A long title but an important one. Companies to don’t have unlimited resources. As such, we need to make sure that what we’re doing is in support of where the company wants to go. Or us in Operations, we have to hope that Sales is bringing in the type of business our company wants. If it does, then the things we’re doing to take care of the customer also take care of the company. If it doesn’t, we’re going to struggle with our manufacturing because we’ve tuned our resources to support the company’s goals.
There are typically five areas we can manage our choices in supporting the company strategy. They are:
Capacity
Facilities
Technologies
Organization
Supply Networks
These choices have to be made in a context that supports what the customer wants. What the customer wants can usually be categorized into the following:
Price
Quality
Speed
Dependability
Flexibility
The choices available to us in Capacity are lead, lag, or something in between. A lead capacity strategy means we always have extra capacity available and lag means we match demand. The issue here is if we choose a lag strategy, don’t always expect people to jump immediately to respond if they’re busy. By nature of the system, their workload is booked already.
The issue in facilities is to develop a plan that allows you to grow logically. Each business will develop its plans differently but stay away from putting a new piece of equipment where there’s open space. This leads to haphazard movement and as you grow more complexity in movement. The goal is to be thinking in terms of minimizing movement, and an orderly flow.
For technologies, we’re wrestling with the levels of automation and deciding what’s the appropriate level of technology for us to have. A lot of this gets dictated by part volume and design requirements. For you and I in operations, what we don’t want is a couple of things. We don’t ever want to automate a process that makes poor parts. All we’ll do is make poor parts automatically. The other thing is the match between people’s skills and equipment needs. New equipment may mean new skills are needed. In a well run business, people will be excited to learn the skills needed. If you run a poor business, people will be dragged kicking and screaming into learning.
Organizationally we are wrestling with structuring jobs, responsibilities, and reporting correctly so work gets done efficiently. There are two categories of structures available to us to pick from; Silos or teams. Organizing in silos means we organize around job functions or by departments. Organizing around teams means there is a member of each function on a team that is geared around supplying and supporting the customer. Neither one is good or bad. We do though face a choice as we grow our business. We should move towards teams as we grow. This retains a focus around the customer and away from looking inwards only. Another dynamic we face organizationally is how we manage and lead. I worked for a company that called it PDC vs. TET. We can plan, direct, and control or we can teach, equip, and trust people. While our goal should be TET, we move on a continuum. When an employee is new to a job or company, we’ll employ more PDC keeping in mind we want to help them move to a position of TET. I like TET as a long term approach because we can ultimately have many informed leaders in the company.
Supply networks is part of supply chain management. Our goal here is to develop suppliers who help us build a successful business as well as help them succeed too. There is a whole new course here but the important thing in managing suppliers is the golden rule. Do what’s right, do your best, treat others the way you want to be treated. Another important facet in managing suppliers is something I learned many years ago as I headed down the JIT path. Don’t ask them to do anything you aren’t willing to do yourself. You can’t ask them to become lean if you live extravagantly. This is hypocrisy at its finest!!
BLOG AUTHOR:
CHUCK NEMER
CSCP, CPIM, CLTD, CHSCA, CSSC, CPIA
FOUNDER, THE GURU OF BIZ
EMAIL : chuck@theguruofbiz.com
WE HELP SUPPLY CHAIN PROFESSIONALS MAKE MONEY, SAVE MONEY, AND FIX PROBLEMS WITHOUT PAYING BIG FEES
Chuck Nemer is a trainer/consultant with 40 years of experience in Supply Chain Management, Lean, Leadership, and APICS. He currently works with approximately 50 universities and 3000 students annually in supporting the use and play of the simulations in the classroom. Within those 40 years, he has taught, and continues to teach, professional certification classes for APICS, professional development seminars and programs on his own, and on behalf of colleges in their outreach programs to local and regional manufacturing firms.
FRONTIERS OF SUPPLY CHAIN MANAGEMENT.
This LinkedIn group is all about a place to learn and discuss what's going on at the frontiers of supply chain management. We are posting supply chain articles, news, host interviews, and host live streaming conversations so you can stay on top of what's going on in supply chain.