Nurturing the Supply Chain Farm Team

Join the supply chain conversation at Think Supply ChainLast week I had the opportunity to spend time with executives of small and mid-sized manufacturing companies in the greater Louisville, Kentucky area. I was invited to speak at the Metro Manufacturing Alliance (MMA) annual summit at Ivy Tech Community College in Sellersburg, Indiana. My speech focused on workforce development and how important it is for small and mid-sized manufacturers to invest in developing a “farm team” of talented workers who can contribute to the long-term success of companies.

After the conference, I stayed for a smaller luncheon gathering of CEOs. Here’s where my fellow presenters and I were able to really get down to the heart of the matter. I learned:

  1.  CEOs of small and mid-sized manufacturers are first and foremost members of their communities. They know their workers, their families, and their school systems.
  2. They are concerned that the education system, especially at the high school level, focus primarily on steering students toward college instead of the trades, even though skilled trade workers can make as much or more money than the average college-educated worker over their lifetimes.
  3. These CEOs are committed to their workers and are willing to make investments to ensure their success at their companies, but they also struggle with worker retention and want to know that investments they make are going to pay a return.
  4. They are working creatively to develop programs, such as apprenticeships, that train or retrain workers to have fulfilling careers with their companies.
  5. They are not only concerned about the skilled labor shortage, but also succession planning and developing management talent that can ensure the sustainability of their companies.

As we spoke, I was impressed by the sincerity and earnestness of all the people sitting around the table. I believe, with the help of organizations like the MMA and One Southern Indiana, they will be able to make something happen that will benefit their communities and their companies. Then I had to wonder, what is the role that the APICS Foundation should be playing? After all, education, like politics, is local.

Investing in Supply Chain Education and Training Programs

I come from a family of educators and am part of a generation of Americans raised to believe that college is the terminus of formal education. So I get a little uncomfortable when participating in discussions that suggest that all young people should not aspire to go to college. But my husband—the guidance counselor—tells me I am missing the point. True success, he says, depends on discerning the right path for the student based on their abilities and sensibilities. This is no easy task when government and parents are inclined to measure success by the number of college applications accepted. Add to that the enormous caseloads for guidance counselors and their inability to really know their students, and it is no wonder we tend to seek cookie cutter approaches to steering students in the directions of their futures.

Organizations such as APICS and the APICS Foundation can support local efforts by helping to build national and international awareness among teachers, guidance and career counselors, parents, and students about the many opportunities that exist in the world of manufacturing. Some of these opportunities can be found in trade and others in management. Regardless, they both require education and training beyond high school. They both can lead to fulfilling, life-long careers in manufacturing.

How can we start to change society’s views of success? What can APICS do to nurture the “farm team?”

PwC Supply Chain Sustainability Research

Join the Supply Chain Conversation at the Think Supply Chain blog - Jonathan Thatcher APICS Research DirectorHow do organizations actually increase their supply chain sustainability maturity? How much progress do companies see? What barriers are in the way?

Plenty of research exists—from academia, consultancies, and research groups—that addresses these questions. Typically such research will include surveys of senior managers that captures their sustainability plans and goals. But less common is research that analyzes the supply chain and operations management practitioner. And even more rare is research that looks at both the practitioner and senior managers—research that identifies gaps in management thinking that leads to different perceptions, priorities, and barriers to advancing supply chain sustainability.

This year, APICS and PwC, a leading consulting firm, have combined forces to study these less-common, yet vitally important issues. It is an excellent match—APICS has an impressive network of practitioners and research, and PwC has done extensive research from the senior management perspective. Together, we focused on paying close attention, in survey and analysis terms, to both senior managers and supply chain and operations management professionals. By comparing and analyzing their responses, a clearer picture emerged of the root causes that slow sustainability efforts in supply chain strategy.

Initially, the opportunity to produce such unique research came in 2011, when APICS began studying the difficulties practitioners face in advancing sustainability maturity. In 2012, follow-up research suggested that one major challenge was the enterprise’s differing perspectives on supply chain sustainability strategies, expectations, and planning and execution.

Discovering supply chain sustainability trends

The combined APICS-PwC research  revealed gaps on a number of fronts. For example, many executives and senior managers mentioned the importance of long-established sustainability trends and policies at their organizations. However, 53 percent said they believed their employer’s sustainability history was unknown to them, or its history was less than five years old. Clearly, different perspectives about the history of sustainability were in play.

The combined research also revealed that the practitioner and senior manager perceive different barriers. The existence of supply chain sustainability strategy is one example. Only 5 percent of executives and directors reported that they had no supply chain sustainability strategy, while 21 percent of practitioner managers reported having no supply chain sustainability strategy. Further, practitioners said that leadership does not provide mandates, incentives, and resources to turn sustainable strategies into action. Other respondents added that significant confusion existed about the scope and goals of supply chain sustainability. In sharp contrast, 55 percent of executives stated that supply chain strategy exists and is fully communicated across the organization, or that supply chain strategy exists but has not yet reached all levels of the organization.

Another key difference for the two groups was in realizing value from supply chain sustainability. The survey included questions that asked for respondents’ perception of company performance. Two thirds of companies that reported they did not realize value from supply chain sustainability also stated that they had no practical measurement or tracking in place for supply chain sustainability initiatives. In contrast, only 22 percent of companies who did report realizing value also reported they had no practical measurement or tracking in place.

Ideally, both senior managers and supply chain and operations professionals should work toward increasing sustainability with the use of objective, practical, and insightful tracking and measurement resources. These two groups can more closely align their perspectives. Following are several ideas to consider:

  • A communication or feedback path should exist between management levels to ensure organization-wide practice is on target, particularly where practitioner responsibilities are key. The practitioner must be able to work through prioritization, conflicts, and master planning and scheduling. Keep the practitioner updated on detailed strategy. How the practitioner executes supply chain sustainability strategy influences sustainability practice elsewhere in the organization.
  • There must be effective and practical education and training to ensure best practices exist throughout the organization. Shared use and reporting from tools, systems, terms, metrics should be the result—where education is backed up with incentives, real-world use of resources, and best practices.
  • Help ensure executives and directors provide support for staff ideas. Executives and directors say they are enthusiastic about staff ideas toward sustainability and believe there are more metrics and goals in place, but managers and their teams see it differently. Fewer managers report getting support from senior management for implementing staff ideas.

Considering these ideas may help broaden engagement by breaking down silos between senior managers and supply chain and operations management professionals. Remember, effective sustainability efforts do more than help workers feel good, they have the potential to improve brand image, encourage innovation, promote cost cutting, and comply with government regulations.

Can Supply Chain Innovations Create Customer Happiness?

Join the supply chain conversation at Think Supply ChainJeremy Gutsche will be one of the general session speakers at APICS 2013. In anticipation of meeting him in Orlando, I have been spending some time “getting to know him” through his hugely popular website Trendhunter.com. As the site states: “With 40 million monthly views, TrendHunter.com is the world’s largest, most popular trend community.” At its core, Trendhunter.com is a crowdsourcing community of more than 117,000 individuals who spot and share trends. Trendhunter.com staff post microtrends every day to help site members and readers “generate ideas, stimulate creativity, and ultimately unlock cool.”

To me, Trendhunter.com embodies this year’s conference theme, “Leveraging the Power of the Customer.” Gutsche’s success is directly related to his opinion that companies seeking to innovate make a mistake when they “microcompare” themselves to their competition, resulting in a market full of similar products. “Cool” is not a synonym for popular. Cool represents a “pocket of opportunity” that companies can potentially seize to lead—not follow—in the marketplace. Companies, including Nestlé, Kellogg’s, P&G, Samsung, and Intel, contract with Trendhunter to provide special dashboard reports that help them seize their opportunities.

Supply Chain and Opportunities for Innovation

Searching “supply chain” on Trendhunter.com, I found an interesting story about Coke2Home. Coke2Home is the brainchild of Hindustan Coca-Cola Beverages. The company believes strengthening its supply chain will support its development as a world-class company; and, therefore, it puts an emphasis on supply chain innovation.

Coke2Home does what the name suggests. It delivers Coca-Cola products to the doors of customers in Ahmedabad, India. Consumers placing an order online before noon will receive delivery the same day. In a recent interview with the Times of India, T. Krishnakumar, CEO of Hindustan Coca-Cola Beverages, explained, “our entire suite of products become available to the consumer to choose from, and a significant drop size provides us with a viable model for door-to-door delivery.”

The milk truck has been around for decades, so why does this Coca-Cola service count as cool? The answer is simple: Home delivery in India ultimately is responsive to the end consumer. With retail shelf space at a premium and personal transportation difficult, home delivery of groceries ordered online is bound to be popular with India’s rising middle class, saving them time and money. Of course, from a supply chain perspective, there will be challenges to overcome. But if Hindustan Coca-Cola Beverages can develop a model that balances consumer value and company profit, this supply chain solution likely will create a competitive advantage for Coke in the Indian marketplace.

So can supply chains deliver happiness to the customer? What other trends illustrate how companies are leveraging the power of their customers to innovate and create competitive success?

Women’s Influence in Manufacturing and Supply Chain

Join the supply chain conversation at Think Supply ChainIn March, I picked up a study conducted by Deloitte and the Manufacturing Institute (MI) titled “Untapped Resource: How manufacturers can attract, retain, and advance talented women.” The first paragraph hit me hard:

“In the midst of the resurgence of manufacturing in the US, companies are facing a widely acknowledged talent shortfall. Meanwhile, there’s one obvious source of human capital that the manufacturing industry has not fully tapped: women. Across all manufacturing sectors in the US, women are underrepresented in the workforce. While women represent nearly half (46.6 percent) of the total US labor force, they only comprise a quarter (24.8 percent) of the durable goods manufacturing workforce. The proportion of women in leadership roles in manufacturing companies also lags behind other US industries.”

I took a look on LinkedIn to see how many women I could find in vice president positions related to supply chain management. I sent notes out to some asking if they would be willing to talk to APICS about their experiences as female leaders in the field. After conversations with these fascinating women, it was clear we needed to do a feature article on women in supply chain for APICS magazine. However, one question still bothered me: while clearly there are very successful women in supply chain management, why are women still underrepresented in manufacturing?

One reason may be that even with all the diversity initiatives today, we continue to be uncomfortable talking about the lack of parity that exists in the workforce. It doesn’t matter if the subject is gender diversity or cultural diversity, it makes people uneasy. We are afraid to bring it up in conversation. When others do, it’s easier  to suggest that no problem exists, as if there is no longer an issue. Clearly, there is.

There are many perspectives from which to discuss this issue. Yes, one is political, and if the issue was strictly such, it may not be an appropriate conversation for a professional association. But, as the Deloitte/MI study points out, an important workforce development conversation must be had.

Drawing women to manufacturing

Working harder to attract and retain women in manufacturing is beneficial to everyone in the manufacturing industry. An increased number of women in manufacturing, according to the Deloitte/MI study, can

  1.  Address the skills gap issue in manufacturing.
  2. Improve the competitiveness of the industry by gaining women’s insights as consumers and influencers.
  3. Improve profitability. According to Catalyst research, Fortune 500 companies with a high percentage of women officers have a 35 percent higher return on equity and a 34 percent higher total return than companies with fewer female executives.

To address this issue, employers, professional associations, and educators need to participate in meaningful initiatives. Companies that want to attract and retain women must create more flexible work environments and amp up support for continuing professional development—benefits that attract talented men as well. And the manufacturing industry as a whole must do a better job of targeting and presenting itself to women. For this to happen, we have to be able to have the conversation. What can we do together to increase the number of women in manufacturing?

Reverse Innovation and Supply Chain

Think Supply Chain - Jason WheelerSharon Rice: I’m pleased to welcome guest blogger Jason Wheeler, CPIM, CSCP, to “Think Supply Chain.” Wheeler is Process Improvement Engineer, Warehouse Operations for Roche Diagnostics Operations and the APICS chair-elect.

I recently heard the term “reverse innovation” used during a discussion at work. Not being familiar with the concept, I quickly did a little research to find out more about it. The broad definition means goods are developed as inexpensive models to meet the needs of developing nations and, then, repackaged as low-cost innovative goods for Western buyers.

Wanting to learn more, I began looking for articles or a book that could provide more insight on the topic. A quick search brought up “Reverse Innovation: Create Far From Home, Win Everywhere,” written by two Dartmouth professors, Vijay Govindarajan and Chris Trimble. The book provides a better understanding of the concept while also discussing why large corporations have struggled with this idea.

Using the reverse innovation mindset, GE designed a portable, low-cost ultrasound machine that could be used in rural China. That same product now is used in many ambulances right here in the United States. GE went on to use the same process to design a low-cost portable electrocardiogram (ECG) unit for rural India. After the initial unit was completed, GE designed additional products with some minor enhancements. Similar to the portable ultrasounds, visiting nurses and primary care doctors are able to use the ECG units at rural clinics that could not afford the high-end units.

Where are some other areas where reverse innovation might be put to use? How might it be applied to improve supply chain and operations management?

The Total Scope of Supply Chain Management

Join the supply chain conversation at Think Supply ChainDefining the total scope of supply chain management—as an association professional, advocating for supply chain professionals—is one of my biggest challenges.

@ Supply Chain Management is an excellent blog run by Chris Jacob, a senior consultant for IBM. I am a little behind on my reading, so only today did I come across his post from February 11 in which he reproduced a graphical history of logistics and supply chain management originally published by SCM-Operations.com. It is a really interesting and valuable chart; however, it fails to present supply chain management as a holistic discipline that is more than the sum of its parts.

We do not share a common definition of supply chain management across the industry. Just take a look at the various professional associations to which you belong. Procurement organizations and logistics associations alike claim supply chain management as their expertise. And to be fair, APICS, which defines supply chain management from end to end, has its roots in planning and production. Even so, the APICS Certified Supply Chain Professional designation uses the SCOR model to validate candidates’ knowledge and skills from planning through returning.

Defining supply chain management

The APICS Dictionary, 13th edition, defines supply chain management as “the design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand, and measuring performance globally.” This definition of supply chain management first appeared in the 9th edition of the APICS Dictionary in 1998. As we are in the midst of producing the 14th edition of this reference, it is a good time to ask: Is this an accurate definition of supply chain management? Does it adequately capture the scope of supply chain management today?

Supply Chain Workforce Development in India

Join the supply chain conversation at Think Supply ChainI have returned from a truly extraordinary trip to Mumbai for the APICS Asia Supply Chain & Operations Management 2013 conference. We are really pleased with the outcomes. It was a 360-degree educational experience and the participants, speakers, and APICS staff all learned so much.

What continues to resonate with me is the participants’ desire to acquire more practical knowledge. During the opening panel on workforce development, we learned that internships are not nearly as available in India as they are in other parts of the world. As a result, students do not have the same opportunity to apply theoretical knowledge to real-world situations. Bhaskar Majee, director of sales planning and operations for Philips, shared that his internship experience in India was absolutely critical to his early success. But when Abe Eshkenazi asked the audience who had participated in an internship program, only two hands raised.

Practical Supply Chain Knowledge Is Key

Internships improve the employability of students post-graduation. But equally important to professional development is the opportunity to learn about different areas of the business once individuals are on the job. Antonio Galvao, vice president of supply chain for Diversey, now part of Sealed Air, talked about how valuable his 18-month rotation in sales and marketing was for him. Although he learned he was better suited to supply chain management, he gained a deeper understanding and appreciation for the work of his marketing colleagues. These types of rotation opportunities strengthen individual performance and the contributions people make to the business.

Dan Castle, vice president, Tata Sons, Tata Quality Management Services, talked about how opportunity is a door that can be opened from either side. Managers need to actively seek opportunities for their staff, but staff need to take more initiative in asking to be given opportunities as well. Professional development of the Indian workforce must start as a partnership between companies and their employees, both taking responsibility for continual learning.

As we continue to discern how best APICS can contribute to the advancement of the workforce in India, I am convinced we will also gain the insight we need to continue to advance the supply chain and operations management workforce across the globe, including in the United States. That is the wonderful thing about education: it is never a zero-sum game.

Is Innovation Your Next Game-Changer?

Join the supply chain conversation at Think Supply ChainThe bold headline on the P&G site reads “Connect+Develop.” If you haven’t been there, you need to go. The site is designed to attract partners with whom P&G can collaborate to deliver innovative solutions to the marketplace. It is an interesting approach to attracting partners: “Got a great idea to help better meet people’s needs? Come to us first!” According to the site, the thought process is simple: “Times have changed, and the world is more connected. In the areas in which we do business, there are millions of scientists, engineers, and other companies globally. Why not collaborate with them?”

P&G recognizes that the way we do business today is vastly different than it used to be. Innovation used to happen within a company. Now, firms are working together to innovate across supply chains. A particularly interesting story on the site explains how the Tide Pods were developed.

Tide Pods are individually packaged units of laundry detergent. They are genius, if you, like me, have a tendency to put too much soap in your high efficiency washer (resulting in epic overflow). You just toss the Tide Pod into the washer, the coating dissolves, and the detergent is dispensed. Others must agree because, according to P&G “Tide Pods is on track to becoming a $500 million dollar brand in its first year … while still only available in one market.”

P&G collaborated with a long-term supplier, MonSol in Indiana, to design and develop the pods. While they had worked on similar projects in the past, producing this product was more challenging because, “three different cleaning solutions are encased in separate chambers in each pac, all of which need to remain separate until fully immersed in water. Additionally, the film surrounding the cleaning solutions had to be designed to dissolve in a range of water temperatures, from hot to cold.”

P&G and MonSol each have special competencies that they bring to the table when working together. Each organization trusts the other based on its unique competencies and the relationship they have built over the years. Taking the attitude that they were one team, P&G and MonSol professionals worked together until they got it right. So right, in fact, that P&G recognized MonSol with its 2012 C+D Partner of the Year award.

Trust and collaboration are important not only to fostering innovation, but to creating high-performing supply chains. Yet many firms continue to struggle with the creation of trust-based relationships. So I wonder, what gets in the way?

Innovation by Surprise

Join the supply chain conversation at Think Supply ChainI am about to embark into dangerous territory – at least for me – and make a sports analogy. Innovation is about field goals and touchdowns. Both can add up to victory. At least that is how I am summarizing comments to my last post. Bob Trent, Paul Pittman, and Chet Frame write about the process of continuous improvement creating a culture of innovation. It’s about the discipline and, as Chet says, “the daily commitment to working better.” Field goals.

But Kevin Wurtz reminds us that touchdowns can lead to big victories. The concept of inward- and outward-facing innovation really is interesting. Kevin states, “inward-facing innovation is expected, it is why we do what we do. Outward-facing innovation is a surprise we didn’t anticipate.”

Continuous improvement obviously is not easy to achieve. It requires a sustained effort, a supportive culture, and absolute belief in the fact that no matter how well we are doing, we can do better. Although it takes a highly coordinated and dedicated effort on the part of employees at all levels in the company, it is in management’s control.

Outward-facing innovation, the big idea that emerges in part from the arrogance of knowing what people want before they do, comes as a surprise. But if it is not planned, can it be cultivated?

I wonder how many companies we can name that, year after year, create demand for products we didn’t know we needed? At the same time, companies continue to make those products better. How do they do that? What is their secret?