Optimizing the Supply Chain

Jay E. Fortenberry

• Publisher: Business Expert Press
• Year: 2018
• Print ISBN: 9781948976435
• eBook ISBN: 9781948976442
• Topic: Business
• Subtopic: Leadership
• Index: Business

Supply Chain Optimization Field Guide is an essential book to help readers understand the dynamics of how a global business operates.

In a recent article about the death of supply chain management, it was stated that in this world, forecasts are perfect, machines have no operators, and block chain drives it all. Practitioners in the world of supply chain know that it is central to the management of cash and that systems are never the silver bullet as they do not foresee events; they only provide calculations from the data they are fed.

Chapter by chapter, this book provides a comprehensive understanding of the core concepts of people, process, and tools; and how a supply chain should operate in today's complex world. Readers will learn about how an ideal business maintains no unnecessary inventory, responds to changes, and delivers products on time or defect free—and how this ability is a competitive advantage for any business that can solve the equation. Key functional processes are explained in detail for practitioners to learn how to operate effectively in today's arena.

CHAPTER 1

Keeping “People” Front and Center in People, Process, Tools

Over my career, I’ve seen the gamut of ways that companies administer their human resources. As a new hire at Toyota I was required to read 35 books on subjects ranging from the Toyota Production System* to how cultivating a rice paddy symbolized Japanese culture, and I was tested on my comprehension of these books. Later I was sent to Japan for further training, all to make sure that I understood the company’s culture.

I’ve seen a wide array of boss types, including the smooth and consummate gentleman; the pure politician; a couple of tyrants who complimented the people above them and punished those below them; a servant leader; and a genius who was probably insane. Managing people is like parenting. You have role models who you try to emulate, and you have jerks with whom you never want to be associated, ever again.

People, Process, and Tools is the foundation of the formula for success, and it relies on the theory that people are 60 percent of the solution to any problem. When we look at cash management, properly managing human resources can help create a productivity machine and make a business wildly successful. By contrast, when this vital resource is improperly handled, the entire organization can end up drained of time, money, and manpower. It’s truly bizarre that businesses so often fail to protect their most precious asset—their people.

As managers, we are driven by the numbers, the bell-shaped curve, and getting our bosses to approve the department’s compensation plan. We’re required to manage up, and often simply forget to thank the people below who’ve spent a year of their lives helping the business run.

Following are my thoughts on how to manage a business’s most important asset—its people.

Company Values, Principles, and Strategy

The Human Factor

A business is not just a for-profit enterprise: It also bears a social responsibility to its customers, its employees, and its community to make quality products at reasonable prices. It is not facilities, machines, and capital that build products, it’s the people who actually perform the work (Figure 1.1).

Figure 1.1 The human factor

All companies have a core set of values. An organization’s values must be authentic and fully supported by its senior leadership team; otherwise, people won’t follow. It is critical that employees grasp these values and actively work to put them into practice. They must be expressed and modeled repetitively in order to become successfully sustained and integrated into the culture.

Attaining business results revolves around the alignment of a business’s values and principles between the individual employee and the organization.

Business Strategy Deployment

Getting a corporate culture to adopt a strategy takes a greater effort than the act of designing and executing it. In a global organization, areas like languages, native customs, skills, and so on can have a profound impact on the success or failure of a program. Operations can have world-class processes and tools but still be failures at sustaining improvements if they fail to take the time to fully bring their people along. Making things more difficult, the bureaucracy often works very hard at not changing. People become comfortable with the way they are performing their job, afraid that change will have a negative impact on their lives. In some cases, they have developed a power base around the process to be changed and have ulterior motives for preventing improvements.

Managing the people aspect of a business is a vital part of achieving desired outcomes. It is necessary to emphasize areas such as leadership, organizational effectiveness, and continuous improvement in order to achieve and sustain a successful business strategy deployment.

A business strategy deployment is an integrated approach to driving organizational development (Figure 1.2).

Figure 1.2 Key objectives

It focuses on the business’s objectives and goals, concentrating on employee engagement and continuous improvement to assure a process is sustainable.

•Prioritizing: Critical business objectives are developed and prioritized, flowing from the business leadership to the point of execution.

•Alignment: All functional areas are clearly aligned with the goals of the business.

•Precision: Assures a disciplined management process that integrates the business’s objectives and that annual goals are developed, communicated, and measured through all levels of the organization.

•Accountability: Ensures that the responsible functions drive accountability for achieving the objectives and annual goals. The focus is to integrate all functions into moving in one direction.

Managing across regions, cultures, and functions can provide extra challenges toward maintaining these values, principles, and systems. A manager needs to be able to clearly convey roles and responsibilities (Figure 1.3) while attempting to give some local latitude to how they are executed.

Figure 1.3 Clear roles and responsibilities with a regional focus

Through all the years in the companies I’ve worked for, I’ve learned that there are three best practices for ensuring that a business strategy, results, and desired outcome are achieved. They are as follows:

•Building realistic and measurable goals and objectives

•Providing employees with an honest and timely evaluation of their performance

•Routinely reviewing how business resources are deployed and developed.

These three methods of managing human resources provide the best balance of managing both the behaviors of and results for the organization.

Goals and Objectives

The old saying, “What gets measured gets done,” is absolutely applicable in setting and measuring goals for employees. When executing a business strategy, it is imperative that goals are set and quantified from the outset as seen in the goal and objectives figure (Figure 1.4). This keeps a proper focus and prevents conflicting objectives from encroaching and competing for resources.

Figure 1.4 Goals and objectives

Performance Evaluations

Part of a successful employee retention process is a continuous conversation between parties on the performance of the business relative to its goals and objectives. A regular one-on-one dialogue should exist between a supervisor and their associates throughout the course of the year.

By having continuous conversations, you are able to understand the reasons for certain behaviors and make corrections where appropriate instead of waiting for evaluation time. This leads to a conversation that simply reviews the improvements that have already been made. This also empowers the employee to reach their full potential. Another highly effective development tool is the 360-degree evaluation process in which customers, peers, and subordinates are asked about the behaviors of a leader. Successful internalization of this feedback provides the leader with greater knowledge of how to be more effective in driving the business’s values, principles, and management systems.

Business Resource Reviews

The purpose of performing a business resource review is for a manager and the supervisor to have a clear understanding of how a department is focused on achieving the business’s goals and objectives. It ties to the strategic and annual plans, providing updates from a human resources perspective for how processes are operating. Areas discussed should include actions to be taken and timing for their completion, as well as the following:

•An update on the organization and people

•A leadership assessment with results from the performance evaluations

•Retention issues

•Succession depth and planning

•Diversity development.

By executing these methods of evaluating performance, a business can ensure that there is a proper balancing of behaviors that get the desired results.

Organizational Effectiveness

Recruit

You can’t play the game if there’s no team on the field, so recruiting a team should be a manager’s first priority. When executing the business strategy, a diverse mix of both seasoned veterans and youth from college campuses adds a fresh and dynamic approach to solving problems. In addition, it is vitally important that the people you recruit fit in with the values, vision, and goals of the organization.

Hiring correctly the first time is essential for driving and sustaining improvements. The costs of r...

Table of contents

• Cover
• Half Title Page
• Title Page
• Copyright Page
• Contents
• Foreword
• Acknowledgments
• Introduction
• Chapter 1 Keeping “People” Front and Center in People, Process, Tools
• Chapter 2 How Does a Business Plan the Supply Chain?
• Section 1 Running the Business
• Section 2 Functional Expertise
• Section 3 Tools
• Glossary
• About the Author
• Index