How is Your Supply Chain Chutzpah?
Article by Lora Cecere from Supply Chain Shaman; published on September 24th 2013
Chutzpah: A personal confidence or courage that allows someone to do or say things that may seem shocking to others
If you are fluent in Yiddish, you know chutzpah, meaning nerve, is akin to the Spanish word ”cojones” meaning courage, but without an anatomical context as in tener cojones.
So, as I sit in this uncomfortable seat, fighting sleep, winging my way to Chicago, I am asking myself a simple set of questions. My circular logic goes like this. The supply chain world is dominated by men. Men have cojones. So, why is it that in this male-dominated world of supply chain there is very little chutzpah?
In short, I think that it is because we want to please. Commercial teams are paid to sell. Marketing teams have an agenda to increase market share. The supply chain team takes and ships orders. Everyone claims that they care about the customer, but the system is ineffective.
The supply chain team with chutzpah has courage. They build the end-to-end value chain outside-in and align commercial and operational strategies. They focus on improving value to the customer. Those without any chutzpah define the “supply chain” as an organizational function that focuses only on distribution, manufacturing and procurement. The later definition fits most organizations that I see.
So, how do you increase your chutzpah? Here is my five step plan:
1) Help Commercial and Business Leaders to See the Supply Chain as a Complex System. Many supply chain teams have aggressively cut costs to fund an organization’s growth. Sometimes, in this process, they have cut muscle, not just fat, limiting the potential of the supply chain to balance costs, inventory cycles and complexity. I work with an organization that is using Llamasoft’s mobile Sherpa application in the S&OP meetings. When the commercial team makes one of those eye-rolling, off-the-wall requests, the team quickly shows the group the impact of this hairy, audacious go-to-market plan on the base business. They then say, “We can do that, but here is the impact.” And, of course, the commercial team quickly sees the relative importance of their request. The visualization of the impact to the commercial teams on base business helps to drive alignment. Without the visualization, the commercial teams see the supply chain team as a bunch of whiners. This approach lets the commercial teams actively participate in the decision.
While 37% of companies have a Supply Chain Center of Excellence, most define it too narrowly. Only half of the Centers of Excellence meet the expectations. The Center of Excellence is successful when it SERVES the business. It fails when it becomes ACADEMIC. The most success happens when the supply chain Center of Excellence is built with a goal in mind of building cross-functional alignment. Use the work in the Center of Excellence to help drive the cross-functional understanding of the supply chain as a complex system, and facilitate a cross-functional understanding of trade-offs. When the Center of Excellence is defined to drive alignment there is 3x greater alignment between the finance and marketing teams.
2) Say Yes and Mean it! The supply chain team is pressured to say “Yes” to commercial plans. However, trouble brews in Dodge City when the promise cannot be delivered due to reliability issues. When given the choice between fast and reliable, chose reliable. Actively design the supply chain to say “Yes” and mean it.
3) Challenge the Status Quo. Last week, I was with a client that is working with SAP to run their supply chain planning system, SAP APO, on SAP’s HANA platform. I asked them “Why?” They looked surprised. I believe that there are many wonderful uses for HANA like visibility across multiple ERP instances, but I question on why to continue to invest Advanced Planning System (APS) logic, like APO? The basic footprint of APS was defined when planning was constrained by 32-bit architectures. Computing power has increased 100X since the 1990s, but the definition of APS remains unchanged. I think that our new opportunity lies in redefining planning not just making old approaches faster. The supply chain team with chutzpah asks hard questions.
4) Build Supply Chain Potential. I recently interviewed Daniel Weber, leader of the Beiersdorf supply chain team for the Supply Chain Insights Podcast Series Straight Talk with Supply Chain Insights. Listen carefully to Daniel’s story as he shares how he used the need to improve customer service as the means to convince the company to REDUCE inventory. This starts with the belief that you can improve the potential of this complex system called supply chain to both improve customer service while reducing inventory.
Similarly, I love the results of Hershey and the work of Jason Reiman’s team. Check out Hershey’s impressive results in figure 2, and give Jason a “Congratulations!” on his new promotion to Vice President.
Jason and Daniel have both increased the potential in their supply chain to manage trade-offs. Many, unfortunately, just do not believe that this can be done.
5) Build Muscle at the Core and Innovation at the Edge. The supply chain leader with chutzpah has the courage to invest in new technologies for the supply chain. They actively lead efforts to test and learn through new forms of analytics. They understand that there are no “best practices” that come out of a software box; instead, they realize that they have to learn from others to tailor processes to fit their needs based on a clear supply chain strategy.
So, what do you think? Do you think it is appropriate for me to ask for my family to lay me to rest on a small grassy knoll at my farm underneath a small marker that says, “Here lies Lora Cecere. A small-town girl with lots of chutzpah?”
You needn’t send me your replies on this one