I interviewed Art Koch who discussed supply chain core competencies.
Dustin: Well, hello, Art. Thank you for spending your time today to discuss the focus on core competencies. Can you start by providing a brief background of yourself?
Art: My name’s Art Koch. I do operations and supply chain consulting. I started off in this field twenty-plus years ago, working as a materials manager and working through different organizations, everything from automotive to consumer goods, to a wholesale book distributor. My background I feel I do best is getting organizations to wade through the minutia or all the nonsense and focus on what I call the basics of what it takes to get the job done.
Dustin: Great. And can you start by, can you define what are core competencies?
Art: Core competencies, when I look at a supply chain, my core competencies are the basics. How do you do inventory management? How do you do basic purchase orders? How do you do shipping, receiving? And making sure that the things that we take as granted are done accurately. What I see that happens all the time, especially here in the States, an excellent job of getting organizations to understand that supply chain is now a profession. There are some excellent schools that offer four-year Master’s and Ph.D.’s on the subject.
What you do is, you get a bunch of individuals out in the workforce that are looking to make a name for themselves, and they’re looking for the next big thing, they’re looking for a grand-slam home run where they can make a name for themselves in the organization. What happens too often, they forget to focus on the basics, and when you don’t focus on the basics, an ERP doesn’t work, your forecast inventory planning solution doesn’t work, and you get tied up into chasing the wrong problems.
Dustin: Is there anything more you can say about why core competencies are important?
Art: Let me dig through this. The biggest reason why I feel they’re important is as that our supply chains stretch and what we’ve seen happen over the past number of years with our growth into China from the United States and now Vietnam, India, Indonesia, --- our supply chains are stretched. What happens is lead times are stretched, and at the same time, our dependency on data is at an all-time high. If that data is not maintained and scrubbed properly, what occurs is your information that you have to use to manage your business, it’s not as accurate as it needs to be, and what happens is, you’re making decisions on inaccurate data. That’s why it’s so important. One of the things I preach and I drive into organizations I work with is, we track manufacturing processes.
Some organizations, they’re really serious about Six Sigma, using Toyota’s tools in the manufacturing process, but they don’t use those same tools in managing their supply chain. You can walk into a place that has Xbar and R charts on machines in a factory, and they’re tracking something to where their parts per million is underneath twenty-five. Where you’ll look at the same organization, and they’ll have five percent negative inventory. How can you manage that business? That’s why I focus on it.
Dustin: And who needs to focus on core competencies?
Art: What it comes down to is, it has to come from—I wouldn’t say in the C-levels, but when you talk about VPs in the organization all the way down to the supervisors, we have to get them focusing on this. Newly minted directors and newly minted managers, I think, too often veer off and do not focus on the basics, ’cause they’re tied up in strategic meetings, they’re tied up worried about their careers, and we have to get them to back up and focus on the basics and whether the core competencies that make your organization successful.
About Art Koch
Arthur Koch Management Consulting, LLC
Independent Consultant | LEAN | Supply Chain | ERP | Project Manager | Forecasting | Inventory Management | Change Agent