Six Keys to a Successful Reorganization (of your Supply Chain)

This fall, Strategy + Business, with the help of Booz & Co., got Inside the Kraft Foods Transformation and talked with level top leaders about their three-year turnaround and their campaign to reorganize for growth. It was a good article, but the best part was the six keys factors to a successful reorganization because not only are these themes common to Kraft, but they are common to most of the studies I’ve read regarding transformations in the leaders in the Food & Beverage and Consumer Packaged Goods industries. Since they definitely deserve to be repeated, I’m repeating them.

  • Start with the Business Strategy
    The new organizational model should primarily enable and catalyze the strategic direction of the company. An organization can only align behind a clear strategy.
  • Go Beyond Lines and Boxes in Organizational Design
    The right people and the right organizational chart is important, but supply chain is people, process, and platform. All three have to be aligned in the right workflow, under the right metrics, to fit the right goals.
  • Understand that One Size Does Not Fit All
    For example, a centralized strategy might work for the majority of your categories, but a minority might have to remain decentralized, or vice versa. Make exceptions where exceptions make sense.
  • Have Thorough Planning Lessons Pre-Launch
    Not only do major change initiatives work best when key shareholders have had a chance to articulate their concerns and grievances, but they also work best when sufficient time has been taken to identify what could go wrong and how those situations will be dealt with. It’s easy to focus on the ideal process flow, but they keys to success is having streamlined recovery plans in place when something goes wrong.
  • Leverage the Power of Leaders
    Make sure they are actively involved in all changes. Talk isn’t enough! Actions speak much louder than words.
  • Expect a Multi-Year Journey
    Major changes don’t happen overnight, especially if you are a multi-national. If you put a realistic, multi-year, timeline in place, you will get there … and do so with great success!

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