Uncovering the Puzzle of International Workflows: The Broken Links Scenario!
I'd just stepped foot on the scene. Meeting the operational leaders from Americas, Europe, and Asia, I couldn't help but notice their intelligence. But it wouldn't take long before I realized that every region had their own quirky ways of doing things. From a broader perspective, there were only shattered global processes.
To say there were shattered global processes is a bit of an understatement. The truth was, there weren't any truly global processes. Every site had their own distinctive local methods, so there weren't even actual regional processes.
Clearly, there must be a better way of doing things. Another case for The Supply Chain Sleuth™!
Setting the Stage
The company had two dozen facilities scattered around the world. Each facility handled tasks that were similar. They received goods, store them, performed light manufacturing activities, transformed materials into products, and shipped them in accordance with customer orders.
Some facilities shared customers, while others served unique clients. Some shared customers operated in the same manner across all facilities, but others did their business differently with each facility.
Some materials were sourced and managed by the customers, while others were handled by the facilities. They all reported to Regional Vice Presidents of Operations, one for each region: Asia, Europe, and North America.
From the outside, it looked like a typical manufacturing, logistics, or distribution operation. But the overall operational performance of the organization was inconsistent. Delivery performance, quality, operating costs, profitability, inventory turnover, cash flow, and return on investment all varied wildly from facility to facility, within regions, and across regions.
Customer satisfaction was hit or miss, and employee morale was all over the place, regardless of culture or geography. And a quick glance at benchmark comparisons with competitors showed the company trailing behind in almost every metric.
At a company-wide management meeting taking place on my first day, I got the opportunity to quickly chat with many of the company's ground-level leaders. I heard complaints about inconsistent performance, different ways of doing things, mixed results, and customer issues aplenty. No one was happy about how things had been run. Apparently, my predecessor didn't know the first thing about operations.
Managers from all parts of the organization were begging for my help and probably wondering if anything would actually change, given their past experiences.
Something was really off.
Enough of the babbling, time to start an investigation!
The Research
The only way to figure out what was happening was to visit every single facility and see for myself. It wouldn't do to just sit behind a desk at corporate HQ, poring over charts and chatting with people over the phone or email. First-hand experience was the only way to get a proper understanding of things.
And a visit to each facility had to be thorough and detailed. I needed to physically inspect and review every aspect of each operation. I needed to talk to the folks on the warehouse floor directly. I needed to dig.
Too many executives visit facilities and do the "Royalty" tour or the "Tourist" tour. Facility management prepare for those kinds of visits by giving a fresh coat of paint, tidying things up, and keeping visitors away from areas they'd rather stay hidden. These visits are cursory and superficial. Any operations exec worth their salt can quickly see past these tricks and find ways around them.
I told each Regional VP to organize a visit to each facility. I'd spend approximately two weeks in each region, visiting every single operation. My intention was clear: an in-depth, detailed look at every aspect of every facility.
I started my investigation in the U.S. and Mexico.
In Florida, I encountered a high-functioning team. They had a couple of customers who were actually competitors, so their operations had to be separate and secure. The team gave me great insight into their operation, what was working, and what wasn't. They were open to some of my suggestions. I left with a positive impression of the team.
Next came a facility in the Midwest that left a completely different impression. The management team was somewhat dismissive and arrogant. Their insincerity shone through. They attempted to give me the "Royalty" tour, but I quickly thwarted their plans and crawled through every nook and cranny of the operation. Clearly, this operation needed a top-to-bottom overhaul.
As I traveled through the Americas, I met more operations like the one in Florida and only one that was like the one in the Midwest. Overall, the results were mixed, but I had a good feel for the current condition of things – a condition I may have never understood sitting behind a desk at headquarters.
Next, I headed to Asia, visiting sites in six different countries. Only one operation seemed subpar. The Asian teams were accommodating, listened well, and overall, I left with the impression that things were in control, with plenty of opportunities for improvement.
Lastly, I went to Europe, another five countries on the itinerary. The operations were all well-oiled machines, with the exception of only one obviously weak operation. They were implementing some innovative initiatives on their own. Their future-focused mindset and visioning all stemmed from the smarts of their Regional VP.
As I headed back home, I had a lot to think about. I had completed my investigation. Now I had to review all the information and observations I'd collected, absorb it, internalize it, and decide what action, if any, we needed to take.
Solving the Puzzle
The worldwide travel served not only to educate me on what was going on in our operations, but it also allowed me to quickly meet and develop relationships with the operational team from around the globe.
I heard the level of openness to change and innovation, and the level of resistance and pushback. Now I knew who was strong, who had great potential, who needed help in development, and who would struggle to stay on board.
As I contemplated all the information I'd accumulated, an overarching thought suddenly occurred to me.
Regardless of how well an operation was run, what customers a facility was serving, where a facility was located, or how effective the management team was, the core processes governing the operation were the same at every facility.
Each facility received goods, stored them, received customer orders, processed those orders, picked and packed the goods, and shipped them according to the customer's direction. No matter what the goods were or who the customers were, each process had to be performed.
Each facility operated independently, even within each region. There was no formal or even informal information sharing or best practice sharing among facilities; they were standalone entities, never sharing knowledge.
What I realized was that although those processes were similar, the way in which each process was performed was different from one facility to the next, even within the same region. Each facility had customized those processes to suit their specific needs.
The result was that none of those processes was optimized across the entire company. With as many facilities that we had, there were as many different ways of performing those standard processes. Even for theoretically well-run operations, there was no guarantee that the way they performed any single process was the best possible way. It was merely their preferred way of doing things.
And that was the fundamental problem of broken global processes. While all of those processes worked, they were not optimized. In effect, these processes were broken from an overall optimization perspective.
I never would have had this epiphany sitting behind a desk. Only by visiting each facility personally did I accumulate enough experience to arrive at that insight.
Shaping the Future
I realized that for any single process, there should be one best way of doing that process. If I had 24 facilities performing receiving, there should be an optimal way of conducting receiving operations for all of them. If I could identify that one best way of receiving, we could deploy it to every single operation, making everyone more efficient and effective. It made sense.
I discussed my vision for this initiative, or more accurately, imperative, with my Regional VPs. We needed to launch a "Global Process Excellence" initiative.
For each of the twelve processes we identified, we'd assemble a team consisting of representatives from each region to collaborate on best practices and develop an action plan to deploy the best practices across the entire global operation. They would proceed with my direct authority and be given wide latitude to implement the necessary changes.
I set up a governance system to ensure regular progress was being made. I would meet with each team once every two weeks to show my support for the initiative, to check on progress, and to offer help as needed.
And so our efforts began to fix these broken global processes.
Results
In just six months, we began to see and realize significant productivity improvements across most processes. Progress varied from one area to the next, with some improvements coming faster than others. But everyone was moving forward at some pace.
One particular team that created some industry-leading, world-class results was the order fulfillment team. They developed and implemented an eCommerce order fulfillment process that allowed them to pick and pack a customer order within four minutes of receiving the order. At the time, it was the fastest in the world, even beating Amazon.
Another team focused on inventory turnover saw extraordinary results in just nine months. We doubled our inventory turnover, moving the company from a lagging position in the industry to a leading position.
Drawing the Line
Our investigation not only revealed underlying issues with broken global processes that wouldn't have been apparent otherwise, but it also demonstrated that an exploratory investigation in search of a problem can lead to extraordinary results.
The investigative approach of The Supply Chain Sleuth™ resulted in the creation of best-in-class global processes that benefitted not only the company but also motivated and developed the employees while delivering substantial increases in customer satisfaction.
Sources
[1] Gil, D., Joshi, A., Jung, H. M., Stank, F. B., & Tuff, L. G. (2018). Digital supply chains. McKinsey Quarterly, 63(3), 115-123.
[2] Cadio, T. (2020). How to increase inventory turnover. Business2Community.
[3] Joyce, A. (2019). Omnichannel inventory management in a consumer-centric world. InTech.
[4] Greene, P., Marshall, A. P., & Holmstrom, N. (2017). Extreme digitalization. McKinsey Quarterly, 60(4), 175-184.
[5] Global supply chain optimization market 2019-2025: Trends, opportunities, and future scope by segment, scalability, regional outlook, and competitive landscape - ResearchAndMarkets.com. (2019).
[6] Walter, B. (2019). Why continuous improvement is doomed to fail. Forrester.
- The company's operations were inconsistent across different facilities, resulting in varying performance in delivery, quality, costs, profits, inventory turnover, cash flow, and return on investment.
- To improve this situation, a "Global Process Excellence" initiative was launched, aiming to collaborate on best practices and deploy optimized processes across all global operations.
- The initiative addressed various processes, such as order fulfillment and inventory turnover, yielding significant productivity improvements within six months.
- The financing and implementation of the initiative directly influenced the company's overall financial health, competitiveness, and employee development.
