Home' MHD Supply Chain Solutions : MHD Spt-Oct 2014 Contents 14
Chief supply chain officers (CSCO)
face constant pressure to drive
change, improve performance, and
reduce costs. Within the industry, everyone
is talking transformational change. While
the benefits of transformation can be
dramatic, yielding significant cost reductions,
improving competitiveness, and delivering
superior service to customers, successful
transformation requires vision, effective
planning, executive buy-in and a well-executed
Identifying the need for change
Knowing your supply chain performance
needs improvement is one thing; knowing how
to implement improvement is a much more
complex process. Should you choose the slower,
more methodical incremental approach, or
undertake a dramatic transformation of your
entire supply chain process? And just what is
the difference between the two?
Incremental change is more likely to involve a
single function or process, and is often narrower
in scope. The change is evolutionary, rather
than transformative, and does not engage the
full organisation to fundamentally reconsider
how it operates.
Transformations, on the other hand, are
focused surges of coordinated activity across
multiple processes, in response to a trigger that
accelerates the organisation’s performance to a
higher level and delivers new capabilities.
Choosing an approach
Leaders need to define how much change they
can reasonably propose and successfully execute.
Use Figure 2. to choose the approach that
is right for your organisation. Only undertake a
transformation if all of the following exist:
• A clear trigger or catalyst for rapid and
• Executive buy-in with at least one executive
willing to be accountable for the transformation.
• Cross-functional or cross-organisational scope.
• Adequate staff (both full and part time) to
work on the transformation.
• Dedicated funding and adequate budget to
complete the transformation.
• The organisation as a whole, including the
leadership, has the capacity and motivation to
change processes, roles and incentives.
If any of these are lacking, it is wiser to adopt
a more modest, incremental approach.
Driving change through
More than just an industry buzzword, supply
chain transformation has the power to radically
change operations and deliver a dramatically
improved service. But successful transformation
doesn’t happen overnight. Sure, the results can
be impressive, but as these examples show, it
takes long-term vision, leadership, best practices,
charisma and often a hefty budget to achieve.
The catalyst for transformation is often critical
and almost always the result of one or more
external forces. These can include poor customer
satisfaction, an acquisition, or growth initiatives.
Planning and executing supply chain
transformation is a complex, multi-year journey.
Whilst it can dramatically improve performance,
care must be taken. Here are four steps to the
1. Executive buy-in
The first step in transforming the supply chain
is often the most overlooked step – getting the
executive team on board. It is vitally important to
understand the CEO’s strategic plans, corporate
goals, and external drivers that are forcing the
supply chain changes. Does transformation align
with these? It is important to show the execu-
tive what benefits, costs, and timeframes other
companies have experienced when transforming
their supply chains. Securing executive involve-
ment and support goes a long way to success-
fully pulling off a supply chain transformation.
2. Assessing maturity
As with any improvement initiative, understanding
your organisation’s current capabilities is a vital
first step in launching transformation. Assessing
the maturity of your current supply chain
establishes your starting point. It helps to identify
TO TRANSFORM OR
NOT TO TRANSFORM?
Call us now on:
1800 COLBY 1
Punched into high tensile steel at
just the right angle, the famous
Colby® Diamond Slot makes
ColbyRACK the toughest
Forged 4-tang steel connectors
wedge snugly into diamond slots,
eliminating sloppy “clearway”. It’s not that
complicated. Common sense will tell you that the
stiffer the connection the more rigid the structure,
therefore the more superior the racking system.
Another ColbyRACK advantage.
Figure 2. When to use an
incremental versus a
approach to supply chain
both play a role.
MHD SUPPLY CHAIN SOLUTIONS — SEPTEMBER / OCTOBER 2014
MHD Sep-Oct 2014 8-17.indd 14
5/09/2014 2:56 pm
Links Archive MHD Nov-Dec 2014 MHD JULY-AUGUST Navigation Previous Page Next Page