Benefits Not Tools

One of the most challenging problems I encounter with Supply Chain teams, and executives, is the lack of credibility when they try to get support, sponsorship, approvals for major supply chain transformations. It was the #1 problem when I interviewed executives over the last 10 years in supply chain events. It manifests itselves in transformation programs when I hear “How do we know this is going to work?” or “We spend so much money on IT but we never see anything improve, how is this different?” in discussions with VP-level, or even C-level executives, and the teams begin to flounder. They’ve had this discussion before, and embark on one of three paths – discussion of features, discussion tools, or discussion of problems – hoping they can get buy in for a transformation project.

Each of these has a good likelihood of failing to gain credibility – the facts of gaining features, better tools, or solving problems may be indisputable, but sponsors aren’t looking for the tools, or the path in particular, they’re looking for a logical reason their business pain points are eliminated along with measurable outcomes.Here’s an example: we want to implement SAP module XYZ so we have better capabilities in Logistics Planning, and roll it out worldwide.

It’s a tool, it’s a set of features, but sponsor support may balk: “We just implemented SAP module ABC but nothing changed.” “Yes, but…” goes the discussion, “Yes but we’ll have much better integration. We’ll have better algorithms. We’ll have more up-to-date software.”

My advice with these organizations is to consider what the sponsor issues really are, and ensure that the team focuses on outcomes rather than items. For instance, a pain point might be that there is no consolidated view of Logistics Performance. Each team has their own reporting, there aren’t consistent owners of key performance indicators, and except at the global P&L level, there’s no way to set or judge performance. The better discussion at this point would be to focus on the pain point – inability to manage and improve logistics performance – and how this program will transform Logistics Planning to have consistent set of plans (one plan), clear owners of plans, consistent reporting on outcomes to compare to plans, and a way of taking the reporting data to drive improvements each review cycle, with goals allocated to the process owners.

The path to do this may be an integrated module XYZ which provides consistent planning data, integrated reporting, and a technological and feature-based path to eliminating the pain points. It’s instrumental, but not the goal. Measurable Outcome? Our target is 2%, or 5% or 15% improvement on logistics cost by comparing optimal plan to actual, and forcing adjustments. Sponsor, you decide how much improvement you need.

My takeaway on credibility for programs is: ask yourself – am I proposing a tool or a practice, or a review or cataloguing of problems, or am I providing a measurable outcome that results from eliminating known pain points in operations. Its as simple as asking “is this the means to the end, or the end itself”. Credible teams start with the end, then discuss the means. The rest, they discuss the tactics and resources, and end up explaining lack of results.