- February 3, 2013
- Posted by: Javier González Montané
- Categories: Cost reduction, Supply Chain, Turnaround
There is a classification about the improvement phases in a firm according to the degree of development of internal and external processes.
The Improvements Phases in a Firm
This classification has been widely used (Gartner, PRTM, SCOR, APICS, and so on) but most of the time the improvements have been related to the IT status of the organization, and now we are trying to briefly analyze that classification from turnaround, supply chain, and change management perspective using meetings tool to optimize communication, planning, synchronization, and execution.
- Turnaround: The commonest cause of turnaround is poor management, so in this post we are focusing just in that particular cause. Multiple dysfunctions phase shows the poor management situation in which the company uses a very optimistic forecast; it has a huge overstock “just in case”; processes are not properly supported by IT systems and many activities are performed manually; staff is poorly trained and supported by managers/directors; purchases do not always follow the approval process; nobody (no sales neither finance department) is in charge of receivables accounts; etc. Therefore, we have mentioned many problems that turnaround teams can approach in the Weekly Improvement Functional Meetings.
- Supply Chain integration: When we are talking about integration, we are talking about creating high performance teams. For that integration we suggest to build an ecosystem of teams (for example one team for each business unit) with cross-functional members that have weekly meetings to share integrated goals, responsibilities, and philosophy (lean approach, make-to-order, and so on) in order to get a successful and modern supply chain (lean, responsive, profitable and high quality). Moreover, we should not forget that nowadays “no business is an island” so the extended enterprise concept is the external integration priority.
- Change Management: We are accelerating the improvements of the four phases almost simultaneously, creating four levels of meetings that work in parallel to identify improvement initiatives. Meetings are helping to share objectives and information, synchronize activities, and generate common action plan. It is important to highlight a couple of things regarding meetings. First, we are talking about productive meetings. I mean those meetings must be as short as possible (aprox. 30 minutes), with a well-defined agenda, and results must be monitored. Second, in order to produce turnaround results quickly, the periodicity of meetings must be weekly in most cases. Otherwise, we are losing several months just to align the teams or to execute the initiatives. Those meetings used to have the following results: staff ideas are listen by the company; communication and synchronization issues are managed; people proud of his job raise; people commitment with the organization rise too; and so on.