Supply Chain Reinvention Breakthroughs
We partnered with an executive to reinvent a large organization’s worldwide supply chain operations. We had helped the organization with several improvement initiatives (e.g., process improvement, six sigma, Baldrige), and they now they were ready and eager to reinvent all their operations.
We put together a full-time team with representation from planning, sourcing, procurement, logistics, materials management, and finance. We conducted a team build and provided the team overview training in reinvention approaches and tools. The team became extremely cohesive, deeply respected each other, and built upon each person's strengths.
We took the leadership teams through the five phased process highlighted below.
During the assess phase, we mapped the end-to-end processes by product type, and assessed costs (e.g., planning, sourcing, procurement, logistics, materials management, AP), timeliness (e.g., cycle, lead, processing, inspection, move, queue), and other performance levels.
We compared our performance levels with top benchmarks. We then researched and visited several of the highest performing organizations. The insight that everyone gained from these visits were significant, and the team become excited about the possibilities.
We ask the question, how can substantially improve performance (e.g., reduce costs, improve timeliness)? We identified, explored, and considered several innovative breakthrough alternatives.
We carefully designed new end-to-end processes, measurement systems, technology requirements, organizational structures (e.g., cross-functional customer service teams), roles and responsibilities, performance expectations, training and transition plans. This included plans to significantly reduce the number of suppliers and move to Just-In-Time inventory systems.
We involved the workforce throughout the process. We continually asked for and regularly received feedback. Because we had developed clear plans and designs, the deployment went smoothly.
We reduced internal processing costs alone by $175 million, and the average “order to receipt” cycle time from 85 days to hours. Customer satisfaction rates skyrocketed. Customer were able to order most items online. The cross-functional customer service teams addressed more complicated requirements.