Peter Drucker, the father of modern management thinking, once said, “We spend a lot of time helping leaders learn what to do, but we don’t spend enough time teaching leaders what to stop doing.” With that in mind, I’ve been thinking about things leaders should stop doing in order to achieve dramatic improvement in operations and supply chain.
Stop Hiding Your Expectations
During my operations and supply chain evaluations, I often ask, “At the end of the day, how do you know you did a good job?” The answer is usually, “I didn’t get in trouble,” or “I don’t know.” Leaders need to communicate their expectations and help set priorities. Too many employees just do the best they can, and hope that’s enough.
In one recent engagement, I asked members of the management team to rank four aspects of operations: quality, delivery, cost, and flexibility. All four aspects are important, but a team’s top priorities inform their decision making and their expectations. In this case, each person had a different list, with different top priorities. That helped explain the poor results they were achieving: their expectations were in conflict.
Stop Blaming Others
In another engagement, the client had very low inventory turns and the sales team was frustrated that they didn’t have the right inventory in stock. When I approached the supply chain manager to get his perspective, he told me, “They won’t give me an accurate forecast, so how can I do my job?” Strong managers will figure out how to overcome challenges without blaming others.
In this case, shortening lead times, getting more data on real time, actual sales, and partnering with key suppliers could help to develop a flexible supply chain. Accurate forecasts are an oxymoron anyway, and supply chain managers need to figure out how to achieve top levels of performance even in the face of weak forecasts.
In the book Tim Cook: The Genius Who Took Apple To The Next Level, the author shares the story of Tim Cook joining Apple and moving manufacturing to China. It wasn’t to cut costs, it was because of the superior flexibility the Chinese could provide, despite unpredictable product flow and short-notice design changes. The result was a huge improvement in inventory performance and customer service, as well as securing Apple’s reputation.
Stop Beating Up Suppliers
Many companies pressure their suppliers to cut costs and improve performance without offering anything in return. It is not unusual for larger companies put annual 5% cost reduction targets on suppliers. If they don’t meet them, the supplier gets replaced. I once asked a buyer for a Fortune 500 company if they had a supplier partner program. She responded, “Of course! If they meet our quality, cost and delivery expectations, they can be our partner.” I wonder how the suppliers felt about that.
In my book, 1 + 1 = 100: Achieving Breakthrough Results Through Partnerships, I describe arrangements where companies work with a few key suppliers to continually reduce costs and improve service by working together on things like changing product design to be more manufacturable, reducing logistics costs, changing materials, and improving quality. In my prior job at a manufacturer, we wanted to be our suppliers’ most profitable account and achieve world-class cost and service levels. The results were very high profits, 99% shipped on time, inventory turns of 17, and market leadership.
It seems like there is always a better time to do something, and that time is “later.” Companies wait for lots of reasons:
- They need to hire a new manager.
- They have other important projects going on.
- They need a new ERP, which is scheduled for next year.
The excuses are many, but the result is singular: their competitors pass them by.
How do you keep from wasting opportunities by waiting? First, companies need a clear strategy and vision for improvement. I helped one of my clients develop a strategy for supply chain priorities that led to such massive change that a university studied them to see how they did it. Second, companies need to think outside the box, using disruptive approaches to change. Innovative thinking can put you so far out in front of your competition that they won’t catch up (unless you wait).
The Take Away
There is a cost of doing nothing which is often referred to as ROT – return on time. By waiting, things continue as they are now and solutions are delayed. Missed opportunities can be very costly. For some companies even a few weeks can mean the difference between keeping or losing a key customer.
What are your priorities? What should you stop doing to propel your company forward?
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