Successful Integrated Planning for the Supply Chain

Key Organizational and Human Dynamics

Richard Lloyd

• Publisher: Kogan Page
• Year: 2018
• Print ISBN: 9780749477684
• eBook ISBN: 9780749477691
• Edition: 1
• Topic: Business
• Subtopic: Industrial Management
• Index: Business

Managing changes to the supply chain comes with its unique challenges. Supply chain planning presents an especially complex challenge for the change practitioner as multiple stakeholders and functions are involved.

Successful Integrated Planning for the Supply Chain evaluates different approaches to change interventions and explores how Integrated Business Planning could be implemented in any organization to create sustainable improvements.

Using frameworks based on extensive academic research, Richard Lloyd considers the potential blocks to an effective supply chain, and advises on how to deal with and identify uncertainties within an organization. Numerous international case studies included throughout show that every project has its own set of unique problems. Successful Integrated Planning for the Supply Chain is an invaluable guide for anyone who needs to implement change in the supply chain.

PART ONE

Context. Situation. Outside-in

03

An outside-in view of an organization

In this chapter we start the process at the top left of the matrix in Figure 3.1. We will work down each vertical in turn. It would be as well to imagine the first nine boxes as taking place over a period of about a month. We are carrying out a review of an organization, and using appropriate models to interpret the findings as we go.

Whether you are a consultant, a new hire or a long-term employee, an external look at an organization can be useful. This chapter is about the first steps in getting to know an organization. An investor may look to understand its prospects. We look at an organization to understand the context and the character. We also consider why the organization is considering an intervention to improve integrated planning.

In this first phase will take the role of an historian. We are not yet engaged inside an organization and will look at what external factors can tell us about an organization. The artefacts and symbols, what the organization writes about itself and what image it projects. We will also look at the history of the company and what business challenges it has faced.

Artefacts

Organizations are difficult to see. Historians look for artefacts: manifestations that reveal something. In a modern organization this can be the architecture, the art, the design or logo, the clothing, the ‘look’ and any other material objects.

A head office is one of the main images that people have in their minds when they think of an organization. The head office is not the organization, but the building serves as a kind of proxy.

Once the offices of Hoogovens, and now Tata Steel, ‘Dudok Huis’ is in Ijmuiden, 20 kilometres west from Amsterdam. The site is seven square kilometres of heavy, heavy industry. Miles of railway track, mountains of coke and molten iron in railway torpedoes. Bordered by the North Sea and the Noordzeekanaal.

Willem Marinus Dudok, the ‘father of Dutch Modernist architecture’, designed the offices. Floor to ceiling windows, neat lines. Two parts joined by a three-storey bridge spanning a road into the site. The visitor can stand outside and enjoy the contrast between the elegance and the gaunt, smoke-blackened plants. Inside it is easy to get lost, as the different floors are almost identical. You can navigate by the art on the walls.

Continental Tires’ head offices in Hanover used to be near the centre of town. A sweeping six-storey brick building that curved to follow the shape of the road outside. There was a nice wide glass-walled reception. Upstairs there were long corridors, also curved into the distance, with high ceilings, carpeted and lined with closed doors. It was quiet and as you walked along you would wonder if there was anybody in the building. The top management were up on the sixth floor.

The HQ of Caprabo, a Catalan grocery retailer was on the outskirts of Barcelona in the Polígon Industrial de la Pedrosa. Trucks backed up either side of the main entrance to load and unload. It had a small reception and a waiting room of suppliers, smoking patiently. There was one main floor for open-plan offices from where you could walk straight through into the warehouse. The CEO’s office was three doors down.

Buildings matter. They may have been purpose-built to make a statement. Or they simply may be convenient and available for occupation. But someone selected them, based on some logic and they are a legacy to the future employees. Churchill said: ‘We shape our buildings and afterwards our buildings shape us’.

Conti and Hoogovens knew they needed impressive buildings to show their customers, their investors and employees. Family-owned Caprabo knew they didn’t. Shoppers don’t visit the head office of their supermarket, nor do many employees. Grocery retailers frown on unnecessary expenditure.

Integrated planning looks more likely in the open-plan offices in Barcelona than in the silent corridors in Hanover. The elegance and style of Hoogovens’ Dudok House was unlike the stoutly functional British Steel buildings in Llanwern and Port Talbot. Merged into Corus and bought by Tata, might there be tensions between the UK and Netherlands operations?

While we should not jump to conclusions, we also recognize that people know that first impressions count. What public and visible signs are there as we first arrive at the office? Are there status symbols? Is there specific language or jargon? Most organizations make some effort to think about what image they project. Some go to extraordinary lengths to do so. What are they trying to say?

Arriving at an energy company’s offices in a bland business park in a London suburb a visitor is asked to put on a high-visibility vest and is given a fire drill. The safety culture from refineries has percolated through to every part of the business. Interesting.

Symbols

Inside the building there will be public and visible signs that provide clues to the organizational image. These have been carefully thought through. The brand logo often has a hidden message. At Amazon the arrow goes from A to Z, while FedEx has a hidden arrow. BMW remembers its background in aviation with a white propeller against a blue sky. Continental has a hidden tyre between the C and the O. Often there is a video loop playing in the foyer of the organization. The head offices of the Global Alliance for Vaccines (GAVI) plays a loop talking about the number of vaccinations delivered globally and the statistics of lives saved.

Status symbols can provide important clues to what is going on. In organizations with uniforms these are clearly displayed. The military are specialists at this, as are hospitals. In other organizations this may be subtler. What floor do people work on? Is there a separate canteen for senior people? Are they using it? At the offices of a shoe manufacturer in Germany, outside there is large parking lot at some distance from the building. Then, right outside, in a covered area there are eight spaces, each named for the job position, occupied by very high-end, very black, Mercedes cars with tinted windows.

The paradigm

The key at this stage is to understand the core purpose of the organization, how it distinguishes itself, and the fundamentals: why are we here? What are the uniting beliefs and what matters? One very explicit way that organizations lay out their purpose is through their mission statement, the vision of the company.

The first five clauses of the J&J Credo, written by Robert Wood Johnson in 1943 go as follows (Johnson & Johnson, 2017). Sentence 1 focusses on responsibility to doctors, nurses, patients and mothers and fathers and every other user of J&J products. Sentence 2 focusses on quality. Sentence 3 on cost. Sentence 4 on customer service. Sentence 5 on a fair profit for suppliers, distributors and customers. Senior management in the supply chain can use this to underline the importance of supply chain collaboration. But will it help?

Some businesses have more delicate messages to deliver and tread carefully around sensitive issues. Let’s look at BAT (British American Tobacco, 2017). First sentence: delivery of growth today, while continuing to invest in the future. Second: growth through tobacco. Third: ‘We are also committed to leading the Next Generation Products category globally by developing and commercializing a range of products that offer consumers potentially less risky alternatives to conventional cigarettes.’ This reassures investors and suppliers first, and then indicates that BAT has a difficult planning problem ahead. It will be challenging to introduce a new product that may well cannibalize their current products, made from different materials. With different suppliers, distribution channels, tax policies and a wide range of competitors.

Bearing the top-level messages in mind as we dig into the organization is important. Like the head office, they were chosen for a reason. Someone spent a lot of time on this and agonized over every word. They were trying to tell us something. A mission statement rarely matches the reality in the organization. That is not its role. It is there to inspire. The tension between the vision and reality is important.

We need to keep our eyes open to spot elements that might help or hinder us in our journey to increase the agility of operations. Like a doctor meeting a patient for the first time, diagnosis is a critical part of the job and you start by looking for symptoms.

Where does it hurt?

My adventures in Brazil started when I met the supply chain director, Roberto, of a Brazilian food company, in the UK. At the end of a long meeting dominated by my boss, Roberto turned to me and said: ‘Next time you are in the region let me know. I have got a problem that I would like your help with.’ He sailed out leaving me mystified. A few weeks later I was in Buenos Aires, so I called him. He as...

Table of contents

• Cover
• Title Page
• Copyright
• Contents
• List of Figures
• Preface
• Acknowledgements
• Abbreviations
• 01 Introduction
• 02 The supply chain challenge
• PART ONE Context. Situation. Outside-in
• PART TWO Complication. What is really going on?
• PART THREE Implications. Interpreting our findings
• PART FOUR Conclusions. Decisions. Shaping interventions
• Wrap-up: Case study re-imagined. Next steps
• Index
• Backcover