The Hindu Business Line : Breathe life into your supply chain

Having problems with supply chain? Borrow an insight from golf, says John Gattorna in Living Supply Chains,' from Pearson Education (www.pearson-books.com) . If you want your chain to be like the swing in the hands of Tiger Woods, rather than a golf club sitting in its bag, you need dynamic alignment, he says. "Seeking dynamic alignment means treating your supply chain as a living being, not a mechanical beast," explains the author. "It is all about energy, execution and the dynamism of people and movement."

To Gattorna supply chain is more than the hard assets such as "technology, warehouses and distribution centres, or trucks and planes." It is "any combination of processes, functions, activities, relationships and pathways along which products, services, information and financial transactions move in and between enterprises," he defines. "It also involves any and all movement of these from original producer to ultimate end-user or consumer; and everyone in the enterprise is involved in making this happen."

Stop thinking, therefore, that supply chains are a 50/50 mix of infrastructure and information systems technology, exhorts Gattorna. The ideal mix is "more like 45/45/10 - human behaviour, systems technology and asset infrastructure," he says, on the strength of evidence from "more than 100 consulting assignments."

Responsiveness and flexibility are not about doing one thing well, but rather having "the capability to do several things well, often concurrently." This, Gattorna explores in a chapter titled `customer conversations'. An extreme form of agility is the fully flexible supply chain, "a must-have competence that can be brought to bear as and when customers need extreme solutions." This might involve "a small group of highly skilled and entrepreneurial people being available on a stand-by or emergency basis."

Without "a dynamic capability to flex between different delivery service propositions," there will be service failures, leading to "reduced operational and financial performance." One of the many `living lessons' that the author offers for best outcomes is this: "Link behavioural segments at the customer end, and suppliers at the source end, with a network optimisation model that allows a clear line of sight on the best pathways through an otherwise complex network."

Interesting read is the chapter on `implementing a multiple supply chain alignment strategy' where Gattorna differentiates between organisational culture and climate. "Culture is the way of life within the enterprise's reality or `the way we do things around here'." It acts as "the glue holding the internal mechanisms together making it capable of accomplishing what an individual alone cannot." In contrast, organisational climate is "how the enterprise feels about itself, its mood, morale and the level of employee satisfaction at a given point of time." Culture is embedded and is a long-term capability that is difficult to change, but "climate is a short-term issue because it involves perception."

It is possible to map "current, ideal and preferred cultures in an organisation," asserts the author. Then, "change management initiatives can be carried out with more precision and with greater probability of success." To effect dynamic alignment, Gattorna advises the use of "a limited number of change levers or DNA building blocks" such as: organisation structure, reporting relationships and decision rights; job design; processes; IT systems; KPI or key performance indicators; methods of internal communication; and so on.

A key lesson for bosses is that change needs to be led not managed, "just as an army must be led rather than managed into battle." Leaders will produce useful change, while managers will focus on controlling complexity, says Gattorna. What is needed is "a leadership style that is predominantly visionary, tinged with the reality that any creativity or innovation introduced must solve a particular problem for a consumer." Importantly, to communicate his vision, the leader has to draw up `a corresponding set of values' that can ultimately permeate the supply chain.

A book that breathes life into SCM or supply chain management.

http://BookPeek.blogspot.com

D. Murali