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Strategy & Management

Tedious Supply Chain Jobs Turn Away Good Talent

November 5, 2016 by Matt Cook No Comments

Processing orders in Chicago, 1937; image by gallimafry.blogspot.com, CC license

In the most recent annual Deloitte supply chain study only 38% of executives felt they had the right skills in their organizations.

Why? Theories range from supply chain not being cool for new grads, to the predominance of men in the function (scan the room at a supply chain conference and you mostly see ….middle-aged men).

But another reason is that most supply chain jobs are tedious and boring. Ship stuff in. Ship stuff out. Key data into a PC, transfer it from one system to another. Look up stuff in tables. Compare what’s in the system to paper documents. Fix problems in failed transactions, summarize inventory figures, change or fix purchase orders, and create another report using pivot tables. Yawn.

Despite the hype about technology revolutionizing the supply chain, organizations simply haven’t adopted in a widespread way the automation needed to eliminate repetitive functions, because most large enterprises are risk-averse, slow to change, and don’t bother to make the business case.

Companies that have adopted expensive ERP systems still need people to shepherd transactions in and out of different applications. Companies that for years have had extensive EDI networks — which were supposed to automate basic commerce between businesses —  still touch every customer order.

The next generation of supply chain leaders is not drawn to jobs involving  banal tasks performed in 15 year old systems. You can see for yourself in many organizations – bright college graduates with supply chain or business degrees, bewildered at the dumb things they have to do in outmoded systems.

Companies staying on non-automated platforms guarantee that a certain percentage of their work force will never perform at their highest potential, despite the many commitments by nearly every employer to “developing talent.”

Consider logistics claims processing. A company making 75,000 deliveries each year will have to manage anywhere from 7,500 to 15,000 claims, maybe more – these are refusals to pay all or a portion of the invoice because of damage, unsatisfactory service, faulty products, incorrect pricing, late deliveries, etc (there are a million reasons).

In a non-automated environment, firms will staff people to collect paperwork, look up data in systems, copy delivery and invoice documents, investigate claims with warehouse and transportation providers, and assign a status to the claim for future credit (or not) to the customer.

Substitute PCs for typewriters and you have a work environment not unlike the one pictured above, from 1937.

In an automated environment, documents are scanned without human touch, sorted, filtered through business rules, and categorized into a database from which humans glean valuable information, such as which customers have a pattern of making claims for the same reason month after month.

In a non-automated environment, human talent is used to process claims; in an automated setting it’s used to reduce claims. Which role would a young supply chain professional find more interesting?

There are many solutions on the market today for automating these transactions but the best ones go a step further by not only automating but managing processes for you – removing completely from your enterprise the most burdensome non-value added work, yet delivering to you the valuable data needed for management decisions.

Some companies acquire and manage automation software – a viable option but less valuable than outsourcing. Software you acquire has to be configured, integrated with your systems, and maintained via license agreement and user support.

In the end, however, how you automate is much less important than whether you do so. With automation services priced where they are today, an attractive payback is not difficult.

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Strategy & Management

Blow Up Your Supply Chain

October 2, 2015 by Matt Cook No Comments

Image by genius.com

Yes, wouldn’t it be satisfying to scrap your entire big mess of a supply chain — all the inefficiencies, dysfunction, lousy systems, and constraints that constantly annoy you and your customers — and start over fresh?  You can do that, in a figurative sense, through some creative collaboration with internal teams and outsiders as well, and the outcome can be much more than just a fun day of pretend.  This method is known as a “Merlin Exercise,” and is used by the executive coaching firm Paracomm, among others.

Imagining a shiny new supply chain escapes the incrementalism of repeatedly layering small changes on top of the existing supply chain without truly breakthrough results.  This is particularly common in applying software solutions to business challenges: the solution solves the immediate issue, but no more.

You can’t get there from here.  That is, you can’t get to your ideal supply chain from here; you must get to it by approaching it from the future.

Preferably, you have assembled the best thinkers and functional experts in your organization for this venture.  In general, the event looks like this:

Everyone is to forget about software applications and technology in general, and focus instead on outcomes: sales have doubled, costs have been cut 25%, and alternative channels are growing the business.  This could be three, five, or ten years from now.

The group must determine how your enterprise got there. What events or breakthroughs occurred just prior to the leap in business performance?  Don’t just generalize, paint a picture with details.

Continue working backward from the sublime state you’ve imagined for your supply chain, identifying the key events where capabilities (technology or otherwise) advanced your business to the next step. At each point in the timeline, ask how or why the new capability came about.

When you get to today, you’ll see the progression of events from now to the future, and the next few steps from today on won’t look as daunting or impossible as would one giant leap from today to the perfect state.

Example: Sales have grown 25% due to mobile and online purchases.  Why? Because you enabled purchases on these platforms. Why and how? Because the e-commerce pilot you ran with several suppliers demonstrated significant sales gains. Why and how? The pilot revealed that online and mobile customers are a different demographic and buying population than what you normally see for your retail and catalog customers.  This convinced management to expand the pilot.

One reason this exercise works is that the path to excellence is not so clear when standing in the present, surrounded by today’s paradigms.  But transported to the future, the mind is free of these burdens, and the path backwards is easier to see.  Used on a regular basis, this type of visioning can also transform organizational thinking, placing much more emphasis on strategy and the future of the enterprise.

 

 

 

 

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