am wondering what kinds of interview questions I should be prepared to answer for an entry level logistics and supply chain management first round interview?
Here was my answer:
In Canada, an applicant will usually have to endure a series of interviews with various personnel within a given company before being successful. The nature of the questions will typically vary as the applicant proceeds through the process. The first nterview is frequently with the HR representative, who will do a cursory review of you, and your credentials. They will be looking for things
like: does the applicant present himself (herself) well, does he seem to be confident, is his story consistent / truthful and stuff like that. Typically the interviews will become more technical as you proceed through the interview process. You will be challenged to demonstrate your mastery of the relevant SCM material. I should say that each company handles things a little differently...sometimes the hire is made quickly - -after one or two interviews - and sometimes it takes 4, 5 or more interviews. It seems unfair, but that's reality.
Now, on to the questions. There are thousands of potential questions to ask, but here are ten that I would likely ask. I should note that I have personally hired many individuals like yourself, not as an HR Manager, but as a "hiring manager" in SCM, so the applicants might have been screened for credibility by HR beforehand. I have hired a couple of duds (sorry to put it bluntly! nobody's perfect!) but I would say I have been happy with 90%+ of my hires and among those I have been thrilled with well over half.
As a matter of principle, it is important to me to assess whether the candidate will live my department's core values. For example, I value ethics and honesty very highly, and try to ensure that the person whom I hire lives up to that value. If the person is not ethical, I do not care how smart he is - I won't hire him (or her).
1. Give me the 30-second commercial about you. Who are you, what are you all about?
2. SCM is a broad field of study. What are the areas within SCM that really interest you? (Here, I will try to ascertain what makes you passionate. Are you trying to build a career? Or are you just trying to apply for a job?)
3.Tell me about a project where you have worked on a team to meet some challenge or solve some problem. What role did you play? Talk to me about the team dynamics. Was the team successful?
4. How do you measure success? (this is an open-ended question to determine whether the person is self-centred, or focused on the company as a whole. What measures would he/she use? Are they all statistical? Or do they demonstrate EQ?
5. Do you prefer to work individually? Or on a team? Why?
6. Where would you like to be - career wise - five years from now?
7. Tell me about that project or accomplishment in life or school or on the job about which you are most proud. Why?
8. What can you do for this company and for me? (the answer to this question should show that the candidate has done a little bt of research about the company, among other things.)
9. I will usually ask a question about the specific technical skills that are required for the position (e.g. ERP knowledge, Lean, Customs, RFID, whatever...)
10. Do you have any questions for me? (this will show the person's level of interest in the job, the kind of research that he has done, etc.) Note that almost any question is OK to ask here, but be smart - avoid asking about salary or mundane stuff like "when is lunch break?" Although, if you are keen on continuing education (and I am!) you could ask if the company supports continuing education efforts by employees.If the applicant has no questions, that sends a negative vibe my way. If the questions are thoughtful and intelligent, then it can stimulate additonal conversation which can work in your favour.
In summary, just relax and answer the questions honestly. Be yourself. If you get the job, great! If not, it wasn't meant to be. Learn from the experience, and move on.
Best of luck!
“What would you create if you had a machine that could make (almost) anything?”
A book about an incredible subject will soon hit the shelves of bookstores
around the world.
Hod Lipson’s “Fabricated: The New World of 3D Printing” is scheduled for release on February 11, 2013. It is creating a tremendous buzz, and pre-orders have shot the title to # 4 on the list of best-sellers in the Industry category on Amazon.com.
You can order your copy in hard copy in the USA (The Supply Chain Almanac
Bookstore, powered by Amazon.com) by clicking here.... The title lists at $27.95, but Amazon.com is launching the title at $17.34 (38% off list!)
The Kindle edition may be ordered internationally ($15.46 US as at Feb. 7, 2013) by clicking here….
In Canada, Fabricated will list for $33.95, but Amazon will retail the hard copy at $21.28 CDN (37% off). It may be ordered by clicking here…
From the publishers:
Fabricated offers you practical and imaginative insight into the question, “How will 3D printing change my life?” This book is an informative and fast-paced exploration of 3D printing technologies and the people who use them. You’ll take a journey to design studios, businesses, schools, and cutting-edge research labs. Based on hundreds of hours of interviews, Fabricated explores the
promise and peril of a 3D printed present and future.
Fabricated is a good read for people who are intrigued by new technology, or seeking new insight into business strategy, popular science, or the social impact of technology.
I have been an intrigued bystander, watching the development of additive manufacturing for the past number of years. I was fortunate to witness a demonstration of this incredible technology at Durham College in Oshawa, Canada during its early stages of development.
I have come to believe that it has the power to truly lead to a small industrial revolution.
And this is just super-cool: I have heard rumours that a 3D photobooth will soon be opening in Harakuju, Japan. In order to use it you will need a reservation, but the machine will be able to create a tiny replica of you. Mini me! (I haven’t heard about what it will cost.)
Here is a video from Canada’s TV Ontario, that features Dr. Lipson discussing this amazing field. Please enjoy it.
I recently engaged in a conversation on Linkedin on the subject of "The Cost of Poor Management." The initiator of the conversation referenced a survey published in HC Online titled "Poor management responsible for negative impact on productivity." In summary, the article said:
"Workers believe the number one factor that negatively impacts employee productivity is poor management, according to the a survey conducted by the Society for Human Resource Management (SHRM). The survey of 478 HR professionals and 613 employees found that the factors which negatively impacted upon productivity at work included: poor management (58 per cent); lack of motivation (38 per cent); organisational changes (26 per cent); a lack of defined goals in the job (24 per cent); readiness to leave the organisation (16 per cent); a lack of accountability in the job."
This was my contribution:
Dr. W. Edwards Deming had a lot to say about the state of American management, and it seems that we have not learned a great deal since he was alive. In his classic "Out of the Crisis" (1982), he commented:
"Part of America's industrial problems is the aim of its corporate managers. Most American executives think they are in the business to make money, rather than products or service...The Japanese corporate credo, on the other hand, is that a company should become the world's most efficient provider of whatever product and service it offers. Once it becomes the world leader and continues to offer good products, profits follow." (pg. 99)
Apart from Dr. Deming's considerable work on this subject, I recommend three contemporary books for some great insight:
1. "How the Mighty Fall" by Jim Collins
2. "Why Smart Executives Fail" by Sydney Finkelstein
3. "Crazy Bosses" by Stanley Bing (for a little comic relief)
My personal opinion is that corporate America, with some notable exceptions, has lost its moral compass. Executives are rewarded whether they succeed or fail (to wit, the fiasco of October 2008). Why are some of the investment bankers not in jail for the fraud and damage that they have perpetrated on the world? There is no accountability, and Washington allows these shenanigans to carry on unabated.
I am not part of the "Occupy Wall Street" crowd, and I do feel that the capitalist system provides the best chance for the most people to participate in the wealth that western countries provide, but I do sympathize with some of the protesters' concerns. People need to be treated with respect, not threatened and bullied by senior management. Executives need to have a long-term view of the health of their organizations rather than become enslaved to next week's share prices. I have seem company after company lose good - nay, great - people to burn-out, disgust, and inability to make a contribution. I have seen executives bring companies to their knees by their own hubris, walk away with millions in severance in their pockets, leaving hundreds of workers devastated by their curious decisions. We cannot continue on this path,
We, in this forum and others, have dedicated ourselves to finding professional enlightenment. If we find ourselves in a position of power, we need, I believe, to be strong evangelists for ethical and forward-thinking business practices. We need to build this culture in our own teams, and export it to others. We need, I believe, to recognize the values of ethics, respect, and fair treatment as Best Practices. We know what these practices are. We simply have to live them, every day.
3D Printing has been termed the “harbinger of the Third Industrial Revolution.”
Professor Hod Lipson of Cornell University takes us on an amazing journey
through the brave new world of this game-changing technology, in this video
produced by TV Ontario as part of their series Big Ideas.
In a series of articles published in April, 2012, The Economist magazine reviewed the enormous potential of technological advances that have been made in the field of 3D printing, known alternatively as “additive manufacturing,” “digital manufacturing” and “rapid prototyping.” Its impact upon manufacturing, supply chain, and product design methodologies could
be so great, argues The Economist, that it promises to usher in a Third Industrial Revolution. Find the link to the series by The Economist by clicking here…
While the concept has been around for decades, we are only now beginning to discover its practically limitless potential for
application. Professor Hod Lipson is at the leading edge of exploration of this exciting new frontier.
Hod Lipson is a robotics engineer, who joined the faculty of Cornell University in 2001. After receiving his PhD in Mechanical
Engineering in 1998 from Technion Israel Institute of Technology, he became a postdoctoral researcher at Brandeis University’s Computer Science Department and lectured at MIT’s Mechanical Engineering Department. Lipson is currently the Director of the Creative Machines Lab (CCML) at Cornell. Lipson’s work focuses on evolutionary robotics, design automation, rapid prototyping, artificial life, and creating machines that can demonstrate some aspects of human creativity.
What follows is a fascinating video, where Lipson explains what 3D printing is all about, and describes his quest to enable printable, intelligent robots. He proceeds to show us, in vivid detail, the astounding potential inherent within this technology with respect to improving the human condition: he describes applications which range from developing custom prostheses to fabrication of pathologies to help surgeons practice methods without having to use cadavers, to rapid prototyping of bones, to printing lives cells where new meniscus can be manufactured to replace damaged cartilage.
The video was produced by TVO (TV Ontario) in Canada, which is a publicly-funded media outlet similar to PBS in the USA. TVO produces a wonderful series called Big Ideas. Lipson’s lecture is one of this series, which I think is ideal for sharing with students and faculty from High School to College and University levels.
TVO’s web site can be accessed by clicking here…
Please enjoy and share with students, colleagues, and friends!
Last week, the World Trade Organisation(WTO) released its report titled “World Trade 2011, Prospects for 2012.”
The report shows that world trade expanded in 2011 by 5.0%. This was a sharp deceleration from the 2010 rebound of 13.8%. WTO economists project that growth will slow further still to 3.7% in 2012. The slowdown is attributed the global economy losing momentum due to a number of shocks, including the European sovereign debt crisis.
This is a robust report, full of data yet easily understood due to liberal use of
graphical illustration. Presentation data over time series is truly dramatic, as
the impact of events surrounding 2008 are revealed with stark clarity. For
anyone deeply involved in international trade, I recommend the read highly.
I am an economist by education, and fully understand the value of macroeconomic analysis and forecasting. As a businessman and supply chain practitioner, however, I have to take the data and projections with a grain of salt. It is always good practice to be aware of the state of the landscape that surrounds you. It helps a person to make informed decisions. However, a litany of micro-trends can be hidden among the high-level numbers. People and businesses too frequently become spooked by bad macroeconomic news and become overly risk-averse or engage in rationalizations for the problems that they face. The truth is that big progress and big money can be made even in difficult economic times, and it is optimism that pulls us out of the troughs.
Further, it is axiomatic that it is easy to post spectacular percentage gains against disastrous performance results in prior years. Sometimes, the only direction is up.
The devil, as they say, is in the details.
That said, the report reveals the fastest growing economies in 2011 were, as might be expected in the Middle East (+ 4.9%), the CIS (+4.6%), China (+9.2%), and South-Central America (+4.5%) and China (+ 9.2%) and the Four Asian NIEs (+ 4.2%).
The slowest growing economies in 2011 included Japan (minus 0.5%), United States (minus 1.7%), European Union (minus 1.5%).
Fourth Quarter 2011 developments (Annual rates) have shown the Euro area declining (minus 1.3%), Japan declining (minus 0.7%), the United States declining (minus 3.0%) and China’s growth softening at +8.2%, (down from +9.5% in third quarter).
Quoting the report,
“More than three years have passed since the trade collapse of 2008-09, but the world economy and trade remain fragile. The further slowing of trade expected in 2012 shows that the downside risks remain high. We are not yet out of the woods,” WTO
Director General Pascal Lamy said.
“The WTO has so far deterred economic nationalism, but the sluggish pace of recovery raises concerns that a steady trickle of restrictive trade measures could gradually undermine the benefits of trade openness. It is time to do no harm. WTO members should turn their attention to revitalizing the trading system and to ensuring such a scenario does not materialize.”
WTO economists cautioned that preliminary trade figures for 2011 and forecasts for 2012 were difficult to gauge due to the extraordinary levels of volatility in financial markets and in the broader economy for the last few years.
The preliminary figure of 5.0% for world merchandise trade growth in 2011 is down 0.8 points from their most recent forecast update in September 2011. These figures are in “real” terms, ie, adjusted to account for inflation and exchange rate fluctuations."
So, world economies can be described in a single word: fragile. And for various reasons, it may stay that way for quite some time. Interconnectedness and globalization have their benefits, but they also leave the entire world sensitive to disturbances in any given part.
Imagine being a senior operations executive in a distribution business where sales are – at best – flat, relative to previous years. Meetings with the sales team get ugly. The Blame Game erupts, and fingers point in every conceivable direction. Rhetoric leads to acrimony. Emotions run amok and morale declines. Worse, the underlying problems might never be fixed, constraining future growth.
The influential manager is obliged to remove barriers to growth and profitability for the firm. That means solving problems.
A problem might be described as follows: Objective + Obstacle = Problem. An obstacle becomes a problem when it prevents the realization of an objective.
Let us assume that our senior executive is confronted by a sales force who lays the blame for poor sales squarely on the doorstep of the procurement team. “We never have anything to sell!” complain the salespeople.
The executive may employ a five-step process to resolve this issue:
The complaint needs to be clearly articulated. “We never have anything to sell” is hyperbolic and inflammatory. Eliminate ambiguity. “Poor service levels are preventing us from reaching our sales budget” is more helpful. The latter statement presents an objective (sales maximization) and an obstacle (poor levels of service) and therefore can be framed as a problem worth addressing.
“Service levels” must also be clearly defined. For a wholesaler or manufacturer, service levels are commonly “the percentage of validated customer orders, at the line item level, shipped on time, in full, in perfect condition.” This key performance indicator must be measurable – otherwise, we will never know whether or not we have succeeded in solving the problem.
Our executive needs to procure the necessary resources to first investigate whether the complaint is valid. If we have been measuring service levels for some time, the investigation can be quite straightforward. If not, we need to gather and analyze the relevant data, and this can be “heavy lifting.”
State the hypothesis to prove or disprove: “Our service levels are substandard, preventing us from achieving our sales budget.”
Check all egos at the door. Dispassionate fact-finding is crucial. Engage an objective facilitator or consultant if necessary.
“Benchmarking” helps to delineate best-in-class from laggard performance in a given industry. If competitors deliver 75% service levels, while we achieve 95%, then we are “best-in-class.” Our performance becomes competitive advantage. In this case, observations disprove the hypothesis. The problem was one of perception. We must look elsewhere for a solution to flat sales.
If, however, the facts support the hypothesis, then proceed to Step 3.
Now that the facts point to your firm delivering substandard levels of service, you must determine the cause. Come clean with the sales team. Admit that the analysis has revealed poor results, and commit to a corrective plan.
Several techniques may be used to determine root cause: these may include Pareto Analysis, Ishikawa (Fishbone) Diagrams, and Five Why’s, among others. By sharing progress at sales team meetings, the level of trust will be enhanced. Brainstorming and benchmarking can help identify possible solutions.
Your work may show, for example, that the primary cause of poor service levels are stock-outs that are in turn caused by suppliers failing to deliver on time. The best solution may be to forge supplier alliances, enact a supplier quality certification program, or to enforce vendor contracts.
Create a project plan to implement your best solution. Manage expectations: in our scenario, underline that 100% service levels are statistically impossible to consistently achieve, but that 98% (for example) is best-in-class in your industry. Work with your vendor partners and invite their input. It may come to pass that “collaborative forecasting” is the real solution to your woes. Set goals.
Establish a process that will continually monitor progress. Set goals. Celebrate success. Take corrective action if improved results fail to materialize. Return to Step One if necessary. As you approach best-in-class performance, continually improve by addressing other obstacles that have presented themselves along the way. Export your successful process to other divisions in your company. Lever the results to gain competitive advantage.
An unbiased approach that promotes cross-functional understanding is critical. Poor relationships between working people will affect the efficiency and effectiveness of technical mastery. Encourage freedom from the bondage of misunderstanding to effectively solve problems in the workplace.
John Skelton is the Principal Consultant and founder of Strategic Inventory Management.