About Anne Kohler

Anne is the COO and Founding Partner of The Mpower Group. She has been leading consulting and financial management organizations for over 25 years, and has extensive expertise in strategic sourcing, change management and organizational design, supply chain management, ERP, and process reengineering.

Supply Chain Management and the 57 – cent part . . . .

brokenchainMaterials managers, buyers, transportation coordinators, category managers, product engineers, suppliers, quality controllers, etc. all make up this mysterious world of Supply Chain.  If you look at that list and think that one role is more important or more critical than another, then think again.  Would it surprise you to learn that a 57 – cent part may have been the cause of GM’s recall crisis?  According to a recent article – The 57-cent part at the center of GM’s recall crisis, a 57-cent part inside the ignition switch was redesigned in 2006, but the part number was never changed.  It is standard practice, by the way,  for the manufacturer to change the part number any time a part is redesigned.  “The fact that the part number wasn’t changed prevented federal safety investigators, and even some GM employees, from figuring out what caused the accidents.  Accidents declined in newer vehicle models, but investigators could not figure out why, since there didn’t appear to be any change in how they were manufactured.”   Some are suggesting that the lack of a new part number is a sign of a deliberate cover – up, while others are suggesting that this is criminal deception . . .   Maybe BUT maybe not!

I must admit that I was not surprised nor did I immediately jump to the conclusion that this was a deliberate cover-up or criminal deception.  What I did think was that here is yet another example of the critical role Supply Chain plays within an organization.  Here is an illustration of a typical Supply Chain model:


If this model looks complex, my assumption is that GM’s model is even more so.  It is that complexity and the numerous handoffs (between many, many different people, departments, geographies, etc.) that leave any organization vulnerable to errors.  In addition, many (maybe even most) of the players don’t understand what a Supply Chain is, how it works, or their role within it.  Ask an engineer,  and I have, within a typical manufacturing company what his/ her role is within the Supply Chain and more than likely you will hear that they are NOT part of the Supply Chain.  I am only using engineering as an example but there are many other players that would provide the same response. On the flip side, a materials manager may readily identify himself as a member of the Supply Chain but probably does not realize how his role impacts the entire system.  The 57 – cent part debacle may be as simple as someone forgetting to change a part number (by the way, my assumption is that GM has hundreds of thousands of part numbers and hundreds of changes per day) and the rest is now in the press everyday.

What does this teach us about a Supply Chain and Supply Chain Management?  Here are a few thoughts:

  • A Supply Chain is just that, a chain.  When one link is broken it will dismantle the entire chain
  • Every link needs to know how it fits into the overall Supply Chain
  • Your Supply Chain is only as strong as your weakest link – therefore every link counts
  • If you can’t get the everyday stuff right, the rest doesn’t matter 
  • Most professionals have no clue what a Supply Chain is, let alone what it does or the Value  it can provide
  • Supply Chain management should be a core competency for any organization that is providing goods or services (yes, even service organizations have Supply Chains)

By the way, GM like many other large, global organizations probably has more policies, processes, technology and tools than most within their Supply Chain.  The real question is whether or not those resources have been fully adopted within the organization. It is very possible that the 57-cent error was not seen as a big deal but ask the families of those that died what they think. Let’s not underestimate the value that the Supply Chain can bring and also the tremendous responsibility IT has. But first we need to define IT, communicate IT, embrace IT and manage IT.  

Join in the conversation and let us know what you think  . . . . . .

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Skill Gaps – Do the Germans Have a Fix, or Do We?

skillDid you know that nationwide we have over 4 million unfilled job openings but 10 million people are unemployed; this is according to U.S. Labor Department statistics.  On the weekend edition of NPR last week, they ran a story “What Germans Know that Could Help Bridge U.S. Workers’ Skill Gap” which notes that this “phenomenon is puzzling to some European companies that have expanded into the U.S. and are used to a more skilled workforce”.  “It’s pretty much that middle gap” explains Martina Stellmaszek, a representative from the German American Chamber of Commerce in Atlanta.  She explains that they have no problem finding qualified engineers on one end of the spectrum or really low-qualified workers on the other end.  It is that middle segment that is the problem and Germany may have the fix.

The NPR report goes on to describe a three-year apprenticeship program that every trade worker in Germany must undergo before being certified in a skilled job.  Certificates are awarded by the Chamber of Commerce and they set the standards for what is taught in the schools. This program is elaborate and quite successful as it provides employers with certified, experienced workers the day they walk in the door.   It has also captured the attention of the Obama administration, so much so that Joe Biden has been assigned the task of reviewing America’s jobs program.   This is being taken so seriously that new regulations will be announced later this week requiring for-profit and vocational colleges to demonstrate that they are properly preparing students for careers after graduation or potentially be excluded from federal student aid programs.

So by now you are asking yourself, “what does this have to do with our profession?’’ We don’t hire trade workers.  We hire mostly college graduates.  I agree. Yet, the issue of finding the right skilled workers, particularly in our discipline, remains the same and our education system is not necessarily helping.  I’ve met and taught some of the kids coming out of the Supply Chain programs from some of the best universities in the country and while they are smart, they are not equipped to hit the ground running, day one.  Perhaps we need to force the same accountability on our colleges and universities as we do on our vocational schools.  Maybe the idea of an apprentice program for Supply Chain / Sourcing or any shared service function (e.g. Finance, IT, Human Resources) could have some real benefit. Or instead of waiting for our educational system to catch on or up (by the way, this issue has been discussed for years), you can do something about it within your own organization. What we can learn from the Germans is the value of learning and experience on-the-job as opposed to in the classroom. Having delivered training in Germany to a German audience, I appreciate their relentless focus on application.  Here are a few suggestions:

Internships – Start by grabbing the kids early, perhaps after their sophomore year in college.  Establish a program that replicates an apprenticeship where they work side by side an experienced leader.  Give them meaningful work – not the stuff that no one else wants to do.  Most importantly, pay them. Even if it is only minimum wage, paying an intern does give them a sense of worth and commitment. Make it a multi-year program where they work for two to three summers before they are offered a job.  The benefit to both you the employer and the intern is that you get to know there capabilities, work ethic, etc., and they get to learn your culture, processes, expectations, etc.  To be successful this program must be structured and staffed or you will not achieve the benefits.

Rotational or Internal Apprentice program – As you are bringing on new employees, either create a one to two year structured rotation program that allows them to learn the business hands-on or team them up with an experienced leader that they can learn from for at least the first year (this needs to be a structured program as well).  The benefit to both you, the employer, and the employee is that they have a structured learning program that is targeted to add value to your organization.  In addition, these types of programs have proven to be differentiators in the market place when you are recruiting.

Experiential Training – Develop a training program (either internally or with an experienced consultant – I know one, by the way :-) ) that focuses on learning and application of new skills in the classroom but more importantly outside the classroom.  This would focus on on-the-job assignments to ensure that the learning sticks. This approach is not only powerful for new employees but also for current employees where you are trying to upgrade their skills.  The return on investment is ten-fold.

 Another powerful learning tool is to establish Communities of Practice.  But, ooops I am beyond my word limit so that will have to wait for a future blog . . . . .

In conclusion, there continues to be a shortage of the right skills within our profession.  We can either wait for others to fix our problem (the education system) or we can do it ourselves by replicating some of the best practices we have seen from our friends in Germany!

Join in the conversation and let us know what you think  . . . . . . . 

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Don’t Shoot – The Messenger May be MORE Important than the Message!

How many times have you had to deliver bad news and your opening line was, “Don’t shoot the messenger!”   As we think about and develop communications, both internal and external, we often agonize over form, format, timing, messaging, technology, etc. in an attempt to ensure that what we are communicating will be heard, spread to others and even acted upon.  What we don’t think about often enough is the messenger. 

In an article I read in Harvard Business review “The Other Factor that Makes an Idea Spread”, author Julianne Wurm notes that “. . . . . much of the desire to share an idea with others was linked to that idea’s carrier. It’s the carrier who gets the audience to open up, trust, and ultimately spread the idea. Some well-known examples of carriers of ideas would include Daniel Goleman, who popularized the idea of emotional intelligence in 1995 although the concepts and research were actually conducted by John Mayer and Peter Salovey. Malcolm Gladwell has brought forth the ideas of others in nearly all his books from Blink to The Tipping Point and Outliers. Maria Popova of the popular blog Brainpickings  connects different theories and opinions in unexpected ways.” 

I found this article interesting because communication and the ability to share and spread our ideas / recommendations is the most critical element of our jobs as Sourcing professionals.  If you buy the fact that most of our issues are internal – and believe me they are, STILL, then communication as a change management tool is critical to our success.  If the messenger really does matter, as noted above,  then we need to ensure that our messages are delivered by the most effective messenger we can find.

Here are some of the attributes of an effective messenger:

  • Ability to connect with the audience
  • Strong storyteller, thinker or writer
  • Make fresh connections and present clear arguments   
  • Likeable (people will listen to people they like :-) ) – the opposite is true as well
  • Give ideas context they may lack standing alone

By the way,  messengers can / should change depending on the content of your message and the recipient.  As such, developing a communication plan that includes the messenger as a key element is important. As you are deciding on your carrier, consider the attributes of a successful messenger.  Don’t assume that the most senior person in the organization is automatically the ideal messenger because the opposite may be true. 

When asked by our clients, “who is the first person you would hire for your Sourcing organization?” we always answer -  a marketing / communication star.  The reason is that “selling the change” is by far the most critical activity for an organization that is trying to change behavior across the organization and communication is on the top of the list in “selling the change”.  As you are considering which competencies are most critical in your sourcing professionals – it is strong communication skills.  If that is a skill gap for your organization, that may be the reason you are not making headway with your internal issues.

Remember, the next time you have an important message to communicate, make sure your messenger is embraced, not shot!

Let us know what you think and join in the conversation . . . . . .      

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From abC to Xyz to Extinction . . .One Can Only Hope!

I read an article yesterday in Crain’s Chicago Business entitled “America’s Ever-Shrinking Middle Market” where the author Joe Cahill explains that large companies and long-standing brands like McDonald’s, Sears and J.C. Penney are struggling as “  . . . nimbler new competitors are picking off customers.” This is where my story begins . . .

I was opening my bills the other night when I noticed that my cable bill had risen to a whopping $250 a month.  This was up from about $170 per month only six months ago . . . . Now, some of you may say – no big deal BUT my family watches very little TV and of the 500 channels we have, we tune in to less than 10.  Now, to be fair that price includes a telephone land line (which we also do not use but maintain for emergencies) and wireless internet.  So I decided to call abC / Xyz to discuss how we had gotten to where we are and to “negotiate” a package that would be of value  to me and more in line with my needs.

Now I bet you are dying to know the result of that conversation.  It is actually a case study for “how NOT to treat a customer” but to be honest, I was not surprised.  By the way, abC changed their name to Xyz  in 2010 to dodge the poor customer service reputation they had amassed over the years – let me tell you, it has not changed.  I started with the billing department who told me that the increase was due to the expiration of a promotional rate – I guess $170 per month was considered a promotional rate (how scary is that?).  Then I was informed that my price was based on the way abC / Xyz had “bundled” my services.  WOA!  RED FLAG!  “Bundled Services”  was not what I wanted to hear (Sourcing 101 here!).  So I asked the billing rep to explain to me exactly what was included in the bundle.  After listening, I went through each line item and let him know what I did not need, what was of no value to me and what I did not want to pay for.  His response was (I am paraphrasing) “that’s nice but we don’t sell our product that way.  You need to buy what and how we want to sell”.  As I started to question what the difference would be if I was new customer, he told me that I would need to talk to sales and then he transferred me there.  STRIKE ONE.   Next I talked to a woman in sales who told me that she could NOT talk to me about what would be offered to a new customer but could talk to me about the “customer loyalty program”.  After much discussion, and over an hour of my time, the package was not changed and I ended up with $20 off my monthly bill.  STRIKE TWO.   To make a long story short, I will be considering other options AND there are numerous options – moving to the more nimble carrier that has recently moved into my neighborhood, cancel cable and consider a web-based solution for programming, etc.  

As a supplier, abC / Xyz gets a big zero from me.  They are one of those brands that is huge –and getting bigger every day as they have just today announced that they will be buying Time Warner.   The article in Crain’s, noted above, points out that even the biggest players in their industry are not insulated from the competition.  Those companies that focus on value as defined by the customer are the ones that in the end will win.  What is most interesting about abC / Xyz is that the content they sell can easily be disaggregated and sold exactly the way the customer wants to buy it – that is what Netflix is doing so it can be done.  What is most fascinating to watch is how rapidly major industries are changing and it will be interesting to see which companies survive, which companies flourish and which companies become extinct.  As Sourcing and Supply Chain professionals we can play a key role in helping to define new methods and relationships that support that customer / value focus.    While it is an interesting time for business in general, it will be even more interesting for those that support these businesses.

Join in the conversation and let us know what you think . . . . .

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If You Aspire to be a Leader, Start Acting Like One – NOW!

As the mother of three millennials (all boys), two who have already started their careers and one that has just started college; I find myself constantly trying to give them advice about how to progress in their careers as well as in their lives.  The lessons I think are important are nothing new BUT they are a constant reminder to me that the more things change, the more they stay the same.  My best advice to them is the best advice that I ever received – “No matter what your position or role, always be a leader”.

I want to be clear that I am not talking about being the named leader – that is just a title.  I am referring to being a leader, no matter what group, team or organization you are a part of or what position you hold.  This can, by the way, start as early as being that player on the T-ball (do they still play T-ball?) team or that dancer in ballet class that works harder than anyone else.  It can be that kid that participates in class vs. being the kid that tries to act cool by not responding to the teacher or the kid that decides to skip the party down the street while all of his friends get drunk.  It can be that kid that is kind to everyone including those that look, sound or act different.  Start acting like a leader now and it will become second nature your entire life.

I read an article by Amy Galo in the HBR Blog Network, “Act Like a Leader Before You Are One” and it provided some practical advice for those that aspire to be future leaders. She offers several tips that were taken from Own the Room: Discover Your Signature Voice to Master your Leadership Presence  coauthored by Murial Maigan Wilkins and Amy Jen Su. Here are the highlights:

  • Knock your responsibilities out of the park  - this is table stakes.  Do your current job well.  Whatever you are asked to deliver, make sure it represents your best work.  In other words, EARN the right to eventually sit at that leadership table.
  • Help your boss succeed - and be willing to execute his/her priorities.  Always be willing to help / lead important projects or say yes whenever you are asked to take on something new. 
  • Seize leadership opportunities, no matter how small – even those that go beyond your relationship with your boss.  In other words, raise your hand to take on even the simplest task like facilitating a meeting or attending a recruiting event.  Also consider making yourself visible outside of the company by leading a volunteer project or joining a board.  These type of activities also signal your willingness to take on leadership roles.
  • Look for the white space – Take on challenges or projects that no one else wants to do.  It is a real opportunity to stand out.
  • Don’t be a jerk – The simple advice here is “Don’t try to exert authority when you don’t have it”.  Display “humble confidence” and put your team before yourself.  
  • Be cautious when sharing your ambition – It is OK to share your ambition with your manager but frame it in terms of what’s best for the company.  In many cases it is safer to take a “show”, don’t tell approach.  Be careful here in case you have a boss that may feel threatened by your aspirations . . .
  • Find role models - both good and bad.  Look for people one or more levels above you who have roles that you want and study what they do.  Try to figure out a way to work with them by volunteering for a committee or a project.  Also, look for those people that are stuck in their careers and study them for examples of what NOT to do.  By the way, don’t assume that your boss is someone you should emulate.  There are plenty of bosses out there (and we have all had one) with poor leadership skills.
  • Build relationships – at all levels of the organization as there is NEVER a down side.  It is doubtful that your boss with be alone when deciding your next move so the more people that have a positive impression of you the better.     

I recently sat through a C level meeting with one of my clients where every direct report was discussed for potential, future leadership roles.  I can tell you that technical competency was not mentioned once.  What was mentioned was many of things that were noted above –  leadership  presence,  willingness to take on new challenges and say “yes” as opposed to ”no”,  ability to make decisions, change leadership, ability to influence others and build relationships,  etc.   This, by the way, was not the first time I had heard this from similar C level teams.  What I find most interesting is that these are skills that you cannot teach an adult in a classroom.  These are personal characteristics that are honed throughout your career.     So the moral of the story is – it is never too early to work on your leadership skills because EVERYONE is watching . . . .


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