Supply Chain Management: From Vision to Implementation

1. Supply Chain Management: From Vision to Implementation Chapter 14: People Management: Bridge or Barrier to SCM

2. Chapter 14: Learning Objectives • Describe the characteristics of a SC manager. • Describe the vital role people play as a bridge or barrier to SC collaboration. • Explain how to cultivate a culture of empowerment. Discuss the ABCs of empowerment.

3. Chapter 14: Learning Objectives • Explain the importance of investing in employee capabilities through training, especially in the areas of cross training and teaming. • Discuss why developing and integrating human and technological resources is critical to developing world-class processes.

4. People Management We know how to invest in technology and machinery, but we’re at a loss when it comes to investing in people. –Peter Senge

5. The Supply Chain Manager What are the characteristics of the person in the middle? What skills and mind- set does a true supply chain manager need?

6. The Supply Chain Manager • True supply chain managers are defined by mindset and skill set. • Strong functional skills • Holistic thinker • Analyzes trade-offs rigorously • Builds collaborative relationships • Executes with discipline • Exemplifies leadership • Embraces change

7. The Most Valuable Asset? If you leave us our money, our buildings, and our brands, but take away our people, the Company will fail. But if you take away our money, our buildings, and our brands, but leave us our people, we will rebuild the whole thing in a decade. - Richard R. Deupree, CEO Procter & Gamble, 1947

8. Great Management Lies Employees are our most valuable asset • Employees are our most valuable asset • I have an open-door policy • You could earn more money under the new plan • We're reorganizing to better serve our customers • The future is bright • We reward risk takers • Performance will be rewarded • We don't shoot the messenger • Training is a high priority • I haven't heard any rumors • We'll review your performance in six months • Our people are the best • Your input is important to us - Scott Adams

9. Investing in Employee Capabilities Education…must reach everyone and it will have to go all through life. If you stop, you become obsolete, you cease to be competitive. The obsolescence curve has compressed, Bud Lalonde estimates the amount of investment that must be made in acquiring new skills to avoid obsolescence. • 10 % to avoid obsolescence in five years – 1990 • 20% to avoid obsolescence in three years – 2000

10. P&G Leadership Development Attributes

11. John Deere and SC Education • Deere offers over 50 courses to Deere employees and employees at first and second tier suppliers. • In addition to upgrading skill sets, these professional development classes bring managers together in a learning environment where they can build relationships.

12. Deere & Company Training Courses

13. Deere & Company Training Courses

14. Management Training In addition to problem solving and role specific training, managers should receive training in the following: • Overview of the organization focusing on its history, culture, and objectives. • Review of customers, their needs, wants, and success factors. • Analysis of key suppliers, including their competencies and capacities. • Exercises in communication, teamwork, and paradigm shifts. • Specific instruction regarding the firm’s performance measurement and reward system.

15. Training Program Problems • Management training is a large investment by a company. • Managers often change employment after only 3 to 5 years. • Job rotation and manager trainee programs delay time between hire and permanent job placement.

16. Cross-Training • Cross functional workers emerged with Lean manufacturing principles. • Toyota, the inventor of Lean, seeks to develop world-class process capabilities based on development and integration of people and technology.

17. Cross-Training - Lessons from Toyota • Requires heavy investment in problem solving skills. • Requires broad job descriptions. • At NUMMI, the number of job descriptions was reduced from 200 to 3. • Requires management to empower employees with the authority and responsibility necessary to make real decisions that make an impact. • Jidoka – man and machine system; the authority to stop the production system when problems are identified. • Requires management to develop collegial relations with the workforce.

18. Cross-Experienced Management Team • Goal is to provide managers an understanding of roles and challenges inherent in diverse value added activities throughout the company. • Many companies have developed multi-year manager trainee programs that include job rotation, providing trainees with extended experience within various functional areas. • Helps to build relationships, reducing barriers to cross-functional cooperation.

19. Job Rotation Programs • Develops an appreciation for the needs and wants of customers • Become familiar with products and value-added process • Gain perspective of different functional areas and how the functional areas work or don't work together • Learn the "language" spoken in each area • Establish relationships, improving future decision making, reducing barriers to collaborative initiatives • Develop appreciation for workers that make the product or interface with customers • Gain understanding of the role outside suppliers play in product development, production, and distribution

20. Job Rotation Programs • Job rotation can continue after initial hiring. • Communicates that the company is serious about systems thinking and teamwork. • Improves cross-functional communication. • Can be accomplished with assignment to cross-functional task forces and project teams.

21. Types of Teams

22. Types of Teams

23. Types of Teams

24. Advantages of Teams Decision Ownership Leveraged Diversity Faster Task Completion Better Organizational Understanding Disadvantages of Teams The Never-ending Debate Groupthink Social Loafing Peer Pressure Advantages and Disadvantages of Teams

25. Availability of Resources Clarity of Team Objectives Commitment of Members to the Team Complexity of Team Assignment/Task Executive Management Support Functional/Technical Skills of Team Members Open and Honest Team Communication Organizational Experience with Teams Overall Organizational Support for Team Success Performance Feedback and Information Support Measures Used for Team and Team Members Supplier Involvement Team Autonomy/Mandate Team Cohesiveness Team Leadership Team Longevity Team Member Personalities Team Process Skills of Team Members Team Reward Structure Team Size Factors Impacting Team Dynamics

26. Team Design Process • Identify a well-defined goal that can be clearly articulated and communicated. • Identify the variety of expertise and experience required to accomplish teams goals. • Define time commitment required. • Identify people with the right knowledge, experience, and complementary working styles. • Determine whether individuals can be freed from current tasks and whether their participation will add more value to the firm than those tasks. • Identify a skilled leader.

27. Working Styles • The Quick Starter - highly energetic, sees an opportunity and quickly mobilizes energy. • The Fact Finder - very meticulous and oriented toward detail and analysis. • The Follow Through - determined and focused on carrying out a task to its completion. • The Implementer - very task oriented, with a particular penchant for hands on work.

28. Requirements for Team Building • Common Goal - Successful teams possess a common goal • Leadership – Successful teams are led by well-respected managers who understand team dynamics • Communication - Open, constructive communication is fundamental to team success • Cooperation - Effective teams sometimes require compromise • Specific Roles - Team members understand their role and responsibilities

29. Requirements for Team Building • Measurement - Clear and precise performance measures facilitate success • Individual Responsibility - Each member accountable for individual and team performance • Resources - Adequate resources/information is available • Time - Chemistry emerges as team members spend quality time working together

30. Team Development Process • Forming - determines team membership. • Storming - establishes direction, purpose, roles, responsibilities, and rewards for both the overall team and each team member. • Norming - establishes team rules and procedures, helping teams to synchronize their activities. • Performing – identification of problems and opportunities, establishing a plan of attack, and then implementing the plan. A well-designed, well-trained team often finds that performing is the easiest part of the team process. • Adjourning - up-front definition of key milestones and a specific ending point in terms of outputs and a target completion date. Once a team completes its designated task, it should disband.

31. Team Measurement • Measurement drives behavior • Teams require the correct balance between team based measures and individual measures. • Emphasizing team outcomes can lead to social loafing and a loss of individual motivation. • Emphasizing individual outcomes can undermine team performance.

32. Establishing an Empowerment Culture • An empowerment culture precedes the creation of knowledge workers and the learning organization. • Knowledge workers recognize opportunities, analyze problems, and proactively move to find creative solutions.

33. Pathway to Empowerment

34. Leadership - The 7 Rights • Get the right people • Communicate the right expectations • Provide the right training • Measure the right things • Reward the right behavior • Support with the right resources • Give them the right opportunity (i.e., get out of the way).

35. Goal Setting • Aggressive and systematic goal setting drives out complacency, helping to sustain momentum of an empowered workforce. • Failure cannot be punished, it must be used as a learning experience. • Managers must work with employees to facilitate goal attainment.

36. Communication and Teamwork • Managers must communicate expectations, corrections, and praise. • Managers must recognize team members for their contributions toward overall success. • Recognition and empowerment increased motivation and commitment.

37. ABCs of Empowerment • Affirmation – positive reinforcement to the workforce making them feel truly valued. • Belonging – employees must feel a sense of community and commitment. • Competence – the company must invest in employee capabilities throughout the organization.

38. Employee-Oriented Companies • Services for employees—e.g., a gym & health-related programs • Benefits & salaries suggest company cares about employees • Company asks for employees opinions & input for decisions • Treat each person as an individual • Employees understand their position & are knowledgeable • Company continuously trains & updates skills of employees • Employees are happy doing their job • Allowing employees to advance & grow in the organization • Open communications between employees & immediate boss

39. Employee-Oriented Companies • Meetings are more like town hall discussions • Management is openly willing to receive feedback • Trains employees beyond job requirements • Company is generous with benefits • Fair level of pay—competitive level • Provides services to employees that are not job related • Work space is clean, user friendly • Employees use updated equipment • Well run human resource department—easy access to services

40. Employee Satisfaction Factors

41. Employee Satisfaction Factors

42. Employee Satisfaction Factors

43. Integrating People and Technology • Organization’s needs must be matched with technology. As a general rule, the simplest technology that will meet product and process needs should be given priority. • Organization’s technology strategy should support long-term approach to building world-class value-added processes.

44. Integrating People and Technology • Adequate support must be in place to implement and support new technologies. • The following technology pitfalls should be avoided: • The “follow-the-leader” mentality • The “shiny-hardware” syndrome • The “island of automation”

45. Integrating People and Technology • Workforce must be viewed as a critical resource and the necessary capital for training programs must be committed. Once a firm invests in workers, it must give them the responsibility and opportunity to use their increasing skills. • Managers must develop familiarity with value-added processes and key technologies. Appreciation and understanding of the abilities of line workers and managers in other disciplines is needed to coordinate and integrate competitive efforts. • Appropriate performance measures that do not penalize workers and that promote “revolutionary” enhancement should be adopted.

46. A Return to the Opening Story Based on what you have now read and discussed: • How did Doug and his team get so caught up in SCM that they forgot to get everyone involved? What are the dangers of having the task force do it all? Can SCM thrive if it doesn’t become part of the culture? • What should a supply-chain training program look like? Who should be involved? How much training is needed and for how long? • What is a culture of empowerment? What does it look like? How should Doug go about cultivating it?