Cross-Functional Supply Chain Management Excellence

Supply chains excel when their functional groups - such as planning, procurement, manufacturing and logistics – execute with focus and technical excellence.  However, tunnel vision and siloed behaviors may cause a supply chain to stack up to be much less than the sum of its parts.  This blog describes how Performance Solutions by Milliken can help you implement a robust system to orchestrate consistently effective cross-functional support when and where it is needed.

Why do many supply chains experience cross-functional missteps when attempting new initiatives?

For most companies, “business as usual” is an oxymoron.  Business success requires attracting and satisfying profitable new customers, which requires managing a never-ending stream of new initiatives:  

• Developing and launching new products 
• Improving products with new packaging, new features, and new flavors
• Opening new marketing channels
• Sourcing new materials, sourcing from new vendors
• Leveraging new technology 

These initiatives may also be taken on as defensive plays. Companies must react to market challenges such as: supply cost and availability, actions by competition, new innovations, etc.

Most companies have a solid handle on how they manage initiatives within a given supply chain function. But solid management practices within each function doesn’t guarantee supply chain success. New initiatives can be highly disruptive, especially when they involve interdependencies that require a coordinated effort between several supply chain functions.  

In a nutshell, “Business as usual” means taking on many cross-functional initiatives. Managing those cross-functional initiatives is the “secret sauce” to delivering supply chain excellence. 

Here’s a simple case to illustrate the need for cross-functional coordination

The procurement contract for a key commodity raw material comes up for renewal. Through the bid process, Procurement finds and vets a new supplier who offers significant savings.  

• R&D confirms that the new supplier’s samples conform to industry product quality specifications. 
• Procurement places orders and the new supplies arrive at manufacturing plants.
• Certificates of analysis confirm that the new supplies meet specifications.  However, the new material does not react correctly during the manufacturing process. Quality rejections and losses mount while shipments are delayed.
• As it turns out, the incumbent supplier had worked with plants to “dial in” their specifications. It wasn’t truly a commodity after all.  
• Had manufacturing been involved early on, the crisis would never have occurred.

How great supply chains manage cross-functional initiatives 

Effective supply chain leaders recognize that cross-functional initiatives cannot be managed as exceptions, separate from business as usual.  They are vital opportunities to grow business and market share, and must be managed systematically.  Rather than seeing each initiative as a unique episode, effective supply chain leaders create a system to manage the program of initiatives.  Performance Solutions by Milliken will help your team follow a step-by-step process to deploy your Supply Chain Program Management system.  The 4 steps are:  Plan, Organize, Execute and Reflect/Improve  

Plan: Begin with the end in mind.  Senior leaders create a clear vision of what great cross-functional initiative delivery looks like. Supply Chain Program Management excellence will deliver:

• Strategic Alignment: Set clear priorities on the portfolio of initiatives.  Identify interdependencies, clarify roles, and assign ownership.
  Initiative Execution: Execute projects rapidly and with a high success rate.  Measure and track results delivered.
• Organizational Learning: Develop playbooks to accelerate success on similar initiatives in the future. Learn from successes and failures to continually improve the playbooks.   
• Organize for Success:  Program management involves assembling teams at two levels in the organization:
• Governance: Key business and supply chain functional leaders are responsible for strategic alignment, oversight of project execution, and providing guidance for each initiative. Each initiative that is activated is assigned a Sponsor who is a member of the Governance team.  
• Project Execution: project managers and “heavy lifters” drive projects to rapid completion using a project management process. However, initiatives differ as to which functions and tasks are involved. Project team rosters are tailored to organize the expertise and   heavy lifting needed to accomplish the work. Roles and responsibilities are clearly stated, especially in areas where cross-functional support is required.

Deploy proven cross-functional processes for governance and execution of the initiative program 

A governance team owns the Stage Gate Review process. This process monitors initiative progress at key milestones, provides support, guidance, and recognition to project teams. (See Figure 1)

Project teams execute initiatives following a project management process. This is an expansion of the Plan-Do-Check-Adjust cycle, using tools familiar to all Lean, Six Sigma, and Total Productive Maintenance professionals (See Figure 2).  

Celebrate and learn from successes and failures 

Project teams document their work in playbooks for use on similar projects in the future. This speeds future execution and eliminates “reinventing the wheel” when new people move into project management roles. Sponsors engage their project teams in post-mortems to recognize achievements and capture learning.

Program Management processes and tools are robust and not overly complex.  However, they don’t come with a set of instructions.  Every supply chain has its own unique culture and structure. Tailoring Program Management processes for the best fit with your supply chain takes careful study and informed judgment. PSbyM Practitioners have a deep well of expertise and experience helping clients learn and deploy these processes.  

Will Program Management carry a heavy headcount burden?

The short answer is no, and here’s why. 
If your supply chain is undertaking cross-functional initiatives now, you are already dedicating resources to this work. Whether the resources are assigned full-time or on a temporary basis, either way, they are doing the work.  
If initiatives occasionally (or too often) create problems, you are also investing resources to fix them, from senior leadership to the operations floor.

That said, there is a front-end investment. It takes time and effort to learn to organize and execute in a new way. This is where PSbyM Practitioners can provide excellent coaching to speed the uptake of new capabilities.
Program Management is a highly effective way to execute cross-functional initiatives.  It helps supply chains avoid the losses that add up when “the left hand doesn’t know what the right hand is doing.” There is a learning curve, and PSbyM can help with that. The bottom line is, Program Management will become a better, more successful way to coordinate and execute your cross-functional initiatives, to capture market opportunities and to create unique competitive advantage. Contact us today if you’re ready to improve your supply chain management.