In my last post, I discussed how companies have realized that they need to develop skills outside of the confines of enterprise resource planning (ERP) and instead cultivate their own internal skills for supply chain leadership. Many of today's leading global supply chain brands recognize that to create a long-term view of achieving supply chain excellence, organizations must take a strategic view beyond the day-to-day issues.
Dealing with the realities of the multilevel, cross-geography, and intra-enterprise supply chain model has been a challenge to many well-known brands. As companies reassess their strategies for collaboration, continuity of supply, and competitive advantage, the role of the supply chain center of excellence (CoE) becomes a key part of the organizational model.
The idea behind a CoE is to inject innovation into an organization's culture through the cross-functional engagement of key stakeholders who actually know how the business works and where the real opportunities are hidden. A CoE initiative is usually commissioned by the executive team as a way to shake things up and begin to address problems holding the company back or causing it to lag behind its competitors. In short, forming a CoE is usually an acknowledgement that a company's operational performance needs improvement.
Gone with the wind (or supply chain)
Supply chain CoE initiatives sometimes play out like a classic movie: familiar, stiff, a bit boring, and sometimes far too predictable. Our supply chain CoE “heroes” begin with a potential for a new beginning but soon face adversity, opposition, and ultimately, denial. If you want your supply chain CoE initiative to resemble a blockbuster action film, you need to develop a cultural bias toward this end-goal within your organization.
Wondering where to start? Consider some of these best practices that we at E2open have developed with our clients:
- Commit with confidence to serve your customers above all else. Be humble and helpful, and listen to your stakeholders first. Before you develop a hypothesis about what is wrong, find out what is right about how your company competes in the marketplace (and then, promise not to mess that up). Get a C-level sponsor, if possible.
- Recruit your skeptics as advisers. Get their fingerprints all over your work. Communicate your challenges in terms of your customers' expectations. Let the customer be the bad cop, and you be the good cop. Be accountable for results, not activities.
- Don't chase key performance indicators (KPIs) just for show. KPIs cost money to collect. Only collect data that tells you something about your core performance to your customers. Measure transaction-level data to identify root causes to process exceptions. Don't over-summarize, generalize, or speculate without the facts.
- Collaboration is a conversation, not a command. If your supplier or coworker can't do something, ask why. How much can either of them do? When? How could they respond faster next time? How can you help them help you?
- Think globally about processes but execute locally. Stop “touching” (i.e., judging) the data. Let the problems surface, and fix the root cause. Encourage performance metrics to be more holistic and focused on customer success — not just your department (i.e., silo KPIs).
- Don't underestimate the power of using collaborative planning and execution to rewire your global processes. Tapping into business networks with existing data connections and best practice-driven processes can save your supply chain CoE initiatives a lot of time and greatly reduce risk.
And the award for best original screenplay goes to…
Systematic and sustainable improvement initiatives empower the central actors in your enterprise to write their own story, as opposed to letting outside forces and unplanned events dictate the plot. A supply chain CoE giving and taking active direction from engaged stakeholders drives pillars of creativity and resilience deep into the foundation of your enterprise, inspiring all actors to shine.
The movie is yours to script. Make it bold, interesting, and full of action. Authentic collaboration draws out your best talent, ensuring happy endings and successful sequels.