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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Supply Chain Management – A Hot NEW Discipline?

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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Social Media and the Supply Chain

As I was looking through my normal round of websites this morning, an article caught my attention on The article was called “B2B Firms Reaping Supply Chain Benefits from Social Media” by Natalie Brandweiner. This article discusses how B2B firms need to leverage social media to support their supply chain.

Being a B2B marketing professional supporting a sourcing/supply chain consultancy, I have found leveraging social media to be an interesting process. I have done my research, taken classes, gone to seminars, etc., but there does not seem to be a straight forward plan on how to best leverage Twitter, Facebook, Google+, LinkedIn, etc. And with new tools launching every day (Pinterest) it appears that the journey is just beginning and the path to social media success will be different for each company.

To see how social media is working for B2B, I jumped over to the blog Social Media B2B and checked out their blog post titled “Only 13% of B2B Marketers Drive Leads with Social Media by Jeffrey Cohen. The post states that in a survey conducted by BtoB Magazine only 13% of respondents reported that social media was their greatest driver of leads. It seems that we all are still trying to figure it out.

The numbers stated by BtoB Magazine seem to be supported by Brandwiener’s article. The article states that in a survey conducted with 150 B2B customers, half of the respondents were unaware of how their supply chain providers use social media or thought they were not using social media at all. However, one third felt that they would perceive their supply chain vendors more positively if they used social media to engage with them. Forty percent of the respondents use social media regularly. Six out of 10 say social media sites are a valuable way of interacting with supply chain vendors (Facebook 57%, LinkedIn 30%, and Twitter 15%).

It looks like there is an opportunity here for supply chain vendors to better leverage social media and enhance customer experience and engage others. The article quotes Janet King from IDG Research Services as saying “The research shows that while the use of social media channels to interact with customers is still developing, vendors who leverage these channels can have a fairly significant impact on customer perceptions.

“Opportunity exists to engage with customers not only on mainstream services like Facebook and Twitter but through private communities, vendor wikis and blogs. Engaging with customers through these channels helps vendors to not only inform the buying decision but join the conversation.”

It appears that we are missing an opportunity to engage with our community on a deeper level. This is an exciting time not just for marketing but for supply chain as we navigate this new world of building relationships through social media. How are you making it work for you? Do you use social media? How do you use it?

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Who is the First Person You Should Hire (Part Deux) – Lutts and Mipps?

A question that has been asked repeatedly after my last post is related to asking the right questions so I thought that instead of responding individually, I would use this week’s blog post to respond to it.

Those that have been through the Decision Making or Change Management training with The Mpower Group may well remember the experiential learning simulation called Lutts and Mipps. In essence, teams are handed lots of answers related to a classic time/distance/speed problem. The only challenge is dealing with Lutts and Mipps instead of miles and hours to put the participants in a different context. In addition, the teams are provided with way more information than they need. The challenge is in identifying that they were given two of the variables and they can easily solve for the third, in a total of about 45 seconds – IF THEY ASK THE RIGHT QUESTIONS! Invariably, there are many teams who never get to the answer in the allotted time(45 minutes) let alone the “solvable” time which is under a minute. And the ones that fail the most miserably? Glad you asked. It’s always the overly analytical types who start gathering the data and crunching it with all kinds of wild formulae. They are also the ones who insist that we must not have given them all the data that they needed! And this is after we have just finished a module on problem solving thinking!

We have been trained and trained and trained to gather as much data as possible and start crunching all kinds of analyses with that data – without determining the Key Questions we must address to arrive at the answer. And this rush to action is nothing but a fool’s errand. We would be far, far better served to make sure that we take the time at the beginning to make sure that we fully and deeply comprehend the question(s) we are trying to answer. Otherwise, how will you know that you are capturing the right data, the complete data, no extraneous data etc. etc.? Which is really what my two friends Pete (Drucker) and Al (Einstein) were essentially saying. And we have proven time and again to many of our clients that determining the right Key Question(s) is a critical and an absolute necessity. Unfortunately, we have all been conditioned to jump into action and time spent in reflection is often viewed as an unnecessary delay. Ironically, that reflection time and developing the right Key Questions and getting consensus on them is a powerful accelerator. And oh by the way, if you follow a structured methodology to develop the Key Questions, it is also a significant Change Management enabler as it builds tremendous credibility with your most reluctant stakeholders. In addition, it enables you to logically structure your argument and essentially serves as a blueprint for your presentation. Furthermore, you can also employ the technique of a reverse hypothesis to completely disarm your most stringent and die hard resistor(s)e.

I cannot begin to tell you the level of frustration that Lutts and Mipps generates in our workshops (which have included CEOs, EVPs, etc., etc.). This is clearly not an issue that distinguishes between seniority. Most people are pretty dumb founded when they realize that they wasted the entire allotted time when they could have had the answer in 45 seconds – if you invest the 3-4 minutes needed to develop the Key Questions. I wish I could show you some of the bizarre answers we have received from teams. How about your organization? How often does it take the time to make sure that it knows what the Key Questions are? And if not, do you think it should? If you would like to know more about any of the concepts mentioned in this post, give me a jingle.

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Trends of 2012 – A Marketers Perspective

On this snowy Thursday, I wanted to expand on Dalip’s blogs on trends from last week. As the head of marketing, I am looking at trends to better understand how I can better serve my company and the company can serve the market.  I have realized that being in marketing is similar to working Supply Chain Management (SCM) in many ways.  We are always trying to show value and get buy-in from the rest of the organization. Both marketing and SCM are trying to get the maximum amount of value out of their budgets while providing the best service possible to the organization as a whole. So I wanted to look at the trends in a different light and see how the same trends affect marketing and SCM.

The first trend that struck me is people’s focus on buying local. This is a trend that started years ago, but I think it is starting to pick up more steam. With “Buy Local” signs showing up in shop windows and the push to support small businesses, the word Mass in Mass Marketing is becoming a thing of the past. People want a more authentic feel. For marketing this means that messaging needs to have a community focus. Target markets are now hyper focused with large advertising campaigns being used to reinforce this message. For SCM, this means that buying local might become a strong consideration when making decisions.

This rolls us right into another key trend: Corporate Social Responsibility (CSR). It seems that people are looking for a change in the way companies behave. The socially conscious companies are the ones predicted to make a splash in the next few years. CSR is very important when looking at what marketing messages to get out to the public. Of course you can’t just say that a company is socially responsible.  Actions speak louder than words, and CSR has to be shown in the way the organization behaves. Brands need to be associated with a cause. And marketers need to be careful that it does not come off as gimmicky and disingenuous. Consumers see right through what is authentic and what is fake. What does this mean for SCM? It means, once again, that there is a different lens when looking at what to buy for a company and making sure that the purchases are in line with the larger CSR goals. In addition, gathering around a cause is a great way to build a team environment and attract new hires as they consider CSR a determining factor when looking at companies to join.

Our third and last trend focuses on technology. It seems that you can’t escape the call of information and the Internet. Some are detoxing, but technology is so engrained in who we are that it is hard to leave the house without a laptop, tablet, or phone (I know my iPad and iPhone are never too far away from me at any given moment). This means that the way people are getting information is continuing to evolve. For marketers this means that your messages must be accessible to whatever device or social media platform people are using. A website can no longer be created without understanding how it will look and be navigated on multiple platforms. Keeping up with Social Media trends is a fulltime job in and of itself. For SCM this means that the way things are bought is changing. With online reviews and more interactive websites, buyers can now make more informed decisions. This can cut down on the time it takes to make a decision and negotiate prices as more information is available at any given time.

It is easy to sit back and look at these trends and plan about what actions to take. However, you can get stuck in the typical analysis / paralysis trap. The key however is to stay flexible and to stay educated. Both marketing and SCM are facing the same challenges. It is important to keep learning from each other as we navigate through this ever-changing environment.

Do you think SCM and Marketing have more similarities than differences?

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