Tag Archives: Supply Chain

What Major Risks are Facing Our Community?

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The Mpower Group NPXAt a recent planning call with some of the members of the Next Practices Xchange for their upcoming conference, I was asked to come up with the list of concerns that leaders in the community (Procurement, Strategic Sourcing, Supply Chain, etc. etc.) had.  This was to identify the major risks that are facing the community so that a relevant agenda could be developed.  I pushed back at the members and got them to acknowledge that we would be talking about only those issues that they knew about or had identified.  What about all those that they had not?  Based on some of the research that we have done and the various venues we speak at, here is the list that I gave them as the Top 10 list of risks that they should be focused on.  I also told them that we would crowdsource the prioritization of this list and give them some help in picking the top 2 or 3 for their next conference.

Please pick your top three risks!

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So go ahead and provide your input and then check back and see what others said. This information will be used to plan our next conference, so stay tuned.

Regards,

Dalip

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Next Practices with “Generation Next”

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The “Millennials” or often referred to as “Generation Next” are not only coming, they are already here. With this new generation 80 million strong (born between 1980 and 1995) and rapidly taking over from the baby boomers who are now pushing 60, we are being forced to look at Talent Management in a completely new way.  We must take a Next Practice approach to managing “Generation Next” or lose the war for talent altogether.  60 Minutes’ MorIey Safer did a report a few years ago entitled “The Millennials are Coming” where he discusses some of the challenges being faced in the workplace as we deal with this new generation of workers.  Safer says, “They were raised by doting parents who told them they are special, played in little leagues with no winners or losers, or all winners. They are laden with trophies just for participating and they think your business-as-usual ethic is for the birds. And if you persist in the belief you can, take your job and shove it”.  Where there are challenges there are also opportunities and Supply Chain leaders have the opportunity to turn these young, multitasking, tech-savvy, “I come first” workers into the most innovative, productive workforce of our time.

I was sitting in a conference yesterday listening to a number of speakers discuss the challenges we will all be facing with “Generation Next” (I have three sons in this category and am quite familiar with both the joys and challenges of this generation).  As I was listening, I was also thinking about all the Next Practices we (The Mpower Group “TMG”) have been trying to drive home to the Supply Chain community.  The thought occurred to me that some of the attributes of “Generation Next” may very well be THE personal attributes of a successful “Next Practice” Supply Chain professional:

  • Well educated
  • Hardworking
  • Self-confident
  • Team players / collaborators
  • Inclusive and diverse
  • Technology / social media savvy
  • Socially responsible
  • Information gatherers
  • Communicators

Would these not be the very attributes that would be required to attack the Supply Chain from a value focus as opposed to the traditional (they are not even familiar with this approach) TCO approach as Dalip Raheja laid out in “Friends, Romans and Countrymen – Lend Me Your Ears!  I Come to Bury TCO . . . . . .”  or tackle the Social Media issues as depicted by Crystal Jones in “Social Media and the Supply Chain”  or  help solve the adoption issues (has this generation not been the faster adopters of new solutions and technology?) as discussed in “Old MacDonald Was Right — It Is About E-I-E-I-O!”

In addition, “Generation Next” has very specific requirements as they are choosing a career. They are looking for the following:

  • Flexibility
  • Work / life balance
  • Direction / roadmap
  • Interesting work
  • Training & development
  • Career advancement
  • Frequent feedback
  • Coaching / mentoring

In other words, they are literally crying out for Competency Based Talent Management (“CBTM”) which is what I was at the conference to present AND TMG has had numerous posts on

In a nutshell, CBTM starts out by defining the demonstrable skills, knowledge and behaviors (competencies) required to be successful within your role to meet and/or exceed the goals and objectives of your organization – direction and roadmap.  It then uses those competencies as the foundation for an integrated talent management program:

  • Recruiting (you must have all the other elements in place or you will be forever recruiting)
  • Performance evaluation (frequent feedback focused on demonstrated competency)
  • Training & development (a MUST – focused on APPLICATION of new competencies)
  • Career Management (coaching / mentoring to advance your career)
  • Succession Planning (identification and movement of high potentials)

Interesting work – I may be a geek but I think Supply Chain is diverse, exciting, challenging and offers a wide range of career opportunities within and across organizations and industries!

As for flexibility, work / life balance and social responsibility – well, maybe we Baby Boomers could learn a few Next Practices from “Generation Next”.

If you don’t have a competency based talent management program in place for your organization you may want to step on the Next Practice bandwagon before “Generation Next” passes you by and goes to the Next company.

Join the conversation . . . . . .

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Supply Chain a Competitive Weapon? Theory Z!

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Your Supply Chain can be a competitive weapon?  ABSOLUTELY!!! However, the fundamental principles that guide the creation and management of supplier relationships must change!

If your organization continues to look at your supply chain as nothing but a supply base from which you must extract the annual pound of flesh of a few percentage points, you are probably conceding a tremendous competitive advantage to your competitors.  Why?  Because your suppliers are probably working with your competitors to help them gain a competitive advantage.  The choice is simple for you as a supply chain/strategic sourcing professional.  You can either lead your organization to extract significant value from your supply chain and convert it to a competitive advantage, or you can continue to focus on getting the best contracts and SLA’s while your competitors are stealing your lunch.

Twenty-five years ago Professor William Ouichi of the University of California did not have suppliers in mind when he proposed that American companies could meet the Japanese challenge. He believed they could do this by changing their organizations faulty assumptions about management and the workforce that had led to sub-optimal productivity.  The relevant point here for us is that the assumptions we make about people drive our behavior towards them.  You could even refer to this as a self-fulfilling prophecy.

Professor Ouichi revolutionized organizational theory by proposing Theory Z, a theory that workers were motivated by long-term employment, collective decision making, individual responsibility, evaluation and promotion, and the feeling that the company had holistic concern for them as an employee.  We will similarly offer up our version of Theory Z but in a totally different context.

As both practitioners and consultants, we have observed significant sub-optimization in the value created by supplier relationships. Fundamentally, buyers and sellers have entered into relationships with a predetermined set of assumptions and these assumptions drive the wrong behavior on both sides. When relationships begin and are managed in such an antagonistic manner, value is lost.   We believe that most sourcing/supply chain professionals have the wrong end point in mind and therefore end up leaving a significant amount of unrealized value on the table.  When the end point is the best contract supported by well-defined SLAs, the behavior from both sides is defined and constrained by the contract.

The contract should be nothing but a step along the way to establishing mutual value creating relationships where both parties are focused on generating a significant amount of value for each other.  Some of the best value-creating activities occur after the contract is signed by starting with a focus on a “Mutuality of Interest.” Both sides, the supplier and buyer organizations, need to be cognizant of this “Mutuality of Interest” so that the benefits are realized from the beginning and throughout the relationship.

The most mature organizations have seen the benefits of this approach to Strategic Sourcing. There is a proactive push and fundamental change being made to foster development of the skills necessary to manage the activities essential to capturing the promised “mutual” benefits and to identify additional “mutual” benefits of a partnership between supplier and buyer organizations.   That is quite a fundamental shift and it requires a new set of attributes:

The shift requires a new set of skills, behaviors and competencies.  Is your organization making the shift?

Regards,

Dalip

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Social Media and the Supply Chain

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As I was looking through my normal round of websites this morning, an article caught my attention on mycustomer.com. 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?

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If I had a dollar for every time I’ve been asked that question-well you know how that story goes?  At every single conference across the globe I’ve spoken at, that question has been asked in some way, shape or form.  Almost every single client has asked that question or some variation thereof.  And the ones that did not should have asked that question.  You can think about it in terms of what is a critical role that you must fill in your Sourcing/Supply Chain organization or any other internal “support” function (IT, Finance, legal) or shared service to confirm my contemporary bona fides.

Before I give you the answer, we need to make sure that we are asking the right questions.  And for those of you that have been through TMG’s decision making module, that refrain will sound very familiar.  Remember the New England Journal of Medicine exercise where physicians were asked to evaluate patients for toncillectomies and they were wrong 49% of the time ?  Otherwise, we can turn to what a couple of my friends said.  Pete says “The most common source of mistakes in management decisions is the emphasis on finding the right answer rather than the right question.” My friend Al goes on to say basically the same thing: “The formulation of a problem is far more essential than its solution, which may be merely a matter of mathematical or experimental skill.”

Typically, would you agree that in most cases (not including yours of course):

  • Organizations struggle with convincing their stakeholders of the value they create?
  • They face strong resistance in expanding their influence or footprint?
  • Budget wars are an annual and the quarterly norm?
  • Savings numbers are always questioned for validity?

If any of the above is true, then the answer to the title becomes self-evident.  A Marketing person!  I kid you not.  In the first Sourcing organization I set up in my career 16 years ago we had a full time marketing person (Peter).  His job was to constantly market our services and we took a marketing approach to it.  This wasn’t about creating some spreadsheets or graphs of generated savings.  He had to make sure that we continued to expand our footprint inside the company.  To sell our value to the stakeholders.  To keep in constant communication with them.  To make sure we were getting repeat business.  To ensure that we were getting referral to other stakeholders.

Now I’m sure that you are doing all of the above but I’m talking about most of the other organizations.  We have not seen  a true marketing focus being applied to this effort and I’m always surprised by that.  Especially given the tools available today.  It does not necessarily mean that you need to have a full time dedicated resource but you do need to fulfill that role.  So next time you are sitting in a budget meeting being asked one more time to take another haircut, you may want to think about your marketing effort.  Oh, Pete is Peter Drucker and Al is Albert Einstein.  Let me know if you would like more details.

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