As we go through the three “must-haves” for transforming your factories, the second is potentially the most transformative because it optimizes and empowers the people making your inventory decisions.
When teams gain access to clear and accurate information, they start to standardize their daily work, hold each other accountable, and align on a shared set of rules and principles. This increases trust, productivity, and the power of daily decisions built not only on accurate, trustworthy information but also on industry and company-wide best practices.
Successfully standardizing the daily work of your supply chain teams means you’ve done the following:
- Established clear, achievable, time-bound goals that everyone can see and work toward
- Linked daily activities with organizational goals and initiatives
- Provided ready-to-use information at team members’ fingertips, so their time is spent on actions (not on analysis).
This means your team is equipped every day to make the most impactful inventory decisions—based on your specific business goals and best practices.
Simple, right? Well, not always. There are some big hurdles and challenges that get in the way of this step: Company-wide alignment, change management, trying to bite off too much at once, and, of course, remote-work mandates. So here are the best practices to sidestep these challenges and systematically roll out new standard work.
1. Link daily activities with organizational goals. Make your goals data-driven and clear, and then put them all into one place for everyone to see. This is pivotal to drive accountability and buy-in from your teams. And this is what will ensure everyone is moving in the same direction toward shared goals.
2. Develop specialty teams. Assemble specialty teams by enlisting the help of subject matter experts to tackle specific problems that are the biggest drivers for your business. For example, we’ve seen success from customers who deploy a Shortage Attack Team—a cross-functional group that focuses on prioritizing and tackling shortages based on criticality level until the situation is under control.
3. Provide tools to support. Factories are hectic. Have you consolidated inventory and shortage information in a single place? How about providing a central platform from which teams can manage their daily workflows? Better yet, what if you automated it all for them so they can stay focused on the top actions they should take every day?
5. Stay focused. We’ve seen manufacturers begin their factory management transformations from a standing start. Because they stayed focused on daily incremental improvements to standardize work, they achieved dramatic results in inventory and shortage reduction and improved on-time delivery—all in just a few months. A little goes a long way, so stay focused on the small changes that will make the largest impact.
CUSTOMER STORY: Eating the elephant one bite at a time.
Our partners at Terumo faced an unprecedented demand increase during COVID-19. Direct Procurement Manager Ben Galka described his team’s approach to standardizing work as “eating the elephant one bite at a time.” It’s the perfect analogy: There’s so much to take on, so it’s crucial that you set reasonable goals and not try to solve everything at once. Read their story here.
So you’ve established total visibility across your organization, and your team has adopted standard work processes to reduce shortages and optimize inventory levels. What’s next? It’s time to layer on actionable intelligence for your factory decision-making.
Change management is a concept that describes the process of managing changes to processes, people, and tools in an organization, usually associated with Continuous Improvement and Lean principles. The main concept is broad and vague and describes the complexity with the continuous improvement process to make businesses more efficient and cost effective.
Define, Measure, Analyze, Improve, Control. It is a concept used in continuous improvement and Six Sigma philosophies, and is best described as a tool or framework that can be used to help you walk through change management and improvement processes for any projects you might be undertaking.
Plan, Do, Check, Act. It is a concept used in continuous improvement and business management, and the concept usually refers to the iterative process of management of processes and projects. An alternative version is PDSA, where Check is replaced with Study which encourages more critical thinking about the problem rather than simple inspection or measurement.
A workflow is a concept describing how a process is executed, whether by a person or in an automated fashion. A process or workflow has inputs and outputs, and there should be clear steps to go from input to output. The concept in business is used to describe a process which is likely to be a target for a continuous improvement project to be made more efficient in order to save on productivity costs and improve margins.
It can also be used to describe standard work, which is the philosophy of having all of your workers performing the same workflows for a certain task in order to best be able to measure its efficiency and determine potential improvements. It ensures processes become habitual and easy to perform to reduce the amount of cognitive load required to complete tasks.
Learn more about how LeanDNA’s builds best-practice workflows directly into daily work of supply chain teams.
A high level supply chain goal might be to reduce lead times to your customer and improve on time customer delivery percentages. Another goal might be to reduce your overall supply chain costs to improve working capital and improve profitability.
Lower level goals that would support these would be to improve your supplier on-time delivery metrics, reduce shortages, and reduce on-hand inventory levels.
The term actionable intelligence perhaps originates from the military, law enforcement, and security fields. Its use in business and software fields describes information that can be used to make smart decisions, often referring to using big data to come up with better business decisions.
At LeanDNA, we describe actionable intelligence as the analytics and insights into your supply chain data to make smarter decisions to reduce your shortages, improve your inventory positions, and reduce the burden of those decisions on your supply chain teams.