Supercharged Supply Chains

Discover Unparalleled Business Planning and Execution Practices

James G. Correll, Lloyd Snowden, Jim Bentzley, Lloyd C. Snowden, James Bentzley

• Publisher: Wiley
• Year: 2021
• Print ISBN:
  9781119782414
• Edition: 1
• eBook ISBN:
  9781119782421
• Topic: Business
• Subtopic: Business General
• Index: Business

Provides unparalleled practices for all supply chains from leading consultancy Oliver Wight, more important than ever in the post-COVID world

Supercharged Supply Chains: Discover Unparalleled Business Planning and Execution Practices provides authoritative guidance on effective Supply Chain Management. Written by the experts at Oliver Wight, a leading global consultancy firm, the book provides readers with a clear understanding of what is required to operate at a Class A Excellent level. The operating principles are supported by practical examples and cases that demonstrate why typical approaches fail, and why Unparalleled Business Planning and Execution Practices succeed.

Based on the popular Oliver Wight class that focuses on Unparalleled Business and Execution processes, the text is designed to put companies on track to successfully operate Business Excellence Planning. Readers get a contemporary view of the processes, learn about new technology for implementing solutions, and are presented with change methods that address the people and behaviors vital to supply chain operations. Topics include demand planning, Integrated Business Planning (Advanced S&OP), master scheduling, material requirements planning, capacity planning, data accuracy, factory scheduling supplier planning, implementation, business improvement, new technologies and more. Outlining the practices that have boosted the health of supply chains for more than 25 years, this invaluable book:

• Describes how the Business Excellence Practices resolve the common problems encountered in operating a supply chain
• Provides strategies and methods to significantly improve customer service, financials and grow the business
• Identifies when and how Unparalleled Planning and Execution Practices should be applied Guarantees success if the recommendations are followed

Supercharged Supply Chains: Discover Unparalleled Business Planning and Execution Practices is essential reading for all executives and anyone involved in forecasting, planning, scheduling, inventory control, finance, production, purchasing and management of supply chains. It provides a great overview of the entire supply chain and goes into great detail regarding each element that makes up the supply chain. It also explains in depth how all functions of a company play an important role.

CHAPTER 1
Churn: The Cause of Disruption

We hear more and more complaints about working in End‐to‐End Supply Chains,¹ and, even worse, we see more and more young people leaving and saying they are glad to have escaped. Throughout this book we will explore and identify the need to implement and use consistently Business Excellence Planning, Figure 1.1, through committed and engaged Leadership driving business processes with a team‐based culture.

FIGURE 1.1 Business Excellence Planning

The youngest daughter of one of the authors recently said, after leaving a manufacturing company to start her own company, “I'm glad to be out of there! I do not mind working hard, but constantly scrambling because of poor planning and poor Leadership has caused me to be demotivated, tired, and frustrated. Instead of feeling any success I feel deflated and undervalued.” What in the world is happening in companies? As one person told us, “You can never plan on anything because shortly after you arrive at work somebody drops a bomb in your planned daily schedule, and then you spend the rest of the day chasing your tail.” All of the authors have experienced this, starting their careers many years ago, expecting things to get better over time, but, instead, seeing the disruption maintained or even getting worse.

A good term of reference to describe this constant disruption was not available until we met Wade Sheffer, the Managing Director at GM Ventures. As Oliver Wight coaches, we were doing an assessment at General Motors when we first met Wade, who at the time was the project leader for improving supplier capacity planning. He used the word churn to describe the chaos that occurs in supply, but we also see the same symptoms in process‐based and service‐based companies. We asked Wade for a definition, and he said, “An unanticipated change in direction, plan, and/or strategy.” He also made the point that “Churn, in and of itself, drives significant waste in all organizations, big or small, and should be avoided.” This was a perfect description of the situation. We had always called it firefighting, but churn is better. It is what we have been seeing for years in many other companies, and coaching them to sustainably eliminate, but we did not have the right term or words to describe what is all too common.

A former colleague of ours, who still works in Supply, recently said something even more descriptive. He said, “Most supply leaders have a mentality that nothing is fast enough, and no one has enough work on their plate. They tend to chase single‐point solutions instead of big‐picture solutions uncovering the root problems (poor planning). It is almost like they enjoy adding stress to the environment, making it toxic. Their competitive nature is only temporarily satisfied by the ability of their employees to execute the tasks faster – not with efficiency but with brute force. Meanwhile, the rest of the organization is operating less efficiently because of the churn.” That is a brutal statement, but certainly describes the situation in too many companies.

Companies need an excellent planning process to thrive. Planning processes can only operate when they have accurate data, good information, and are managed properly. When someone does not do their job correctly and makes changes in isolation, their failure, lack of knowledge, and integration causes the plan to change, and the churn begins. When multiple people/departments drive errors into the planning process, the churn causes job dissatisfaction, consumes everyone, including customers, and erodes bottom‐line results.

How does churn cause job dissatisfaction? Let us count the ways:

1. Increases frustration: not being able to do a quality job, few daily successes, and always dealing with issues.
2. Undermines job satisfaction: feeling bad at the end of the day; we all need some success.
3. Lack of recognition: even when you do something right, it is overwhelmed by the bad things that have happened.
4. Constant belittling and bullying: because you seem to be blamed for all the things that go wrong, being tired increases the possibility for more human error.
5. Being overworked: spending long hours trying to make things right in the middle of churn.
6. Unacceptable attitude: giving up trying to make things right and just getting through the day; not feeling valued.
7. Lack of understanding and listening: up and down the organization.
8. Tell and do: an environment with no empowerment or delegated authority; we're just a number.
9. Eroding teamwork: driving people to be individualistic and not team members often results in blame.

Many readers will have experienced at least some of these during their career. Jim Correll distinctly remembers one of the worst periods of his career:

I had just moved from Quality Control Manager to Machine Shop Manager. My new boss said that the General Manager had forced him to take me, and told me that I would not survive three months. I was told the reason the job was vacant was because the previous manager did not have a “sense of urgency.” Every day started with prepping with the Scheduler, for the 1½ hour shortage meeting. The Machine Shop had between 100 and 200 shortages every day and we were expected to give dates for resolution of each of the shortages with delivery within a day or two. I struggled with my Scheduler because he certainly did not have a “sense of urgency,” but he was not the one being dragged over the coals during the meeting because the dates were never good enough. Name calling and anger occurred every day, and I bore the brunt of most of it. My machine shop made a lot of gears for the assemblies; many of these gears had 10‐plus operations, meaning long Supply Lead Times. Being on the receiving end of the anger and name calling was not fun! [Recognize the “Face of Churn” in Figure 1.2.] One morning the Scheduler did not show up until I was already en route to the shortage meeting. At the shortage meeting the usual berating started and, since I did not have dates for many of the items, it was even worse. At this point, I had had enough and responded with a “will advise” for all the shortage items, even those for which I had dates. It was clear that I was upset and was not to be messed with that morning. The bullied person suddenly turned into the bully. My boss looked at me and said, “Well, it looks like you might make it after all.” I was just praised for my bad behavior.

FIGURE 1.2 Supply Chain Personnel – Frustration

This story has a happy ending. Six months later, the company had installed an excellent planning system, as we describe in the following chapters, and we implemented them in the Machine Shop. Unfortunately, the other production managers had not implemented the Unparalleled Business Planning and Execution Practices. One morning, instead of showing up early to the shortage meeting, I hid out of sight until it started. When my boss said, “Where's Correll?” I stepped in and said, “I have no reason to attend today.” Before my boss could explode, I said, “I do not have any shortages.” He looked at the rest of the people in the meeting and said, “If the rest of you performed like Correll, we would not have to have this meeting!” Not exactly his words, because I have removed his expletives. Did we have shortage meetings after the rest of the production department implemented the Unparalleled Business Planning and Execution Practices? Yes – but they were 10 minutes with no “bull,” belittling, and name calling; just action plans to handle the few potential delays. These new shortage sessions became the norm.

A different type of churn was demonstrated one Christmas at a well‐known frozen food confectionery. The last production before the Christmas shutdown was a chocolate torte with a thick layer of cream on top. This was a top seller, produced every 10 days or so. During the manufacturing run, the operation ran out of cream. Upon investigation, it was discovered that cream was not in the system's torte recipe. The last recipe change recorded was 18 months earlier. How could this be the case? The torte was made every 10 days. As it turned out, every 10 days there was insufficient cream. Every 10 days production chased the warehouse and the warehouse chased purchasing and purchasing chased the supplier. Every 10 days the supplier reacted, pulling forward the next day's cream delivery. Consequently, the day after torte production, there was a shortage of cream, and the same churn re‐occurred. The cream scheduler was provided a message from the system to purchase more cream and obliged. At the end of the month a variance was reported. Everyone blamed everyone else, but it was “just the way it is here” and the root cause was hi...

Table of contents

• Cover
• Table of Contents
• Title Page
• Copyright
• Dedication
• Foreword
• Introduction
• Prelude: The Awakening
• List of Figures
• CHAPTER 1: Churn: The Cause of Disruption
• CHAPTER 2: Get the Basics Right: Eliminate the Churn
• CHAPTER 3: Inventory: Essential to Know What You Have
• CHAPTER 4: Bill of Material: A Solid Foundation
• CHAPTER 5: Routings: Accuracy Required for Valid Plans
• CHAPTER 6: Manage MRP: Do Not Let MRP Manage You (Do Not Let the Tail Wag the Dog)
• CHAPTER 7: Mastering the Master Schedule: Meeting Customer Requests at Optimal Cost
• CHAPTER 8: Integrated Business Planning: Leadership from the Top
• CHAPTER 9: Product and Portfolio Management: Offer What Customers Need, Not What You Think They Need
• CHAPTER 10: Demand Planning: The Art of Demand Planning and Execution
• CHAPTER 11: Managing Internal Priorities: Delivering Products on Time
• CHAPTER 12: Capacity Planning: Short, Medium, and Long Term
• CHAPTER 13: External Sourcing and Supplier Planning: Reaping the Benefits of Valid Scheduling
• CHAPTER 14: Supply Chain: Ensuring There Is End‐to‐End Flow
• CHAPTER 15: Finance, Integrated and Proactive: Top‐Down and Bottom‐Up
• CHAPTER 16: Business Improvement: Being Lean and Agile
• CHAPTER 17: Technology Enhancements: What You Need and Not Just Following a Market Trend
• CHAPTER 18: People and Behaviors: Get the Team Behind You and Plans Will Be Delivered
• CHAPTER 19: Implementation: Where to Start
• Glossary
• About the Authors
• About Oliver Wight
• Books by Oliver Wight
• Index
• End User License Agreement