Supply Chain Management:

From Vision to Implementation

Chapter 14: People Management: Bridge or Barrier to SCM

Chapter 14: Learning Objectives

1. Describe the characteristics of a SC manager. 2. Describe the vital role people play as a bridge or barrier to SC collaboration. 3. Explain how to cultivate a culture of empowerment. Discuss the ABCs of empowerment.
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Chapter 14: Learning Objectives

4. Explain the importance of investing in employee capabilities through training, especially in the areas of cross training and teaming. 5. Discuss why developing and integrating human and technological resources is critical to developing world-class processes.
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People Management
We know how to invest in technology and machinery, but were at a loss when it comes to investing in people.
Peter Senge

The Supply Chain Manager

What are the characteristics of the person in the middle? What skills and mindset does a true supply chain manager need?

The Supply Chain Manager

True supply chain managers are defined by mindset and skill set.
Strong functional skills Holistic thinker Analyzes trade-offs rigorously Builds collaborative relationships Executes with discipline Exemplifies leadership Embraces change
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The Most Valuable Asset?

If you leave us our money, our buildings, and our brands, but take away our people, the Company will fail. But if you take away our money, our buildings, and our brands, but leave us our people, we will rebuild the whole thing in a decade.
- Richard R. Deupree, CEO Procter & Gamble, 1947

Great Management Lies

1. Employees are our most valuable asset 2. I have an open-door policy 3. You could earn more money under the new plan 4. We're reorganizing to better serve our customers 5. The future is bright 6. We reward risk takers 7. Performance will be rewarded 8. We don't shoot the messenger 9. Training is a high priority 10. I haven't heard any rumors 11. We'll review your performance in six months 12. Our people are the best 13. Your input is important to us - Scott Adams 8

Investing in Employee Capabilities

Educationmust reach everyone and it will have to go all through life. If you stop, you become obsolete, you cease to be competitive. The obsolescence curve has compressed, Bud Lalonde estimates the amount of investment that must be made in acquiring new skills to avoid obsolescence.
10 % to avoid obsolescence in five years 1990 20% to avoid obsolescence in three years 2000

P&G Leadership Development Attributes

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John Deere and SC Education

Deere offers over 50 courses to Deere employees and employees at first and second tier suppliers. In addition to upgrading skill sets, these professional development classes bring managers together in a learning environment where they can build relationships.
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Deere & Company Training Courses

Advanced EDI Advanced Product Quality Planning Apples and Oranges Application of ABC Data Benchmarking Business Report Writing Cash Flow Analysis Cell Manufacturing Compensation Strategies and Incentives for CI Conflict Resolution: Team Operating Skills Continuous Process Improvement Continuous Process Improvement (Advanced) Continuous Quality Improvement Cost/Price Analysis Creative Focus Finance for the Non-Financial Manager Group Problem Solving Interviewing Techniques Introduction to ISO/QS 9000 Inventory Management ISO/QS-9000 Internal Auditor/Team Training ISO/QS-9000 Quality System Documentation Job Instruction Workshop Leadership Skills Mistake Proofing Presentation Skills Preventive Maintenance for Cycle Time Reduction Preventing Discrimination and Sexual Harassment Process Mapping Project Management
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Deere & Company Training Courses

Customer ServiceA Strategy for the Future Customer Service II Cycle Time Reduction Decision Focus Design of Experiments Developing Communication for Increased Collaboration Developing Employees Developing High Performance Teams Effective Facilitation Effective Job Skills Facilitator Skills Failure Mode & Effects Analysis Root Cause Analysis Setup Reduction Teaching Techniques Team Effectiveness Team Effectiveness II Team Focus Team Problem Solving Time Management Win-Win Negotiations Working in a Changing Environment World Class Manufacturing Writing Skills

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Management Training
In addition to problem solving and role specific training, managers should receive training in the following: Overview of the organization focusing on its history, culture, and objectives. Review of customers, their needs, wants, and success factors. Analysis of key suppliers, including their competencies and capacities. Exercises in communication, teamwork, and paradigm shifts. Specific instruction regarding the firms performance measurement and reward system.
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Training Program Problems

Management training is a large investment by a company.
Managers often change employment after only 3 to 5 years.

Job rotation and manager trainee programs delay time between hire and permanent job placement.
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Cross-Training
Cross functional workers emerged with Lean manufacturing principles. Toyota, the inventor of Lean, seeks to develop world-class process capabilities based on development and integration of people and technology.

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Cross-Training - Lessons from Toyota

1. Requires heavy investment in problem solving skills. 2. Requires broad job descriptions.
At NUMMI, the number of job descriptions was reduced from 200 to 3.

3. Requires management to empower employees with the authority and responsibility necessary to make real decisions that make an impact.
Jidoka man and machine system; the authority to stop the production system when problems are identified.

4. Requires management to develop collegial relations with the workforce.

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Cross-Experienced Management Team

Goal is to provide managers an understanding of roles and challenges inherent in diverse value added activities throughout the company. Many companies have developed multi-year manager trainee programs that include job rotation, providing trainees with extended experience within various functional areas.
Helps to build relationships, reducing barriers to cross-functional cooperation.
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Job Rotation Programs

Develops an appreciation for the needs and wants of customers Become familiar with products and value-added process Gain perspective of different functional areas and how the functional areas work or don't work together Learn the "language" spoken in each area Establish relationships, improving future decision making, reducing barriers to collaborative initiatives Develop appreciation for workers that make the product or interface with customers Gain understanding of the role outside suppliers play in product development, production, and distribution
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Job Rotation Programs

Job rotation can continue after initial hiring.
Communicates that the company is serious about systems thinking and teamwork. Improves cross-functional communication.

Can be accomplished with assignment to cross-functional task forces and project teams.

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Types of Teams
Type of Team Advisory Councils Team Objectives Senior-level steering committees, customer advisory boards, and supplier councils - provide feedback, expedite communication, and garner commitment for key initiatives. Design and acquire needed equipment. Several tasks must be performed to meet key objectives: 1) determine specifications, 2) select a supplier, 3) conduct negotiations, and 4) install and maintain equipment. Develop the expertise and relationships needed to establish a strategy for managing the acquisition of important commodities over time. They also investigate and select one or more sources for a given material or service. Take many forms and consist of many different players. Sourced inputs represent 50-80 percent of the cost of good sold suggesting that considerable effort be targeted at improving both supplier relations and supplier processes.

Capital Equipment

Commodity

Cost Reduction

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Types of Teams
Type of Team Customer Relationship Cycle-time Reduction Information Systems Team Objectives Work to build relationships and understand specific customer needs as well as to respond to customer inquiries and resolve customer problems. These teams increasingly work to design tailored services for the most important customers. Responsible for reducing time at key processes. The increased use of collaborative planning, forecasting, and replenishment and vendor-managed replenishment has made inclusion of outside representatives valuable. Determine information needs of the firm and design the information systems to provide this information. Information system specialists run the team but they need the input from the areas where information is either collected or used. Seek to reduce inventory levels while providing an uninterrupted flow of materials. Sourcing, Operations, and Marketing work to develop dock-to-stock, lean-materials, and coordinated promotions/replenishment systems Numerous ad hoc teams or task forces are used to solve specific problems, drive the adoption of new technologies, or implement a strategic initiative. These teams are almost always dissolved upon completion of the specific task.

Inventory Control

Problem Solving

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Types of Teams
Type of Team Product Development Quality Improvement Supplier Development Value Analysis Team Objectives Reduce time needed to bring a product from concept to market. Consist of representatives from Marketing, Production, Purchasing, Engineering, and Quality as well as representatives form both customers and suppliers. Work to improve the quality of products and processes. Members come from Production, Purchasing, Quality Assurance, and Engineering as well as supplier and customer representatives to assure accurate quality definition. Help suppliers upgrade process engineering, manufacturing, and quality capabilities. These teams consist of representatives from selected suppliers as well as from Production, sourcing, Quality Assurance, and Engineering. Study a product or process and all of its components to determine how to lower cost or improve quality. These teams often include representatives from Engineering, Marketing, Operations, and Purchasing.

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Advantages and Disadvantages of Teams

Advantages of Teams Decision Ownership Leveraged Diversity Faster Task Completion Better Organizational Understanding Disadvantages of Teams The Never-ending Debate Groupthink Social Loafing Peer Pressure

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Factors Impacting Team Dynamics

Availability of Resources Clarity of Team Objectives Commitment of Members to the Team Complexity of Team Assignment/Task Executive Management Support Functional/Technical Skills of Team Members Open and Honest Team Communication Organizational Experience with Teams Overall Organizational Support for Team Success Performance Feedback and Information Support Measures Used for Team and Team Members Supplier Involvement Team Autonomy/Mandate Team Cohesiveness Team Leadership Team Longevity Team Member Personalities Team Process Skills of Team Members Team Reward Structure Team Size

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Team Design Process

Identify a well-defined goal that can be clearly articulated and communicated. Identify the variety of expertise and experience required to accomplish teams goals. Define time commitment required. Identify people with the right knowledge, experience, and complementary working styles. Determine whether individuals can be freed from current tasks and whether their participation will add more value to the firm than those tasks. Identify a skilled leader.
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Working Styles
The Quick Starter - highly energetic, sees an opportunity and quickly mobilizes energy. The Fact Finder - very meticulous and oriented toward detail and analysis. The Follow Through - determined and focused on carrying out a task to its completion. The Implementer - very task oriented, with a particular penchant for hands on work.
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Requirements for Team Building

Common Goal - Successful teams possess a common goal Leadership Successful teams are led by wellrespected managers who understand team dynamics Communication - Open, constructive communication is fundamental to team success Cooperation - Effective teams sometimes require compromise Specific Roles - Team members understand their role and responsibilities
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Requirements for Team Building

Measurement - Clear and precise performance measures facilitate success Individual Responsibility - Each member accountable for individual and team performance Resources - Adequate resources/information is available Time - Chemistry emerges as team members spend quality time working together

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Team Development Process

1. Forming - determines team membership. 2. Storming - establishes direction, purpose, roles, responsibilities, and rewards for both the overall team and each team member. 3. Norming - establishes team rules and procedures, helping teams to synchronize their activities. 4. Performing identification of problems and opportunities, establishing a plan of attack, and then implementing the plan. A well-designed, well-trained team often finds that performing is the easiest part of the team process. 5. Adjourning - up-front definition of key milestones and a specific ending point in terms of outputs and a target completion date. Once a team completes its designated task, it should disband.
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Team Measurement
Measurement drives behavior Teams require the correct balance between team based measures and individual measures.
Emphasizing team outcomes can lead to social loafing and a loss of individual motivation. Emphasizing individual outcomes can undermine team performance.
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Establishing an Empowerment Culture

An empowerment culture precedes the creation of knowledge workers and the learning organization. Knowledge workers recognize opportunities, analyze problems, and proactively move to find creative solutions.

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Pathway to Empowerment

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Leadership - The 7 Rights

1. 2. 3. 4. 5. 6. 7. Get the right people Communicate the right expectations Provide the right training Measure the right things Reward the right behavior Support with the right resources Give them the right opportunity (i.e., get out of the way).
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Goal Setting
Aggressive and systematic goal setting drives out complacency, helping to sustain momentum of an empowered workforce. Failure cannot be punished, it must be used as a learning experience. Managers must work with employees to facilitate goal attainment.
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Communication and Teamwork

Managers must communicate expectations, corrections, and praise. Managers must recognize team members for their contributions toward overall success. Recognition and empowerment increased motivation and commitment.
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ABCs of Empowerment
Affirmation positive reinforcement to the workforce making them feel truly valued. Belonging employees must feel a sense of community and commitment. Competence the company must invest in employee capabilities throughout the organization.
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Employee-Oriented Companies
Services for employeese.g., a gym & health-related programs Benefits & salaries suggest company cares about employees Company asks for employees opinions & input for decisions Treat each person as an individual Employees understand their position & are knowledgeable Company continuously trains & updates skills of employees Employees are happy doing their job Allowing employees to advance & grow in the organization Open communications between employees & immediate boss

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Employee-Oriented Companies
Meetings are more like town hall discussions Management is openly willing to receive feedback Trains employees beyond job requirements Company is generous with benefits Fair level of paycompetitive level Provides services to employees that are not job related Work space is clean, user friendly Employees use updated equipment Well run human resource departmenteasy access to services

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Employee Satisfaction Factors

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Employee Satisfaction Factors

Characteristic Compensation Employee Perceptions of Characteristic Hallmark of a great company to work for. Workers want to be treated fairly and they regard a companys financial package as the acid test of fairness. Great companies have learned to combine salary, bonuses, stock options, insurance programs, and the company retirement plan into a comprehensive package that communicates a concern for their employees well being. Need to make work fit within a holistic lifestyle. The goal is to balance work with personal and family needs. Companies are responding with an assortment of services and benefits including family counseling, savings bonds for children, college tuition grants, parental leaves, time off to attend parent-teacher conferences, and lactation rooms for new mothers. Well-designed work place that is safe and aesthetically pleasing. Convenience of on-site child care, on-site medical care, or on-site concierge services. Some companies offer massages, dry cleaning, travel services, and pet care. Employees also value access to exercise programs and fitness facilities.

Family Friendly

Facilities

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Employee Satisfaction Factors

Characteristic Accommodating Workplace Employee Perceptions of Characteristic Flexibility is an important perk. Opportunity to schedule their own hours, shorter workweeks, telecommuting, and flexible-time programs all allow workers to balance work and family obligations. Paid vacations and opportunities to take time off without pay also provide for personal renewal. Great companies recognize the need to avoid burn out and provide workers opportunities for revitalization. Desire to work for an ethical company. Employees feel it is important to work for a company that promotes diversity, is environmentally sensitive, and is involved in the community. Paid time for charity or volunteer work is particularly attractive. Managers who know their employees and acknowledge their accomplishments and concerns are a key source of corporate enthusiasm. Promotes open communication and facilitates a sense of collegiality. Employees want to know that their ideas are valued, seek empowerment, and want to be trusted.

Enabling Culture

ManagerEmployee Relations

Invest in Employee Employees recognize a need to stay current with the latest developments in their Skills fields of expertise. Company-sponsored education programs, skills-based training, and tuition reimbursement programs are beneficial.
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Integrating People and Technology

Organizations needs must be matched with technology. As a general rule, the simplest technology that will meet product and process needs should be given priority. Organizations technology strategy should support long-term approach to building worldclass value-added processes.
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Integrating People and Technology

Adequate support must be in place to implement and support new technologies. The following technology pitfalls should be avoided:
The follow-the-leader mentality The shiny-hardware syndrome The island of automation
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Integrating People and Technology

Workforce must be viewed as a critical resource and the necessary capital for training programs must be committed. Once a firm invests in workers, it must give them the responsibility and opportunity to use their increasing skills. Managers must develop familiarity with value-added processes and key technologies. Appreciation and understanding of the abilities of line workers and managers in other disciplines is needed to coordinate and integrate competitive efforts. Appropriate performance measures that do not penalize workers and that promote revolutionary enhancement should be adopted.
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A Return to the Opening Story

Based on what you have now read and discussed: 1. How did Doug and his team get so caught up in SCM that they forgot to get everyone involved? What are the dangers of having the task force do it all? Can SCM thrive if it doesnt become part of the culture? 2. What should a supply-chain training program look like? Who should be involved? How much training is needed and for how long? 3. What is a culture of empowerment? What does it look like? How should Doug go about cultivating it?
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