Category Archives: News U can Use

Supply Chain Management – A Hot NEW Discipline?

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As we are working “in the weeds”, every day, we often lose sight of how critical our function is.  We, at The Mpower Group,  do a lot of Strategic Sourcing and Supply Chain Management training as one of our service offerings because WE KNOW the value of a strong Supply Chain. I guess it has just taken the rest of the world a little time to catch up . . . . . .

There was an article in the Wall Street Journal last week “Hot New MBA:  Supply-Chain Management”  which describes the increasing demand of employers to hire people with supply-chain expertise.  For many, many businesses, their supply chain can be the difference between success or failure.  So having the right, skilled resources in place is a critical success factor.   But let’s be real here . . . this is not NEW, but it is clearly a move in the right direction.

I do have a few words of caution for employers  . . . . . .  as you know, a college degree in any discipline is helpful BUT it is not a silver bullet.  To be a strong supply chain professional there are skills beyond “Supply Chain” which are important.  It is those strategic competencies like problem solving, change management, communication, collaboration, business acumen, etc.  that are true differentiators when hiring any professional.  These are also the skills that are often missing in the Supply Chain Management curricula offered today.  I have written about this quite a bit because I am a strong proponent of integrating those critical strategic competencies into the functional (supply-chain) competencies – see Could Supply Chain Skills Return America to Prosperity?.  So, I would advise employers to target graduates from programs that are integrating those skills or use professional training firms to provide those skills.

Since most companies cannot or should not replace their entire staff with recent grads, investing in professional supply chain training is a great investment.  But be sure to select a training firm that does two things:

  1.  Integrates strategic competencies with the functional,  supply chain skills
  2. Requires application of the new skills to ensure that the learning sticks AND is applied

If these two points sound intuitive, they are BUT they are seldom followed.  As with everything else, companies spend millions of dollars in implementing solutions but very little in ensuring that those solutions are adopted by employees – AND ADOPTION is where you actually get a return on your investment.  Think about all the training you have attended and reflect on what, if any, you actually applied when you returned to work – probably very little.  By the way, the same can be said for hiring talented, supply-chain grads.  If you do not provide them opportunities to apply what they learned in school you will not benefit, as an employer, from their skill set.   In addition, those supply chain skills will not be sustained if they are not used.

The good news is that the rest of the world is starting to recognize what we already know – supply-chain management is an important function and requires a unique set of skills to be successful.  Universities are gearing up to meet the demands of employers that recognize the value of supply-chain management.   As supply chain professionals we need to insist that our employers provide us with the training we need to round out our skill set and also provide us the opportunity to utilize those skills.  I think supply-chain can be an exciting and rewarding career. I am encouraged to see that others are recognizing that as well.

Don’t forget The Mpower Group when you are thinking about investing in your employees . . . . we are the best!

Please join in the conversation . . . . . . .

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Bagpipes and Business

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When not focused on my work with The Mpower Group, I spend some of my time learning and playing the bagpipes.  When I share this with people, they usually have many questions about the pipes.  But, I think the similarities between playing the bagpipes and working with businesses are very interesting.

Bagpipes, like business, are very organic.  The pipes are made of wood, the reeds are made of wood and the bag is often animal hide of one sort or another.  Because of this, the environment in which the bagpipes are used has direct impact on them when it is hot, the wood expands and the pipes tend to be sharper, when it’s cold and wet your breath condenses in the bag which can eventually foul-up the reeds.  A good piper takes the environment into account when adjusting his pipes.  Similarly, an astute manager takes into account the environment in which they operate to make adjustments to their plans to most effectively deliver business results.

As with business, the forces or drivers of the bagpipes are not always apparent – the seemingly obvious forces are often red herrings as to the true business drivers.  With the bagpipes, when most people try them for the first time, they try to blow as hard as they can to get them to play – believing the air pressure from their lungs will drive the pipes.  The real force, though, is the arm – while the air from one’s mouth is important, to get the pipes going and playing well, it’s the pressure the piper creates by squeezing the bag with his arm which actually drives the pipes.  By knowing the right cause a person can begin to get the pipes to sound good, as within business knowing the true cause of an issue, leads one to the correct solution for addressing it.

Like many tools within business, bagpipes can be constrained – there are only nine different notes – however, in the hands of a skilled and creative player, these nine notes can be used to create a variety of music and have been formed into thousands of tunes.  No different than taking a business tool, such as the Agile system development method and applying it to solve and address a business performance issue.

What avocations do you have?  How do those relate to what you are trying to accomplish?

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How Smart Are You?

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Let’s do a hypothetical test.  You are in a room with 5 other colleagues from your company and you are all involved in implementing the latest S&OP software(or any new process or tool or initiative) and I asked your team to come up with the top 10 issues and challenges that you have faced.  Now let’s assume that run a similar exercise with five other companies and with five other teams working on a similar initiative.  What do you think will be the result?  Will the lists be the same?  Totally different?  Having been there and done this exercise many, many times let me offer you the answer.  The lists will be very close to each other, if not the same.  It turns out that most of the issues and challenges faced by teams in these kinds of efforts share two attributes – they are Predictable (“P”) and they are Inevitable (“I”).  Predictable, meaning that we can accurately predict  the biggest challenges we will face.  Inevitable, meaning that there is almost total certainty that the challenges will occur.

Now let’s think about that for a minute – wouldn’t you love to be part of an initiative or a project where you can name the top 10 challenges with almost total certainty.  I’m telling you, you can, and I’m willing to prove it to you.  Will there be some nuances to account for in different organizations?  Of course.  But for the most part they will be P&I.  If that is true, then why don’t teams and organizations do a better job of dealing with all of those challenges up-front, before even launching their project or initiative?  Why do they wait for the events to occur and then scramble to figure out how to deal with them?  Or even worse, why do most teams not even acknowledge that these issues and challenges exist?

Research and common sense also tell us that the longer we wait to deal with them, the harder it is and the more “resources” (time, money, political capital etc. etc.) we consume  to deal with them.  You may remember the mantra about quality –  if you design quality in, you don’t have to deal with quality problems later.   You will admit that designing quality in(deal with it now) is a lot better and cheaper than having to deal with market share loss(deal with it later) because of constant quality problems.  You can see below that the size of the circles(effort) gets progressively larger and larger as time goes by.Most of our clients get pretty shocked when we take them through this exercise using our methodology and then share the list that we had already prepared (before the workshop) and they are pretty close to each other.  They cannot believe that we could have guessed what their top 10 challenges were going to be.  The real work of course is after you have the list – it’s dealing with all those issues and challenges or putting mechanisms in place to deal with them later.  I’m sorry to be the one to tell you this – most of the challenges  you are facing on your initiative were known before you started but you and your team chose not to deal with them then, and as a result are paying a huge price to deal with them now. 

How smart are you?

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Where’s the Glue?

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It’s actually sitting right under our nose  . . . . . . but we manage to snub our nose at this function time and time again.  It’s Purchasing – not Strategic Sourcing, not Category Management, not Global Sourcing, not the forever –exalted Supply Chain (and it’s ever changing scope /definition) but simply Purchasing!  And I say Purchasing with all the professional respect this group deserves BUT seldom receives.

We, as “buying” professionals, have historically treated Purchasing as the “ugly stepsister” (no offense to stepsisters by the way).  This group is often referred to as tactical, non-value added, transactional, able-to-be automated, outsourced or even eliminated.   Here is how we think about the Purchasing function:

In a nutshell, Purchasing is the “Glue” that holds the buying function together.  They play liaison to internal business partners, suppliers and customers and are the face of whatever you call your “Procurement” function.   When Purchasing works, everyone up and down the supply chain is happy:

  • Sales – customer order are being filled on time and at the agreed upon margin
  • Sourcing – the internal organization is  buying off of contracts
  • Manufacturing – materials are where they need to be, when they need to be there
  • Plants – inventory in being maintained at optimal levels
  • Suppliers – purchase orders are being issued and invoices are being paid
  • Internal Business partners – requisitions are being processes and filled
  • Customers – orders are being filled under the agreed upon time frame
  • Everyone – issues are being resolved in a timely fashion

When Purchasing does NOT work, then the entire Procurement function falls apart.  I wish I had a dime for every time I hear a Sourcing organizations complain about having too much tactical work and not having the time to focus on Strategic Sourcing.  This is because not enough attention is being paid to the operational excellence that is required of the Purchasing function.  By the way, operational excellence is not about having everything automated because that is impossible.  What it is about is having the right combination of adoptable processes, technology and skilled people to get the job done.  In addition, it is also about strong customer service, attention to detail and the ability to lead change. 

By the way, the best Strategic Sourcing contract in the world is meaningless unless it is successfully executed and adopted – and THAT is Purchasing’s job!   Sourcing professionals, take a good look at your Strategic Sourcing process (7 steps, 9 steps, 10 steps, whatever . . .).  It cannot be executed without the strong involvement and support of the Purchasing function.  Best of luck getting accurate spend data, supplier information or even business requirements without Purchasing.  In addition, if the operational execution is failing, your internal business partners are not going to be too willing to let you lead a Sourcing team for one of their categories – they will kindly suggest that you look elsewhere.

So the next time you think of the Purchasing function imagine a model airplane.  If all the parts are properly in place and glued together, it has a pretty good chance of a successful flight.  But if those same parts are not glued together, it will fall apart the minute it tries to launch.  Thanks to the thousands of Purchasing professionals that provide the “glue” which allows the rest of the “supply chain” function to soar . . . . .

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

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If you ain’t got the right questions…

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…You don’t have a snowball’s chance in &^$$ of getting the right answers. I cannot tell you how many times I’ve had this discussion with CEOs and other senior executives. Or, as my friend Pete often says – “The most common source of mistakes in management decisions is the emphasis on finding the right answer, rather than the right question”. Or, as my other buddy Al says – “The formulation of a problem is far more essential than its solution, which may be merely a matter of mathematical or experimental skill”. Those would be Peter Drucker and Albert Einstein.

Asking the right questions is a critical competency that very few people pay attention to or develop. How many times have you been involved in futile number crunching or mind numbing analytical exercises that as soon as you’re done, someone decides that it wasn’t the right analysis and let’s go do another one? Often referred to as the “get me a rock” exercise – where the executive says “go get me a rock” and as soon as you bring in a rock, it’s not the right one and you have to go get another rock.

We often run a team simulation where we give the team all kinds of data and they have to answer a question. If the team took the time to examine the problem and identified the right set of questions, the answer can be had in 2-3 minutes. We’ve had teams take 45 minutes and not even be close – they keep crunching the data and formulating all kinds of analysis and spinning their wheels and validating their wild guesses every 5 minutes and getting more and more frustrated. And the teams that do the worse are the ones with the high achievers, the analytical super horses etc. etc.

We were just at a client meeting where the client was jokingly showing fake exasperation with all the questions we were bringing up and was wondering what value we were bringing since all we did was ask questions and we were getting paid for it. The conversation turned serious when I explained that the first job of any good consultant was to make sure that ALL the RIGHT questions had been asked. Only then should the consultant start working on potential solutions. The client admitted that the questions we had been asking were driving them to do some serious thinking – we were working on their core value creation and delivery process and the questions led them to a strategy to leapfrog their competition.

And there are techniques you can use to improve in this area. An example is The Minto Pyramid and the associated MECE principle. So slow down, stop, and reflect! Make sure you have all the right questions first – otherwise you will be headed on the fast train to nowhere.

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