What Was/Is Your “COVID” RLT? A Competitive Advantage?

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Hope you and your family continue to be safe.  You have heard us talk about the fact that COVID is  a Predictable and Inevitable event which means that we must deal with it before it happens next time.  It also means that you must therefore put in place the Organizational Competency and a way to utilize it as a competitive advantage.  That last part is easy – it’s been done for you.  More and more customers will be looking at their suppliers COVID RLT as a significant decision factor.  You can join us at the next PERT…… for a real live example of this being applied and how it has helped Mr. X with his RLT.

RLT or Response Lead Time is our initial attempt to put a label on a nebulous concept and try to  crystalize it so that we can discuss it and elaborate on it and make it something more tangible.  And I dropped the COVID label from that deliberately because your RLT is not about a virus or a pandemic, but it is about any dramatic change.  How long does it take for you to respond and that means not just your suppliers?   You will hear how Mr. X started measuring his suppliers on their RLT pre COVID which led to the resiliency that was critical during COVID.

So, what exactly are the elements needed to build this Organizational Competency?  None of them will be a surprise but it is important to put a framework together so that you can assess and improve.  We have been talking to a number of executives about how they have responded so far but more importantly what are they looking to do long term to help them respond better in the future.  Here are the elements so far:

Processes:  What is becoming clear is that the current processes have proven to be inadequate to deal with major changes like this.  And most of the inadequacy has not surprisingly been in the Strategic Processes (Change Management, Risk Management and Relationship Management).  In our opinion, this acknowledgement is critical in helping them move forward in building the Organizational Competency needed.

Talent:  Having the right competencies is proving to be critical in these trying times and it logically follows that the right competencies are the Strategic Competencies needed to support and execute the Strategic Processes listed above.  And our discussions with executives is confirming this.  They are quickly realizing if they made investments in those competencies, it is having a significant impact on their RLT.  You will hear a lot more about this from Mr. X at the next PERT session.

Supplier Relationships:  Optimizing supplier relationships is proving to be a critical element of this Organizational Competency conversation.  There are stories after stories of how critical relationships with suppliers helped companies respond sooner and vice versa.

Risk Management:  Measuring and analyzing the risk of a handful of Tier 1 suppliers and calling that Risk Management will no longer suffice.  Scenario planning, portfolio approach, Tier 2 inclusion etc. etc. are going to become critical.  The most critical challenge however is going to be getting Stakeholders to act and make decisions based on the risk analysis in the absence of a definite and clear WHEN about the risk.

Stakeholder Value Drivers (SVDs):  Focus on acknowledging the importance of and making them the basis of all the Strategic Processes and decisions is an absolute necessity in building this competency.  In fact, you may want to think of this as the foundation or the bedrock.  For example, getting to action and decisions mentioned under Risk Management above cannot be accomplished without this.

Join us in fleshing this out and helping develop this.  We will be conducting a benchmarking survey soon so make sure to participate in it.  The next PERT session is devoted to RLT with an actual case study being presented by a CPO( Mr. X) so make sure to join the discussion.

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Dalip Raheja is President and CEO of The Mpower Group (TMG). Dalip has over 30 years of experience managing large organizations and change initiatives. He has worked across the spectrums of supply chain management, strategic sourcing, and management consulting.

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