Skip navigation
2013

Chutzpah: A personal confidence or courage that allows someone to do or say things that may seem shocking to others

Merriam Webster

 

If you are fluent in Yiddish, you know chutzpah, meaning nerve, is akin to the Spanish word "cojones" meaning courage, but without an anatomical context as in tener cojones.

 

So, as I sit in this uncomfortable seat, fighting sleep, winging my way to Chicago, I am asking myself a simple set of questions. My circular logic goes like this.  The supply chain world is dominated by men. Men have cojones. So, why is it that in this male-dominated world of supply chain there is very little chutzpah?

 

In short, I think that it is because we want to please. Commercial teams are paid to sell. Marketing teams have an agenda to increase market share. The supply chain team takes and ships orders. Everyone claims that they care about the customer, but the system is ineffective.

 

Figure 1.

 

The supply chain team with chutzpah has courage. They build the end-to-end value chain outside-in and align commercial and operational strategies. They focus on improving value to the customer. Those without any chutzpah define the "supply chain" as an organizational function that focuses only on distribution, manufacturing and procurement. The later definition fits most organizations that I see.

 

So, how do you increase your chutzpah? Here is my five step plan:

1) Help Commercial and Business Leaders to See the Supply Chain as a Complex System. Many supply chain teams have aggressively cut costs to fund an organization's growth. Sometimes, in this process, they have cut muscle, not just fat, limiting the potential of the supply chain to balance costs, inventory cycles and complexity. I work with an organization that is using Llamasoft's mobile Sherpa application in the S&OP meetings. When the commercial team makes one of those eye-rolling, off-the-wall requests, the team quickly shows the group the impact of this hairy, audacious go-to-market plan on the base business.  They then say, "We can do that, but here is the impact." And, of course, the commercial team quickly sees the relative importance of their request. The visualization of the impact to the commercial teams on base business helps to drive alignment. Without the visualization, the commercial teams see the supply chain team as a bunch of whiners. This approach lets the commercial teams actively participate in the decision.

 

While 37% of companies have a Supply Chain Center of Excellence, most define it too narrowly.  Only half of the Centers of Excellence meet the expectations. The Center of Excellence is successful when it SERVES the business. It fails when it becomes ACADEMIC. The most success happens when the supply chain Center of Excellence is built with a goal in mind of building cross-functional alignment. Use the work in the Center of Excellence to help drive the cross-functional understanding of the supply chain as a complex system, and facilitate a cross-functional understanding of trade-offs. When the Center of Excellence is defined to drive alignment there is 3x greater alignment between the finance and marketing teams.

 

2) Say Yes and Mean it!  The supply chain team is pressured to say "Yes" to commercial plans. However, trouble brews in Dodge City when the promise cannot be delivered due to reliability issues.  When given the choice between fast and reliable, chose reliable. Actively design the supply chain to say "Yes" and mean it.

 

3) Challenge the Status Quo. Last week, I was with a client that is working with SAP to run their supply chain planning system, SAP APO, on SAP's HANA platform. I asked them "Why?" They looked surprised. I believe that there are many wonderful uses for HANA like visibility across multiple ERP instances, but I question on why to continue to invest Advanced Planning System (APS) logic, like APO? The basic footprint of APS was defined when planning was constrained by 32-bit architectures. Computing power has increased 100X since the 1990s, but the definition of APS remains unchanged. I think that our new opportunity lies in redefining planning not just making old approaches faster. The supply chain team with chutzpah asks hard questions.

 

4) Build Supply Chain Potential. I recently interviewed Daniel Weber, leader of the Beiersdorf supply chain team for the Supply Chain Insights Podcast Series Straight Talk with Supply Chain Insights.  Listen carefully to Daniel's story as he shares how he used the need to improve customer service as the means to convince the company to REDUCE inventory. This starts with the belief that you can improve the potential of this complex system called supply chain to both improve customer service while reducing inventory.

 

Similarly, I love the results of Hershey and the work of Jason Reiman's team.  Check out Hershey's impressive results in figure 2, and give Jason a "Congratulations!" on his new promotion to Vice President.

 

Jason and Daniel have both increased the potential in their supply chain to manage trade-offs. Many, unfortunately, just do not believe that this can be done.

 

Figure 2.

 

5) Build Muscle at the Core and Innovation at the Edge.  The supply chain leader with chutzpah has the courage to invest in new technologies for the supply chain. They actively lead efforts to test and learn through new forms of analytics. They understand that there are no "best practices" that come out of a software box; instead, they realize that they have to learn from others to tailor processes to fit their needs based on a clear supply chain strategy.

 

So, what do you think? Do you think it is appropriate for me to ask for my family to lay me to rest on a small grassy knoll at my farm underneath a small marker that says, "Here lies Lora Cecere. A small-town girl with lots of chutzpah?"

 

You needn't send me your replies on this one.

lcecere

What Do We Do Now?

Posted by lcecere Sep 23, 2013

Supply chain talent is a growing gap for leaders. The impact is great. The biggest issues are in mid-management roles. Let's examine some of the facts from recent research. Today, 60% of companies have open positions. Fifteen percent of the planning positions are open for an average time of five months. An IBM surveys report that 51% of companies are seeing an increase in turnover of supply chain leaders. Have I convinced you yet to be worried?

 

If so, let's start working on an answer. Let me give you the first clue. The answer is not recruiting more college recruits.  There is currently a 9:1 demand to supply ratio for supply chain graduates, and the skill level of new hires cannot stretch to fill the missing mid-management gaps.

 

 

It starts with leadership. This week, I have been reviewing supply chain strategy documents for companies planning their 2014 strategies. I love talking to supply chain teams about their future. However, I am surprised that most companies do not see the gap in supply chain talent as a critical need to fill.  The plans that they are sharing are not including the need to move aggressively on building supply chain talent. There is just no understanding that the WORLD TODAY is not the WORLD of FIVE YEARS AGO. Five years ago talent was plentiful, companies could easily recruit for supply chain planners, and it was easier to recruit supply chain graduates. Not so today....

 

If only more companies had the view of Mike Corbo, current leader of the Colgate supply chain team. In my recent interview with Mike, he said he spent 30% of his time on team development. Notice how talent management is at the top of his mind:

 

"As an organization, we believe in building talent systems and hiring from within. I take my job as the leader of the 22,000 global members of the Colgate supply chain team seriously.  I oversee succession planning for the supply chain organization.  When it comes to talent management, it is a “single threaded needle.” While I am supported by an experienced and talented supply chain human resource team, managing talent is a large part of what I do.  It takes time. It is 30% of what I do on a day-to-day basis. As a result, the reward and feedback systems for talent development are very consistent. The leader of the supply chain team has led succession planning for the last twenty-five years.

When people come to see me and ask for career advice, I tell them to do their current job VERY well. My advice is to “get real good at something and drive value today.”  I believe that success is not always about moving up.  I encourage members of the team to take enrichment opportunities in other areas of the company or other geographies; but I don’t want them to just spend time, I want them to contribute and learn.  I believe that we should encourage people to move across the organization to get a greater understanding of the business. We do succession planning three times a year. I value cross-functional experiences.

I strongly believe that we cannot let regions operate as islands. We hire with the expectation that people will spend time in multiple regions and multiple functions."

What do we do about it?

 

So, when companies agree that this is a problem, the next question is,  "What do we do about it?" Here are five steps that I think that supply chain leaders can take today:

  1. Recruit Heavily from Engineering Programs and Train New Hires on Supply Chain Concepts. Today many companies are competing for the same talent from supply chain programs in business schools. An untapped and more available talent pool is in the engineering schools. They can be trained to fill in the process mastery gaps. While they will need to be trained on the practical supply chain processes, they understand the concepts of process systems and they have the raw talent to build both technical and process mastery. In fact in some ways this may be helpful, because many supply chain programs are teaching old supply chain concepts, and very functional views, of the past.
  2. Focus on Making Your Teams Loyal Employees. Loyal and valued employees stay with organizations. Planning roles are at the bull's eye of this "perfect storm." Supply chain planning roles have the largest number of vacancies with the longest time to source. So, a perfect place to start is to make sure that your planning teams feel appreciated. Most planning teams have a low-level of satisfaction due to the fact that traditional processes reward the urgent, not the important. The research that we are doing strongly supports that companies that are good at planning are better able to balance costs, inventory and customer service.
  3. Cross Train. Enrich and improve cross-functional understandings through short-term assignments. Use the principles of co-op positions to for permanent employees to give them both job enrichment and cross-functional experiences. The largest gaps are in the areas of strategy and finance.
  4. Invest in Learning. In our recent studies, 1/3 of employees are asked to own their own training programs. And, we all know that training is usually the first thing that is cut in a downturn or a budgetary cycle.  And, as my friend Marcia Conner points out so eloquently in our webinars, training is not the same as learning. Training is only one way to learn. Build stronger teams by embracing learning as a cultural value. One opportunity to do this is through the onboarding of new employees from other companies. One mistake I see companies make over and over again is believing that they have a clear understanding of best practices. Next week, I will teach a class where former P&G, Unilever and Dell employees have joined the same organization. They each believe that they understand "best practices", but they are unaware of how different their understandings of processes like forecasting, network design, inventory management and sales and operations planning are. Each employee comes with a different paradigm. Use these understandings to forge better processes. Challenge why companies operate in certain ways and be sure to clear understanding of how these processes evolved based on constraints, cycles and market shifts. Help new employees build a bridge from prior experiences to the new environment early and encourage team discussions so that the entire team can to learn through the process.
  5. Don't take middle management for granted. Most organizations have programs for entry-level employees and "high-performers." Most training plans take mid-management employees for granted. Don't make this mistake. Build your own learning programs to help mid-management employees build process and technical mastery. While there are historic programs through APICS, CSCMP and other associations, leaders like Colgate, DuPont and Johnson & Johnson are upping the ante to build the next generation of thinking. They feel that these industry training programs have not kept pace with the needs of the industry. Partner with these industry leaders to take advantage of new ideas

 

These are my thoughts, but I would love to hear from you. Please let me know what steps you are taking. For more on the supply chain talent gap check out these resources.

 

Webcasts:

Supply Chain Talent, the Missing Link

Supply Chain Talent, the Missing Link 2012

 

Reports:

Talent Supply Chain's Missing Link

Supply Chain Talent the Missing Link?

 

Presentation from the Supply Chain Global Summit:

Powerpoint Slides

Video

 

Blog Posts:

Supply Chain Talent: The Missing Link in Your Future?

Colgate: A Closer Look at Supply Chain Excellence

Supply Chain Talent: The Missing Link?

Buckle Up! It will be a Long Ride

On Wednesday, Supply Chain Insights will host our first conference. It is designed as an annual event for supply chain leaders. We are proud of the line-up of speakers.

 

The event will open with the sharing of research of how supply chain leaders have made trade-offs on Conquering the Supply Chain Effective Frontier. (We have been analyzing balance sheets and studying the financial performance of companies for the last sixteen months. We wanted to understand how companies have made the trade-offs of growth, profitability, cycles and complexity.) In the morning session, leaders from P&G, Intel and Merck will be sharing their insights behind their numbers.  We look forward to hearing their perspectives.

 

We find that nine out of ten companies are stuck.. Complexity has risen and progress on margin and inventory is stalled. While 1/3 of companies have been able to drive progress for two consecutive years over the last decade, no company has been able to sustain this for more than four years. In table 1, we share these results. Attending the conference, and making improvement in both inventory cycles and operating margin for two consecutive years, are Colgate, Dow Chemical, and General Mills.

 

Table 1.

figure_1-consecutive_improvement

 

As shown in figure 1, ironically, the greatest improvement, and the toughest work, was at the end of the last two recessions. We believe that it is a case of when the going gets tough that the tough get going.

 

Figure 1.

figure_2-recessions

 

Today, many companies are stuck. We believe that to improve supply chain potential, companies need to adopt new technologies and processes and build supply chains outside-in. When we asked the attendees to imagine their supply chains of the future, and to rank the supply chain trends that they were the most excited about in the race for Supply Chain 2020, their answers are shown in figure 2. It will be interesting to see how their perspectives change, with the sharing of insights from global leaders, over the course of the conference. We will be sharing these insights on our upcoming webinar that will happen post-conference. Register for the webiner at our Upcoming Events page.

 

Figure 2.

figure_3-Top_3_Supply_Chain_Trends

 

If you are not able to make the conference, tune in to see their response live. You can follow the conference on our USTREAM channel at http://www.ustream.tv/scisummit13 and follow the action on Twitter via the hashtag #SCIsummit.  Once the Summit has ended we'll be archiving the presentations and the video for six months.

 

Also, just because you will not be there in person does not mean that you will miss out on the action.  If you have a question for our speakers just send it to us on twitter using the #scisummit hashtag and we will ask it to the speakers during the Q&A sessions. So, join in the conversation and share the presentation with your team. We are convinced that it will be unlike any other supply chain conference.

lcecere

Imagine

Posted by lcecere Sep 3, 2013

Right now, at Supply Chain Insights, we are in production mode. The team is busy working on the execution of the Supply Chain Insights Global Summit. Next week, we will be hosting our first event at the Phoenician in Scottsdale, AZ. Anyone that has put on a conference, understands the pressure.

 

As I prepare speakers, facilitate pre-meetings with the panels and answer questions, I am getting excited. I strongly believe that we need to rewire our mental models to win in the Race for Supply Chain 2020. I am more and more convinced that supply chain leaders need to challenge the status quo. At the conference, the discussion will not be about the supply chain world that we know; instead, it will be about the  supply chain that could be. The discussions will focus on themes like:

  • A Shift from Efficient Sickness to Health & Wellness. Today, I interviewed the healthcare panel for the conference. It includes a specialist on 3-D cell tissue regeneration/3-D printing, a thought leader on healthcare integration and the head of the American Nurses association. We had a fascinating discussion about the future of healthcare. It is rapidly evolving to use the Internet of Things to sense health and wellness at the patient's home, to manufacture organs and tissue and custom drugs locally on an as-needed basis, and to better connect case records and usage data through inter-enterprise systems of record. The change is not an evolution. It is a revolution. It is time to challenge the long, inflexible supply chain that carries three times the level of inventory and is unable to be responsive in a time of need. In the words of Annette Pummel, chair of AHRMM BOD, "We need to aggressively design to drive patient-based outcomes." Affordable healthcare does not give us time to wait. It cannot be a gradual change. I think that new answers lie in rewiring our mental models.
  • Flexible Manufacturing. Yesterday it was the panel on digital manufacturing, where we discussed the use of 3-D printing and the Internet of Things to improve manufacturing productivity and flexibility and transform manufacturing. Nine out of ten supply chain leaders are stuck. They are unable to power growth, profitability and reduce cycles due to the increase in complexity. Does the redesign of manufacturing to use these new technologies offer promise? I think so.
  • Systems that Sense and Learn. On Monday it was a discussion on Big Data transformation.  The discussion was on the adoption of advanced analytics and new forms of data. Advanced analytics enable process innovation of outside-in processes to use and translate customer data in new ways. I am very excited about learning systems and new forms of visualization and analytics. Will supply chains in the next five years sense and learn while we sleep? I believe so.
  • Supply Chains that Are Saving the Planet. Corporate social responsibility programs are now six years old. For many companies that is lip service, but for many they are quickly fusing CSR into the brand promise, becoming the essence of the company. I love what Unilever and Starbucks are doing on the redesign of the supply chain to do no harm. As an environmentalist, I believe that supply chain leaders can make a difference. I am excited about the case studies and the evolution of corporate social responsibility processes. Can they make a difference? I say, ABSOLUTELY!

 

If you cannot make it, please watch the live broadcast. We will archive it for a period of six months to enable you and your teams to think about the work that lies in front of us. It is exciting. One thing is for sure, this will not be a YADDA, YADDA conference.