I interviewed Richard Lloyd who discussed Change Issues in the Supply Chain.
Can you provide a brief background of yourself.
Sure. I'm a historian by background. My first degree was in ancient medieval history. And after doing that, I spent quite a bit of time looking around the world, trying to work out what would be a useful career. I studied languages and traveled around quite a lot of the Middle East and Spain and South American.
Eventually, I kind of realized this emerging. This was back in the early ‘90s. I realized this area of logistics and what was becoming supply chain was really a fascinating challenge. I went off and did a master's and found myself in the corporate consulting group of Unilever. I worked there for four years, mainly in Latin America.
Then I came across a company called i2 Technologies. I worked for them for 10 years doing projects around Europe with Continental Buyers, Spain, Darfur, and then up in Nokia for four years. And then, when they were bought by JDA, I left. And I spent five years looking at the area of supply [inaudible 00:01:21] and to ministries of health in Africa was in the area of Mozambique, Democratic Republic of the Congo, and Mali.
One of the observations I had there was that it was hard to change things when a Ministry of Health was running a supply chain, and I became interested in the idea of outsourcing from all of this. And at the same time, an old IT colleague of mine approached me and said, "Hey. I just joined DES, Supply Chains Under Excellence. And so, I joined that about two years ago, and now I'm a partner in supply chains [inaudible 00:01:56].
Looking at how we can do perhaps planning [inaudible 00:02:02] small organizations, and help people form their supply chains using the [inaudible 00:02:07]
Why is this subject worth looking at?
So, over my 20-old years of experience, I've seen a large number of... I would say around 50% have really failed to deliver the value that they set out to deliver. And at least 20-30% failed pretty much completely. And this is not something that, for instance, of being in the supply chain community, people talk about very widely. Certainly at conferences, we tend to hear the success stories. And I'm actually more interested in failure, because I think there's a lot of it about. You learn more from failure.
And so, I started looking into this about three or four years ago. I went the studied a master's at Oxford [inaudible 00:03:06] around change. And trying to understand what it is that makes supply chain projects to go wrong. You will see people stand up and they'll talk about their project, and they'll mention... They'll talk about change management, and they'll say very quickly, "It's change management with an issue." And then they say, "Anyway, moving on."
It's a typical thing to talk about [inaudible 00:03:27] validity [inaudible 00:03:28] often and involves emotion. And supply chain guys, being as we are, mainly a bunch of engineers, sometimes there's a lack of the language to talk about these kinds of stuff. So, it's my mission at the moment to try the introduce some psychodynamic concepts, a series of change into the supply chain discussion.
What are some of these key concepts, such as the organization and aspects of structure?
One idea that I like a lot is that there are different types of problems. So, you have critical problems where there is a pandemic, a disease, where you really need a top-down management style. But you also have something called [inaudible 00:04:21] problems. And these are the kind of problems that are never really solved. You just problems you try to ameliorate and deal with them. It could be something like, for example, the obesity trend that we're seeing at the moment.
To deal with that, top-down management doesn't really work. You can't go around and just sort of forbid people from eating. You need a much more complex series of actions to deal with that kind of problem. And these are called wicked problems. It's sort of a known concept. And there are these problems. They are the most [inaudible 00:04:59] rule. And every time you try and engage with them, you will find that you affect them, rather like the anthropologist will affect the people that he studies.
My hypothesis is that, of course, some supply chain problems absolutely are at their [inaudible 00:05:14] in a top-down manner, if you're looking, perhaps, at redesigning your network and making major sourcing decisions, there's something you can just say and it will make it so. But there are other kinds of problems where really, you need to engage the people who are actually running the supply chain and get their input into things like forecasting, operations planning, production planning in a plant. And I've seen too many programs take a top down approach.
Where have you seen some success with change in the supply chain?
I can give you an example where I worked at a company, which I can't name. It's a very large [inaudible 00:07:02] goods company. They wanted to implement [inaudible 00:07:04]. And what they found was that it's very hard to get failed [inaudible 00:07:11] on board with it. [inaudible 00:07:13] solution. And they were trying to roll it out for their downstream finished product. And in the end, it pretty much fell on its face. Lack of [inaudible 00:07:27] and the idea of complicated algorithms that their entry levels just couldn't really swallow in the organization.
Interestingly, they [inaudible 00:07:42]. We were happy working on that area. They then engaged us to do [inaudible 00:07:47] for some of their raw materials. [inaudible 00:07:53]. They had a very large inventory of a particular raw material, about 500 billion of it, raw.
And there we did [inaudible 00:08:06] and the relationship is very different. [inaudible 00:08:11] it was something that we were providing to them rather imposing of them. And it was a much more successful project. We actually managed to get it up [inaudible 00:08:23] and they now use this on a yearly basis. And I don't do it anymore, but the company that I was working for carried on, going in a doing a yearly fix for them, which is a different approach to being with the area of [inaudible 00:08:39] technology.
Do you have any final recommendations for implementing change in the supply chain?
I think the key is to have the discussions upfront. What I've seen on most programs is that when there have been large change issues, it's because there have been an unspoken issue, which could be something like people [inaudible 00:09:16] or there being a lot of politics around how capacity plant is measured, or who owns inventory. And if there are big [inaudible 00:09:31] issues about [inaudible 00:09:36] implementation of the tools [inaudible 00:09:38] process, if you don't address those issues upfront, they will always come back and bite you. You can't hide in supply chain.
If there is dysfunctional behavior driven by [inaudible 00:09:53] incongruity, this is always come out, because you can't fake it. It's either the product is there or it's not there. This is what drives a lot of strange behavior [inaudible 00:10:11] where for one reason or another, the burning issue, talk about often on projects, are the emperor's new clothes, where people are standing up to that.
A lot of this comes back to the people of the organization standing up and making a challenge of [inaudible 00:10:36]. I've seen organization that have done that and have taken [inaudible 00:10:46] years to really change the way people think about this [inaudible 00:10:50] but what you actually [inaudible 00:10:50]. But as long as supply chains is a kind of backroom activity, [inaudible 00:10:59] and it's perhaps overwritten by marketing or finance objectives, we're seeing that supply chain projects are setting out to combine the [inaudible 00:11:13] they are actually going against the current.
So, my main thing is for anybody involved in a program, you need to get in early on and have the difficult and awkward conversations upfront and be prepared to say, "We're not going to proceed because we feel there are unresolved issues here." Because there's no point in powering on with practicalities of the project when you haven't dealt with the underlying [inaudible 00:11:45].
About Richard Lloyd
Partner. Supply Chain Consulting. Tata Consultancy Services