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tbrouill

Convergence of Methods

Posted by tbrouill May 27, 2012

In my last discussion I focused on language and definitions as they relate to the business world and the importance of ensuring that everyone on the team is working from the same definitions.  This is critical to the success of your team’s initiatives and meeting their objectives.  These sound like they should be simple factors and that these factors have been the topics for countless training programs, books, articles, even organizations are built around these concepts and methods.  I guess the simple fact is that this foundation of understanding and the shared vision and mission is an extremely tough proposition, to paraphrase an old saying – if it was easy, everyone would be doing it.

 

In this installment I will present my thoughts and suggestions why this is such a challenging topic.  I suggest that there are just a few reasons why this seemly simple objective is so elusive:

  • Sometimes in order to gain acceptance by leadership they must believe that they have uncovered a new method!
  • The training, speaking engagement, book fields are extremely lucrative and ‘new concepts’ sell!
  • As a bookend to my first point above, sometimes people have not heard of the practice, at least consciously, and truly believe it is new.

 

Let me start with the second point.  First off, I know it is cynical, but I still believe it’s a logical explanation for the phenomenon.  It also allows for at least a hint of intelligence in developing these ‘new’ programs. 

 

The first and third points are essentially opposite sides of the same coin.  While people will argue that their programs are all different because they have modified or added steps to the process, the bottom line is that they are working with the same program and rather than ‘tan’ they decide to call it ‘khaki’!

 

So based on an admittedly cynical evaluation of various programs and methods I can’t help but to come to the above conclusions.  This has been going on for as long as I can remember and every time the cycle turns, and especially with new technology and toolsets, a brand new crop of ‘new’ methods and concepts are ‘discovered’ to explain why its different this time around.  In fact I think one of the most honest is the simplest to understand ‘continuous improvement’.  This method I think was one of the key foundational methods to provide background and inspiration for the vast majority of new methods.

 

So let me walk through a few examples – Lean Six Sigma at its basic levels is a continuous improvement program with a couple of new, or renamed, steps and a whole lot of formal terms.  Business Process Improvements is another example of an extended continuous improvement program, the new point in this method is the introduction of the process maps.  Business Process Improvement methods is a little more honest, I think, because they do call out the fact that at its heart is a continuous improvement method.

 

These are just a couple of the more important methods and I know there are many examples of this same type of practice with many, if not all, of the generally accepted business methodologies.  I come back to an early observation I had in the supply chain.  I always wonder if there are really only a limited number of ways to be successful in supply chain management, or if there are only a limited number of consultants that bring the same concepts from client to client?

 

Now for the audience participation portion of this program……

 

What are your favorite examples of business methods or concepts that have at their base the same foundational concept?  Have you noticed a timeline involved in these ‘new’ methods?

Innovation and transformation are very powerful words that relate to, or describe, objectives that everyone in the business world strives for.  Everyone wants to be an ‘innovative leader’ or transform their organization, or industry; on the other hand, no one wants to be described as a caretaker and even reliable can have some negative connotations when compared to innovative.  These terms have been bouncing around in the back of my consciousness lately and just to keep them fresh I’ve also been participating in a couple of LinkedIn discussions related to these topics, especially as they relate to a continuous improvement program.  So I thought I would exercise these thoughts in today’s discussion.

 

First of all, I’ve been relearning a hard fact lately and that is that it is critical to first ensure that everyone in the conversation has the same definitions.  Starting anything in a team atmosphere before ensuring everyone is grounded with the same base understanding can provide the framework for a disaster and the definitions of ‘innovation’ and ‘transformation’ are no different. 

 

Second of all, it is important to define your framework for comparison.  This can be a little tricky but it is just as important to define your comparison framework as it is to ensure everyone has the same definition for your objective (innovation or transformation).    The comparison framework will lay the foundation for your efforts and should be defined as part of your objectives.  From its simplest format you should start with the agreement on will you compare your results against internal standards or external standards?  The type of comparison can make or break your efforts and overall success.  Here are two examples; we want to transform the operation of department ‘x’ into a leadership example for other departments in the enterprise; we want to transform the operation of department ‘x’ into a leadership example for the industry.  You can see that these are two very different objectives and the success factors are vastly different also.

 

So now how do you frame the objective and comparison in a manner that achievable and valuable?  This is not a trick question, believe it or not!  Your selection speaks volumes of your confidence and aspirations, it also speaks volumes of your common sense and focus on the benefits.  Remember, your objective for ‘innovation’ or ‘transformation’ should be to provide value to your enterprise!  I would argue that you provide value to your enterprise by achieving results in a timely manner.  I would also argue that you should take a long term outlook in your plans that identify interim achievable benefits.  So based on these guiding factors I suggest that you start with the internal comparison viewpoint and then transition into the external comparison for the long term results. 

 

Lets add a second factor, or tool, to this strategy; a continuous improvement program!  In fact, the continuous improvement program could very well be the secret sauce for your success.  In its best case scenario it would institutionalize a long term viewpoint and strategy execution that can be achieved by delivering interim achievements that build upon the previous achievements.   The trick to a successful and long term continuous improvement program is to identify when the ‘juice is not worth the squeeze’, at that point you should expand your comparison, introducing industry benchmarks for example, to re-invigorate your continuous improvement program!

 

Now for the audience participation portion of this program……

 

Have your implemented a continuous improvement program that seems to have stalled? 

 

Is your comparison framework based on internal metrics or external metrics?

 

Have you identified the reason for this?  Is the reason that you have reached the point where the ‘juice is not worth the squeeze’? 

I just read an interesting article that presented a hypothesis that it might be time to rethink Continuous Improvement as an important management philosophy.  The author mentioned some famous Continuous Improvement practitioners that have fallen behind in their industry and the author asks whether this might be the result of dogmatically following the continuous improvement practices to the point of squeezing out innovation.  The author also mentions the Japanese electronics industry that has recently been passed by the Chinese and Koreans in electronic innovations.

 

The key point for me regarding this article is the fact that ‘too much of a good thing can be disastrous, just as much as not enough of a good thing’.  The age old dilemma then is the ‘Goldilocks Syndrome’, how do you determine how much continuous improvement is ‘just enough’?  This is probably the most difficult question that an organization will encounter – how do I optimize my continuous improvement program to provide the greatest results for your organization?  Another, probably equally important question is – what types of activities will provide the greatest benefits from a continuous improvement program?  You must also balance these philosophical questions and theories against a benefits expectation and in addition I suggest time boxing the analysis, so you don’t fall into analysis paralysis.  The objective is to identify quickly when you have reached an optimum level of improvement in the process, or function being evaluated and then to turn your focus to another area for improvement.  In the mean time and while you have focused your efforts and direction on another process, or function, on which to focus the continuous improvement program, I suggest you should focus on the destruction and rebuilding of the optimized process, or function.

 

So now we’ve identified three new steps, or control points, to add to your continuous improvement program:

  • Identify when a process, or function, has been optimized to the point where the return does not justify the effort.
  • Identify a new process, or function, in which you can re-direct the continuous improvement efforts.
  • Destroy and re-invent the optimized process, or function, to re-invent the process and force innovation into the organization and process models.

 

The key challenge, or lynch pin, to implementing these methods and procedures into your continuous improvement program will be the identification of when the process has been optimized to the point where the return does not justify the effort!  As I was mulling this concept and challenge over in my mind I realized that the best method to identify this point may be found as a type of evaluation performed in the continuous improvement process itself.  So I suggest that the best method to identify when you have reached a point of optimum optimization you should perform an evaluation of the results of your most recent change, or even better, evaluate the potential of your next improvement, based on the real or potential return on investment.  This evaluation will help to determine if the ‘juice is worth the squeeze’.

 

At the point in time that you have reached optimum optimization, your next step in the continuous improvement process will be to rebuild by replacing, combining or even eliminating the optimized process.  I believe that the continuous improvement process can, and should, be extended to include an ‘innovation’ step in the continuous improvement program.  You cannot force creativity, but you can put the process and culture in place that will encourage and even institutionalize innovation into the organization.

 

Maybe the key point to institutionalizing creativity and innovation it to identify a step when you should destroy and rebuild/re-invent your process.  A challenge to this concept is the dependence on the people involved in the evaluation process, what I mean by this is that you need to encourage people to reject complacency and embrace change.  These are the hardest concepts to gain acceptance in any organization!

 

Now for the audience participation portion of this program……

 

Have you reached a point in your continuous improvement program where you feel your process, or function, has been optimized?

 

Have you contemplated how to encourage creativity and innovation in your organization?

tbrouill

3PL as the New VAN?

Posted by tbrouill May 6, 2012

I’ve been participating in discussions surrounding the changes in Supply Chain Management over the last 30 years.  I hope that you’ve had the opportunity and taken the time to participate in these discussions because they have brought up many interesting topics and thoughts regarding the changes and improvements over the last 30 years.  I find these discussions interesting from two perspectives; one is that I am getting old enough now to be able to say ‘I remember when’ regarding topics that have been around for some of the participants life times; the other is that I have noticed that many of these topics and improvements have taken earlier concepts into new directions and extended their usefulness.  To be frank, I’m finding these topics to be very invigorating and thought provoking for my own expanded discussion on this blog.

 

The most recent discussion was based on the question ‘How Has Technology Changed Supply Chain Management Today?’  I like this question because there are some foundational technology changes and improvements that I believe are starting a trend and direction that will have far reaching repercussions across the entire extended supply chain.  My response, however, triggered another thought and concept related to Supply Chain Management and especially to the market drivers and what I see as a new push towards outsourcing the supply chain.  This concept is that the Third Party Logistics providers, and I would especially include 4PLs in this group, are in the early to middle stages of developing a new type of Value Added Network to enhance the value to their clients and community networks. 

 

I think this can be categorized in the following major functions that will have the potential for providing a continuous value to their client community.  The major functions are;

  • Expertise and services – This is a function, or capability, that will grow in importance and value to the 3PL client community.  This is the result of what I believe is the coming consolidation of expertise that will result from the rampant downsizing within the 3PL client community that was the result of the economic recession.  I believe this will accelerate as the economy comes out of the recession and organizations begin to expand and grow.  I also believe this will cause a shift in the methods that management consultants are utilized and the tendency will move towards looking to 3PL partners to provide the expertise to identify the potential and work within the client community to deliver the solution.
  • Cost – The cost factor will continue to grow in importance and again I believe that the Third Party Logistics providers are in an excellent position to take advantage of the cost advantages that they can offer to their client community.  This will only accelerate as the 3PL client community grows into a critical mass of members across the extended supply chain.
  • Speed to Market – This function is the natural result of the growth of the first two factors and provides the third leg of the stool to a very compelling argument to outsource the extended supply chain functions to this type of value add Third Party Logistics provider.  This can be the game changing argument to transition to the 3PL client community also.  I would include in this topic in addition to speed to market the ability to quickly ramp up and down for special events.

The business mantra – ‘Identify what you do best and what differentiates your enterprise and then outsource the rest’ will be gaining momentum in the coming years.  We are coming into a convergence of technology capabilities, business need and new ways to combine solutions (mass customization) that will have dramatic impacts on the economy and the current business and socio-economic models.  You must be open to the opportunities in order to survive and grow in the future.

 

Now for the audience participation portion of this program……

 

Have you contemplated engaging with a Third Party Logistics partner?

 

Have you contemplated the activities that make your enterprise special?