Why don’t our processes work anymore?

The past few years have seen major changes for manufacturers, distributors, and supply chains. But we’ve seen change before. We have tools and methodologies and techniques, and… So why is this so different?

It’s because our global consumer markets have matured. They know what it possible and they expect you to deliver it. This means we have to meet their expectations with something different than we’ve used before. Luckily, while the effects of the change are revolutionary, the change required is evolutionary. This doesn’t mean it will be easy. However, mastering the change will make yours the company others turn to for best practices because you’ve been able to create an ordered, aligned, and integrated organization.

What does creating an ordered, aligned, and integrated organization mean?

For this post, let’s first look at a bit of history to get our bearings and to understand the structural choices moving forward.

In the U.S., from Henry Ford’s assembly line and on into the 1960’s, our manufacturing environment focused on operational metrics: efficiency and utilization. Did we make what we thought we’d make in the amount of time we thought we’d make it? And did we utilize the machinery as much as possible? The focus was on the day to day output and performance.

Starting around the 1970’s, global competition began. The U.S. now had to take a more tactical approach to survive and thrive. Processes had to be created that streamlined the day-to-day performance. Quality had to be embedded beginning with design and continuing through engineered manufacturing lines. Methodologies such as Just-In-Time, Theory of Constraints, Total Quality Management, Lean, Six Sigma and others became influential in longer term performance. The tactical process aspects began filtering back into the office areas where it was realized that support functions play important roles in the final quality of the products and services provided. The longer term focus of tactical excellence did not remove the importance of day-to-day operational performance, it added to it and our management techniques had to adjust.

Our focus on tactical performance lasted until a few years back. At that time, advances in technologies such as social media and social networking (the integration enabler – think cloud computing) made it easier for customers to have a very vocal part in the way companies had to perform. This has served to highlight the need for improved cross-functional integration, changed what used to work for collaboration to coordination, heightened the need for executable strategy, brought into notice the need for advanced demand forecasting and capacity coordination, and made visible the requirements of flexible processes that deliver performance without sacrificing quality, time, or cost. A very tall order.

The secret to untangling all of the new problem areas begins with strategy creation at the executive level. There are two parts to strategy creation; strategic planning and strategic execution. Strategic planning leads into strategic execution. Strategic planning is the competitive scanning while strategic execution sets up the platforms to act companywide on what will be done based on the decisions made on the data from the scans. Pushing strategic planning into the tactical areas creates confusion, frustration, and chaos since it is not in actionable form. Strategic execution is the actionable form required by talented tactical management teams to begin the corporate-wide conversations on how

specific problems can be solved with specific process changes. Cross-functional performance is built into the good strategic execution and becomes part of the DNA of the business.

This is the beginning stage for the creation of an unbeatable competitive stance that delivers what the customer wants reliably. Operations are still important. Tactical processes are still important. Strategy is the latest piece to change in methodology since it links all the components and actions of a company. Strategy now has to be perfected from nice sounding phrases into actionable platforms.

Key words and concepts: manufacturing, supply chain, strategy, performance, lean

About the author:
Cynthia Kalina-Kaminsky with Process & Strategy consults with and provides training for organizations eager to increase their competitive value by helping enable growth, align performance, make and move product (even when the product is a serving of electrons). She has been invited to teach SCOR (Supply Chain Operations Reference model) in Baton Rouge this October. SCOR is the framework Fortune 500 companies use to increase their agility.


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