May 2019 | Commentary | The Lean Supply Chain

Managing Change in Turbulent Times

Tags: Lean, Supply Chain, Lean Logistics

Paul A. Myerson, instructor, management and decision sciences at Monmouth University and author of books on Lean and the Supply Chain for McGraw-Hill, Pearson, and Productivity Press, 732-571-7523

We are now in a "white water rapids" phase in terms of the global economy, requiring flexibility from the processes, technology, and people in the supply chain to navigate these rough waters.

Making the transition to a truly flexible and lean supply chain, especially during these turbulent times, involves changing the three elements necessary for successful business transformation: processes, technology, and people.

The transition involves using a structured approach to make sure that changes—which can range from a simple process tweak to major policy or strategy revisions—are implemented successfully if the organization is to achieve its potential.

revising ProcessES

Companies can utilize many tools to manage process change in a supply chain. These tools include:

  • Benchmarking to clearly identify performance gaps, and thus focus supply chain management efforts on the areas most in need of improvement.
  • Six Sigma to improve quality throughout the supply chain.
  • Lean strategies to streamline processes or eliminate waste within the supply chain.

transforming Technology

Many companies are using digital technology to transform key business areas, but technology can't be applied haphazardly. When applied properly, however, it can enable good processes.

Technological advancements have made it extremely easy to gather and analyze vast amounts of data. Focusing on key pieces of data used in decision- making saves time and money.

Many leading companies have gone further and have begun to create a true digital organization that automates repeatable tasks to increase efficiency and drive down costs.

managing People and change

Few people like change within their organization, but if management leads the change initiative properly, the process can be successfully implemented with minimal resistance.

To effectively manage change in your organization, you must first educate leaders and gain their commitment and support for the effort. Leaders must communicate why the change is needed and what benefits they expect.

Leaders need to know when change is needed, work on getting the change accepted organizationally, implement change in the best way possible, and relate the need for change directly to the business value proposition.

For example, leadership needs to be able to clearly describe how improved demand planning helps sustain and increase revenues through improved customer satisfaction and reduced production, distribution, and inventory costs.

At this point, it is also important to identify risks and have a mitigation plan in place if issues arise. For example, consider piloting change in one geography or business unit before rolling it out across the entire organization.

Furthermore, clearly defining roles and responsibilities within the organization will help earn employee buy-in and minimize confusion.

Finally, organizations must implement and continuously measure metrics—and design rewards—that reinforce and eventually maintain the desired future state.

In the end, creating a lean, flexible supply chain requires changes in your organization. It's up to you whether to cling to the past with the inherent risks or embrace change and look to the future.