Supply Chain Management

The 3 Strategic Focus Areas for Logistics Collaboration

Integrated supply chain management is still unrealized because effective collaboration has not been realized. The implementer needs to collaborate internally with functional departments and externally with customers and suppliers. As with any other function, collaboration requires knowledge and planning. Effective collaboration requires commitment to the cause. The three strategic focus areas for logistics collaboration are:

  1. Teamwork
  2. Strategic Sourcing
  3. Project Management

Teamwork

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Is it troubling to see how little we understand the concept of teamwork, especially since most of us grew up playing or watching team sports. Although there are many definitions, teamwork essentially consists of a group of individuals, each with unique talents, working toward a common goal. Teamwork is a powerful force. The synergy that results from the melding of ideas and experience can often raise a company above its completion.

Often, the best ideas are hatched during the early, stormy, stressful stages of teamwork development. Success will come to the person who strives to work cooperatively with colleagues who have opposing work styles, goals, and priorities. Building teams is not about who you like or what department you are in. Building teams is about a shared goal and who has what skill and talent to contribute to the team. Increasingly, in logistics and supply chain management, it is well known that more cross-functional teamwork is required.

Companies continue to suffer from a lack of cross-functional teamwork, which creates silos, stovepipes, and departmental barriers. Natural forces tend to create walls and maintain their existence. Excellence in supply chain management will not be reached as long as there are communications barriers. Hence, the significant question is “Why do departmental barriers exist and what can we do to break them down?” It can be argued that two of the key drivers of departmental barriers are a lack of understanding of internal processes and a lack of communication with the customer.

Strategic Sourcing

Lean theory suggests that supplier relationships should be based on long-term commitments to quality and cost reduction. Six sigma theories suggest that the number of suppliers we have should be minimized in order to reduce complexity and the associated costs. Moreover, from a logistics point of view, strategic sourcing strategies have significant impact on logistics functions. Accordingly, all decisions regarding suppliers and sourcing need to be front and center on the logistics radar screen. The types of sourcing that logisticians are interested in are:

  1. Raw material suppliers (choosing suppliers for purchased parts, components, raw material, and service parts)
  2. Logistics providers (outsourcing logistics activities including, but not limited to, transportation, warehousing, cross-docking, packaging, and third-party logistics)

Project Management

At one point, the logistics function was about negotiating freight rates, reading tariffs, and maintaining relationships with carriers. These were function oriented jobs that went on in perpetuity. This is not the case for today’s logistics professionals. In a lean and six sigma environment, the role of the logistician is becoming that of a project manager. Implementing a third-party relationship, sourcing overseas, and opening a cross-dock are all examples of projects that are managed by the modern logistics professional. The logistician may be the champion of these projects or he or she may be a team member playing a key role in a project. Regardless of the role, effective project management skills are required to see a project through to successful completion.

Consequently, the success of any project will hinge on the ability of the project leader to manage the project from start to finish. This management is crucial because not all members of any given project team will have the same level of commitment to the project. This management is crucial because not all members of any given project team will have the same level of commitment to the project. This means that the project leader continuously directs others toward the ultimate goal. This requires project management and leadership skills, without which any substantial initiative will fail.

Project management is the backbone of any lean six sigma initiative. It is so important that all respected lean six sigma programs being with training on team building, project management, and leadership. Experienced lean six sigma professionals recognize that this so-called “soft stuff” is in fact the “hard stuff.” You can train one hundred statisticians and can educate one hundred lean engineers, but they will all fail if they lack the people skills to influence others positively to work toward a common goal. Luckily, managing projects does not need to be as complicated as some employees would indicate. Indeed, a large manual on project management has likely lost touch with the basics.

Posted by LeanCor Supply Chain Group

LeanCor Supply Chain Group is a trusted supply chain partner that specializes in lean principles to deliver operational improvement. LeanCor’s three integrated divisions – LeanCor Training and Education, LeanCor Consulting, and LeanCor Logistics – help organizations eliminate waste, drive down costs, and build a culture of continuous improvement.

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