Balancing the People, Processes, and Purpose of Supply Chain Planning
Written by Michael Burchett, Lean Logistics Specialist at LeanCor
When I was a kid, the strangest things used to capture my attention. Every time I went to my grandparents’ house I would run straight to their living room and play with a game called Topple. In the game of Topple, players took turns placing pieces on a plastic board (which was balanced on a stick) until the whole board lost balance and “toppled” over. If you caused the board to topple, you lost. As a kid I loved stacking the little pieces as high as I could, pushing the limits of gravity to see how much strain the game could take before falling over.
To be a leader in supply chain planning is to own a complex system, where you are at the nexus of hundreds, maybe even thousands, of different parties with their own constraints and goals in mind. Managing the system often seems like you are stacking the Topple pieces higher and higher and hoping that the whole system doesn’t succumb to the laws of nature and come toppling down. When engaging in supply chain planning, LeanCor has identified three areas that need to remain in balance:
Supply chain planning will require knowing the organization’s purpose and operating principles, and making sure that the decisions you make align with them. For example, an automotive manufacturer may be dedicated to the operating principle of leveled flow. To support this, it may ask its dealerships to buy more cars than necessary in order to level production flow. Stability is thus maintained by leveraging dealerships as a buffer between the end user and its production line. This dedication to level flow leads the manufacturer to make supply chain planning decisions that embrace collaboration with suppliers and dealerships. When a dealership opens its doors, it knows inventory will be more tightly controlled on the corporate level than its competition.
Another manufacturer may only sell dealerships what they ask for. This could be due in part by the manufacturer not having as many dedicated dealers so they have less ability to negotiate. This scenario would make relationships even more important to maintain. As a result, their operations need to reflect the company-dealer relationship. The manufacturer needs to make sure it has enough finished goods inventory to act as a buffer in order to level its flow, or, increase outbound shipments.
When engaging in supply chain planning, processes are truly where “the rubber meets the road.” Forming a plan based on the purpose of the organization is necessary, but processes are what will drive the organization to success or failure in the implementation of that plan. When developing processes during supply chain planning, it is important to ensure that these plans are effective and efficient; they do what they need to do, and they do them while minimizing waste. No process is perfect, so continuous improvement initiatives are crucial to maintain operational excellence.
One area of process development is the creation of standard work, starting with leaders and extending to each team member. Where many organizations focus on engineering standards, lean organizations focus on standard work in order to create a baseline from which to improve. Additionally, quality at the source and error-proofing are necessary in effective process development. Meaning - we need to develop processes where team members can get it right easier than they can get it wrong.
Processes don’t happen in a vacuum, and for the most part it will be people that perform these processes. Most of the time, people show up to work and want to do a good job, so it is important that people are trained to perform to the best of their ability. People should be trained not only to manage processes, but also to create new processes and to continuously improve current ones. Leaders should be committed to developing people. For example, at LeanCor facilities, the LeanCor Academy was implemented to train and develop our team members. We are developing an entire team of lean problem solvers who are trained and focused on optimizing those processes that add value and eliminating those that do not. Team members gain on-the-job training as well as career development with training in lean, six sigma, logistics, supply chain, leadership, and management skills.
Engaging in supply chain planning may mean managing several interconnected but separate pieces, and it may feel like a balancing game. But a dedicated focus on purpose, processes, and people will go a long way in ordering the chaos.
To learn more about supply chain planning for your organization, visit LeanCor’s website.
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.Facebook LinkedIn Twitter Google+