I recently finished reading Jared Diamond’s book Guns, Germs, and Steel: The Fates of Human Societies, a quick walk through the history of the last 13,000 years of human society, and I was intrigued by the parallels between his section on the development of written language, and how Supply Chain seems to be progressing with frameworks. The section of his book that deals with language stresses the importance of having written language to administer large human organizations –empires, kingdoms, nations, etc.
Over the past two weeks I have had the pleasure of meeting with senior executives from a variety of companies in training situations where we could talk freely and discover opportunities within their businesses for improving their supply chains. SCC trainings—particularly in-house private trainings – take a practical, hands-on focus to supply chain improvement. Managers frequently leave the trainings with specific ideas and improvement programs laid out and ready to go. Continue reading
Many years ago (September, 1994) I read an Scientific American article “Software’s Chronic Crisis” with interest – my job at the time being precisely “Software Development”. The article introduced me to “CMM” (Capability Maturity Model) in software development, as an aid to improving software to avoid the inevitable ‘crisis’. “Maturity” here didn’t connote age (there are certainly very old IT organizations I’ve worked in I would hardly call ‘mature’) but rather ‘well developed’. Continue reading
As a trainer and advocate of standard process languages and standards for metrics I frequently talk to companies that don’t do classic manufacturing; services providers like banks, insurance companies, software companies, etc. Their observation is that they like the value of the standard reference models (SCOR¹, CCOR and DCOR) but they are too manufacturing oriented: “We buy and sell DIY hardware and tools, we don’t make them” and “we provide banking services, we don’t make or ship money”. The question I would like to address here is whether standard reference models can be deployed in non-manufacturing companies.
It was Abraham Maslow who said that when you have a hammer, you treat everything like a nail. My hammer is the SCOR language which I normally use to describe supply chain processes. With this hammer in hand I find that many processes appear to be some form of supply chain process. An organization or function performs supply chain processes if it delivers some type of goods or services. The problem I found is that the language may not match. Let’s take IT as an example. Continue reading
Syndrome 1: You’ve developed a beautiful supply chain process model, metrics model, with depth and subtlety that allows you to probe with anything from automated software, to six-sigma statistics, is easy-to-explain to executives and has that rare power to illuminate business rather than merely describe. You team performs analysis, and begins redesigning processes to be more efficient and effective, and… when you work with process owners, they look at the starting process and ask the hated question “What’s this? I don’t recognize this…”. Continue reading
“When you have a hammer,” so the saying goes, “everything looks like a nail.” The implication, of course, is that when you have a good problem-solving technique, you tend to look at every problem and see examples of problems that would benefit from the use of your technique. By extension, this saying suggests that people with hammers often try to use them when they are completely inappropriate. Continue reading
After speaking at a Six Sigma conference I was asked what my definition of what supply chain management is and how it differs from Lean Six Sigma. The topic of my presentation was how to identify important change programs. I am not sure what exact wording I used but I must have first stated that I am not a Lean Six Sigma expert, only a Six Sigma customer, but my observation was that Six Sigma did not seem to use standards. My definition must have included process measurement, modeling and change planning.
For me supply chain management started 5 years ago with a request to join a group of individuals traveling to Minneapolis who were going to be trained in SCOR. The training experience was both positive and negative. The positive aspect was and remains the standard definitions for processes and metrics. As a former reporting manager I have spend many meetings explaining why we adopted a certain set of metrics and then sat through the arguments of what the definition should be according to such-and-such. Today whenever somebody asks the question how to measure an aspect of the supply chain the response is simple: Continue reading
In a previous life I was in charge of management reporting for the pan-European logistics organization for Compaq. My team was responsible for monitoring and reporting the daily, weekly, monthly and quarterly performance and progress of the operations. We provided reports on shipments-to-date, invoices send, estimated shipments for the remainder of the day, week or month, order cycle time and average shipment lead-times, and on and on. None of these metrics would keep me awake at night or would cause heavy discussion on accuracy and validity of the metric. That was reserved for one metric: “Predictability”.
Predictability was our #1 metric for customer satisfaction. It also had all the characteristics of a badly chosen metric:
- No real ownership (read: accountability)
- Nearly impossible to root-cause
- Home-grown, thus no realistic benchmarking information
- Multiple interpretations (shipped v. delivered, factory v. logistics)
- Everybody was impacted by it’s poor performance (as it was linked to profit share)
- And maybe most important: Unclear value to the customer
Recognize this type of metric? Continue reading