On the LinkedIn group SCMWorld, I recently started a discussion about the 21st Century Supply Chain blog post "Why Supply Chain Projects Fail." An insightful conversation ensued, and I wanted to share it with the members of the Supply Chain Expert Community. The comments from the LinkedIn group are listed below; please add your own thoughts on the topic in the comments section here.
Nosh Lentin: In my experience Lauren the answer is pretty simple - not enough attention to master data and DETAIL. Too much decision making in Board rooms based on Powerpoint by high level generalists.
minseog cha: I would say that most clients that I have met focus on more sales figure rather than optimal operation. Senior managers or above would not made a quick or right decision to fix problems if the decisions make a bad effect on sales figure.
Richard Wilding (Professor): We undertook some significant research in this area which is currently being updated. We found very few supply chain projects really work as planned.
Feel free to download our report, it’s free of charge and highlights the key barriers and success factors. The survey was of over 180 senior supply chain executives. http://www.som.cranfield.ac.uk/som/boardroomsurvey
Ian McIntosh: I have found through experience that 4 in every 5 manufacturing businesses has opportunities for supply chain improvements but often don’t know where to look for benefits. Its right to say time is a big factor for employees to fully focus on these projects as through bottom line pressure businesses have removed the experienced heads and loaded extra responsibility on those who remain. Everyone is consequently busy and unable to make changes or decisions - nor do they have time to reply to emails from people that offer help!!
Paul Nixon CMILT: Thanks Richard, I'll read the report and am interested in its findings. Off the top of my head reasons for supply chain projects failing would include:
- lack of time allowed to effect the change successfully - often driven by general / senior mgt lack of understanding.
- related, a desire to cut short a project when some basics are in place, failing to maximise the value of the change.
- as Nosh suggests, a lack of good quality data that makes measurement of where you are / where you want to get to / how you're going to do it more guesswork than science.
- failure to get the right level of buy in at all levels of a business affected by changing the supply chain.
I'll maybe come back to this thinking after I've read the report!
Ian McIntosh: There is another reason for projects failing that I feel is very relevant at the present time in the UK. The fact is the project never starts because people are protecting their jobs. As an independent I find people will not engage outsiders for fear of being 'found out' whereas they could embrace it and look good for doing something. One particular Government business I audited had a large cost saving opportunity presented to them. To this day they haven't replied to a single email, never taken a phone call and didn’t respond to my letters. Was I disappointed, yes but what was more worrying is that the changes were probably not made either as by their own admission they had not changed anything for 12 years. Local departments are cutting back and people are losing their jobs and the Management carry on regardless. I compare it to WWI mentality - send the troops over the top and keep your own head down until the firing stops.
William Furley: The reason they fail is because they are driven by the wrong people, accountants want all detail immediately and manufacturing is always “king” and tends to drive the system. Any systems that is driven by accounts or manufacturing is on a slippery slope, as the supply chain is ever changing, due tight customer demands and inherent complex reasons encounter with the movement of goods. The ability to change fast and quickly to meet customer demands is critical for the business any if the supply chain is not able to meet the demands it is doomed to fail. Once a system has been written it is difficult to change and the ability to change is paramount if it is going to succeed. Also if it is large corporations with multiple overseas offices, one system will never fix all as Country requirements differ immensely.
Paul Nixon CMILT: Good point Ian. People are reluctant to put their head above the parapet as it were, and from my experience that can also apply to the private sector.
I think there is also a cultural thing at work here, with an attempt to seek improvement / a different way of doing things being seen as a weakness (by casting doubt on own performance) rather than a strength. That can manifest itself in a reluctance to take on projects, and then to co-operate with them to the fullest extent (with project failure a likely result).
The best organisations with which I've worked - and there are plenty of them - I'd characterise as being confident in what they do, but open to being able to do things even (a little) better.
Ian McIntosh: I agree Paul I wasn’t singling out Government it does apply to all business activities. I'm afraid businesses continue to suffer with margin erosion from many directions, some they cannot control nor pass on. Simple tasks can be applied in many areas without compromise to the company's image or performance to their customers but it’s seen as a risk.
I say this - if you always do what you've always done you will always get what you always got. Change has to happen to ensure businesses maintain their competitive edge and the sooner people wake up to that fact we will begin putting the Great back into Britain. I will now retire from my soap box!
Paul Nixon CMILT: Don't Ian, it seems nice on there!
George Gibbons: What I find is a combination of people fearful of their jobs and Senior Executives meddling. Not enough respect is shown to the Logistician who is working on many aspects of the business to prepare them all for change, and that the change shall be better, it shall enable visibility of all strengths and weaknesses and believe me make the day to day business easier. This last point is one people find very hard to accept, but it is the truth.