Supply Chain Growth: A Leadership Mindset on the Offense

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“I love to work in growing companies,” a VP of Supply Chain told me as we were making introductions and explaining our work histories.

We had just settled on a deal to perform a network and facility design that would enable his company to add another 10 years to the growth path they were on.

Contrary to those who love working in growing companies as a defense mechanism for job security, this VP had the skill set needed to enable growth without the risk of stifling it. The last management team in the company had spent most of their careers on the defense, constraining growth and working very hard to meet the bare minimum expectations of their customers, while blaming poor performance on factors outside of their control.

This VP had a vision to put less effort and cost into the overall enterprise, but direct it in such a way to rapidly expand the capabilities of the organization and go on the offense. 

Who is this person?

This person is a synthesis of many of our customers, that have very similar principles in how they manage their supply chains for growth, profitability, and performance.

We've seen business leaders adopt some proven principles that drive supply chain growth and place their companies in an offensive position to drive innovation and competitive advantage.

 

Invest in your people, not just technology.

In many of our supply chain deployments, we've observed cases where operators did not, at that time, have the ability to take the supply chain to the next level. In the nastiest of these deployments, these employees were overburdened with multiple, disconnected, and complex systems.

The common difference between successful deployments and those from which we walk away, would be the mindset and willingness of the leadership to develop their people for growth.

A new control-tower infrastructure, upgraded WMS, and manufacturing simulation software are only valuable to a team that knows how to adapt them, exploit them, and align business processes to them. We've seen several case studies where a COO or VP didn’t fight for the additional capital to train employees on systems they were implementing, and ended up integrating systems that did nothing, pushed their people into excessive manual workarounds, or locked up the business altogether.

Training can be a targeted, centralized effort, or a decentralized initiative that allows employees to identify and close their own gaps. Regardless, every supply chain needs a people advancement plan, and this cannot be something that is outsourced to an HR department removed from supply chain activities.

As a matter of practice, we encourage supply chain teams to spend time assessing their own gaps, developing plans to close them, and to avoid overly-bureaucratic processes irrelevant to business problems they are actively trying to solve.

Eliminate waste, but don’t cut corners.

Our industry has experienced many decades of training and projects focused on waste elimination. As an unintended consequence, we have built staffs of people who default to not investing in value-creating activities for fear that it will add cost. 

We’ve seen deployments of projects, where the leadership team understood the value of investing in appropriate planning and design activities, which saves millions upon execution, and we’ve also been called into execution situations where the last leadership team had a strategy of “figuring it out” while orders are dropping, trucks are arriving, and the sales department is complaining.

Similarly, we’ve coached several facility managers on the importance of 5S programs, maintaining cycle count problem solving initiatives, and keeping up with system directed replenishment and re-slots. The immediate cost of additional labor and effort is a real cost, but a necessary cost, because the cost of not performing the maintenance activities multiplies exponentially as time goes on, and we can’t accept an excuse that those items are out of our control once they are affecting us.

Something like a thoughtful material flow, facility, or network design, is an actual cost, and the cost of not doing it correctly and thoughtfully may never be known as it impacts revenue line-items in ways our organizations do not have the means to estimate and calculate.

A growth mindset is not the mindset of a spendthrift, but one of thoughtful deliberate and decisive action to plan supply chain strategies on the offense not the defense.

Supply chain leadership is a hands-on sport, but don’t get sucked in.

We can usually gauge the success and potential of a project in the first few weeks based upon the way the leadership behaves in our assessment meetings.  Leaders who are frantically bringing in the direct front-line experts, because they don’t really understand what is going on in their operations, will typically be too hands-off to drive real growth momentum.  Leaders who are frequently pulled out of meetings to make decisions on specific orders are typically too sucked into the business to pull back and make strategic decisions for the operations.

Leadership needs to guide the front-line experts to build their own process with input and guidance from clear operating principles. This gives the leader confidence that capable people will be able to execute swiftly and confidently, without the need for micro-management of daily unplanned activity.

Times when leaders are brought into specific issues should be a time for the leader to reflect and assess the sufficiency of the processes and principles, as well as the team’s constant application and improvement of the system. These incidents should not come as surprises to the leader, as the leader’s job is to maintain and improve the systems of processes, while the team is supposed to operate and improve the processes.

Growth can, and should be, an exciting thing.  It’s always better than the alternative, but it’s often a misnomer that growth is the responsibility of Sales and/or R&D.  In a world where people are becoming acquainted with clicking a few links on a mobile device and having a service or product arrive soon-there-after, the supply chain is being increasingly tasked with being a constraint or enabler of growth.

Strong growth-leaders will make mistakes, but they will make them on offensive moves to drive supply chain advancement, and will learn from adapting the supply chain to continue to drive growth.  These individuals will invest in their people, invest in their processes, and operate the supply chain at the right level of engagement.

We’re grateful to have met and coached hundreds of these individuals over the last 15 years, and look forward to the next hundred!

Posted by Derek Browning

blog author

As a Director of Consulting services, Derek directs a portfolio of end-to-end supply chain projects for companies in a wide array of sizes and industries. He's trained thousands of professionals in lean, six-sigma, leadership, and supply chain through LeanCor and leading education partners. Derek complements his experience with an MBA, a bachelor’s degree in marketing, and several professional certificates.

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