I spoke at two major Logistics and Supply Chain Conferences about a major business transformation project I was involved in. It’s time to take a hard look at the successes, challenges and failures.
The object of the project was to reach a World Class level for Sales and Operations in the company through the Oliver Wight method. According to Wikipedia S&OP planning was developed by Oliver Wight in the 1980’s. So they know their stuff. 5% of companies worldwide attain this ranking including 3M, L’Oreal and Caterpillar.
The project had 9 teams focusing on aspects of S&OP including Planning, Forecasting, Purchasing, Master Data, IT (SAP), continuous improvement training …etc.
We followed the Oliver Wight Class A checklist for business excellence and we were routinely audited on this 32 point checklist until we reached a World Class Level of execution.
Here are the major lessons learned.
The communication of this project was crystal clear from the onset by the executives, President and CEO. The employees clearly understood that this was one of the most important projects in the history of the company. The expectations were clear. These communications were not laughed off by the employees as another gimmick.
Out of 1300 employees, 1000 went through S&OP training. The training was not staring at some screen while an expert blabbed away and bored us. The training consisted of developing a mini S&OP and we actually executed the plan and each person was given a task in a team.
We concentrated on executing and developing sound business fundamentals by revamping and standardizing key business processes, RACI charts (responsibility matrix) training …etc. If you can’t describe your job or process clearly on paper how will you execute it day to day when the heat is on?
Our employees not our executives were audited on how well we executed our business processes. Executives can be masters at spinning things in a positive light. Employees being audited on their performance and knowledge tend to be more honest, open and provide fact based feedback (hopefully). To reach a world class level your discussions and feedback must be brutally honest, but also helpful and consensual in the end.
I used simple reporting tools to report on the 80+ IT projects. I reported weekly on the status of the IT projects to the project committee using a simple excel sheet and color coded each project status green, yellow or red. Seeing those colors made it perfectly clear on the status of each project and people did NOT want to be RED. This is the same system Google uses. Again, honest, frequent and sometimes brutal feedback always wins over hiding problems until they bite you in the ass and you fail.
My status reports to the committee demanded skin from them as well. I did not only report on how we were going to meet deadlines. I was also asking that the committee make key decisions on project scope, bottlenecks we encountered and to drop a project entirely (if it did not add real value). This had to be a team effort and collaboration between business and IT. We all need to talk one truth and speak from facts not “assumptions.” Assumptions kill projects.
I had to enlist experts to develop complex IT tools when needed. I helped configure the SAP system to perform capacity simulations and provide a 5 year detailed plan on all future capacity AND purchasing requirements. I had 80 % of the solution but required outside expertise to help finalise the solution. Don’t let your ego assume you can do it all. Get the expertise to help long before the project deadline.
We over complicated solutions and also failed at times. Becoming world class at something can make people dream up incredibly complex and beautiful solutions. Often a solution can be so simple you miss it entirely. Occasionally the executives brought in “experts” (or the executive dreamed up a solution) that forced us to develop complex programs that took forever, or failed entirely. And all along the SAP system had the reports available. We were so busy on multiple projects we forgot to look under our noses for the simple solution.
It’s the people and their decisions that will make a project hell. If the owner or president of a company makes a decision to force products in a pipeline and the entire S&OP plan is blown or the supply chain is drastically affected, sometimes you just have to grin and bear it. Life is not always fair. You hope that executive decisions get better with time and come from a more collaborative nature. I once told an executive committee that I could develop a golden SAP system but if the owner kept ramming new products inside lead time, the SAP system did not have a “resolve chaos button“.
In summary you can see that success means clear communication, inspiration, perseverance, one truth, honest and open feedback, facts not fiction, and collaboration for key decisions. And these are lessons for day to day activities not just projects.
Terry Vermeylen brings 30+ years of experience in SAP and Supply Chain Process improvement. As an SAP professional he has worked and consulted for some of the world’s largest and most successful Aerospace and Pharmaceutical companies.