Monthly Archives: July 2011

Avoid The Transformation Traps

You’ve been reading SI and after the considerable amount of discussion around Next Generation Supply Management that has taken place since January, you know your organization needs a transformation to get to the next level. Operational excellence isn’t enough — it’s all about strategic business enablement. Moving from tactical cost cutting to sustainable value generation. A long term vision that elevates Supply Management to the center of the business.

However, transformations are easier said then done. Getting it right is a journey, as compared to getting it wrong, which often only requires a single misstep. That’s why SI was pleased with this recent white paper form Wipro that summarized “the top three reasons supply chain transformations fail”. While not a how-to guide, it did point out the most common gotchas that an organization needs to keep an eye out for.

The Leading Practices Trap
While the organization will need to implement, and execute on, leading practices on a daily basis if it wants to be a world class Supply Management organization, it will not be able to go from 0 to 60 without passing through every speed in between, and it will not be able to adopt a competitor’s practices as is. Some processes will have to be adapted gradually. For example, trying to move from landed-cost to value-generation models might be too big of a step for an organization used to making buying decisions from landed cost. The organization might have to move to simple TCO models supported by an optimization solution with expressive bidding and get the stakeholders comfortable with this level of analysis first. Only when an organization understands that lowest landed cost does not equal lowest ownership cost will they be ready to accept that lowest (ownership) cost is not necessarily the best value. In addition, just because JIT inventory management works for the organization’s biggest competitor, this doesn’t mean it’s the right solution for the organization. If the organization uses a more time-intensive manufacturing process than the competition, or is subject to more unpredictability in sales, then the organization might need to maintain buffer stock to insure demand is met and profitable revenue levels are preserved.

The Technology Big Bang
While the organization will need to implement advanced supply chain technologies that automate processes, improve planning accuracy, streamline execution, expand visibility, and transform information into knowledge, an attempt to implement such systems simultaneously across the board is just asking for disaster. Just ask FoxMeyer. Oh wait, you can’t. A failed big-bang roll-out of a new ERP bankrupted the company. All that’s left is a case study (that used to be on SpringerLink). The implementation of new systems must be staged, well-planned, and rolled out in a controlled manner.

Ignoring the Organizational Big Picture
Change requires both buy-in across the organization and the leadership to instill that change. Leadership is required to break through the barriers of poor communication, lack of focus, distrust, and silo mentality. Don’t overlook the big picture.

The white paper also has some good tips on how to avoid the traps. Including:

  • Start from the Top
  • Focus on the Customer
  • Continuous Improvement
  • Fix the Process First

For details, see “the top three reasons supply chain transformations fail”. It’s worth the read.

Where Can CPOs Congregate?

CPOs need to network with their peers. As Steven Deverill of Langley Search and Selection points out in this recent CPO Agenda article on being “in with the in crowd”, the CPO position can be quite isolated, and networking with other CPOs is a source of support and information. It enables them to keep connected, be grounded, and hear what other organisations are doing.

Networking is one of the best ways that CPOS have for gaining ideas, benchmarking information and performance of your supply base and your team too. As Deverill points out, you can benchmark source plans or best practice and utilise industry specific and expert knowledge from your suppliers so you can get better deals. But there really aren’t that many places CPOs can go and be among their peers. SI only knows of a few industry events / groups dedicated to CPOs. And they don’t meet often. Some only once a year.

  • The Aberdeen Group CPO Summits
  • The ProcureCon CPO Roundtables
  • The CPO Agenda Executive Debates
  • The Procurement Leaders Forums
  • The CAPS Research International Executive Roundtables
  • The Mpower Group NPX Exchanges
  • The Tompkins Associates Supply Chain Consortiums

Now, CPOs can try to fill in the gap with online networking, but, as the article points out, there’s no substitute for face to face. And, at least in SIs view, CPOs should be taking a day at least quarterly to meet with their peers and get a good grip on the state of the global marketplace. So what’s a CPO to do. Are there any local organizations that cater specifically to CPOs? Or do CPOs have to belong to multiple organizations so they can attend a subset of the events above, throughout the year, to meet with their peers. Any thoughts?

Good Networking Tips from the CPO Agenda

A recent article over on the CPO Agenda on how to get “in with the in crowd” had some great tips on networking, especially for those new to the on-line networking scene. Diving right in, they were:

Start Social
Social networking platforms allow you to reach out to people you haven’t seen or spoken to in a while that you used to work with. It’s often easiest to start networking with people you already know.

Choose Your Platforms Carefully
The article points out that LinkedIn is the most effective and valuable site for professionals, not Facebook, which is great for friends and family, but not business. SI agrees and is quite happy to see that there are experts who know the difference. It also gets Twitter right. Use it to follow companies to get information on changes to the business, best practice, or new legislation but don’t expect much more from it.

Systemize Your Contacts Strategy
Start by making a list of people you have not connected with in a while who have been helpful to you or who you have respect for and create a plan to keep in touch with them regularly.

Step Outside of Your Comfort Zone to Meet New People
Start by offering to do projects that are outside of your normal scope of work that will help you meet new people and suppliers, but for which you will have support from your team, who can often make the initial introductions.

Only Attend Events You are Interested In
Not only are many events a waste of time, but many don’t draw the crowd they advertise. Plus, even if the event draws a decent mix of professionals, if the event holds no interest to you, people will sense it and may assume that they have no interest to you, which will destroy any chances you have for good networking. Also, try to select an event where people you know typically go as well and arrange to meet up with them while there. Not only will it insure that the event is not a total waste of time, but your connections can introduce you to new people.

And, when using LinkedIn:

Have a Good Profile
It’s important to have a strong and authentic profile that allows people to see how you have developed throughout your career. And don’t forget the picture.

Connect Wisely
Although you want a strong network of at least 100 people, don’t connect with this anybody and everybody. First of all, you can only maintain real relationships with so many people. (British anthropologist Robin Dunbar puts the upper limit at 150 friends based on our brain size.) Secondly, you don’t want to look like a connection whore, err, super networker. In-depth network analyses show that they are not the source of online conversations. They are the sink hole where everything ends up.

Remember Online Etiquette
Simply put, it’s not okay to send direct messages or ask for favours from people you don’t know and haven’t met. You should be introduced first.

It is Better to Give than Receive
Build a reputation as a giver to a community. However, don’t just share interesting articles that are relevant to your network. Also take the time to explain why and add to the conversation.