How are you building a learning supply chain organization?
Keep your supply chain from becoming obsolete. #ItstheOrganization…
This question evolved from a conversation with a senior supply chain leader about where AI could improve his operation’s performance. In essence, this person said that his people didn’t know enough to know where to start. It was a pretty candid statement and similar to what I have heard from other supply chain leaders.
Source: Supply Chain in 5 and ChatGPT
The rate of advancement in AI (combined with a lot of hype and bad prognostications) is making it hard for supply chain organizations to discern where to focus. The same could be said about the field of robotics but also applies to supply chain strategies, operating models and just about every other aspect of supply chain management.
This is a problem for supply chain leaders as they tend to put all the emphasis on execution and reward consistent performance. Too often I have seen supply chain leaders and operations locked into a business model and supporting technology from decades past because they weren’t aware of today’s state of the art and what it could do for their performance.
All of this unrecognized advancement is like death by 1,000 cuts. At some point the C-suite recognizes that the existing supply chain strategies and supporting technology have put the company at a cost or worse, competitive disadvantage. It’s also when there is supply chain leadership regime change. This situation is so prevalent in manufacturing, retail and distribution industries that a number of consultancies have practices that address that.
Another point that came from the AI conversation was that no one person could keep up with all of the advancements and applications of the technology. If we consider that AI is just one of a number of important fields that supply chain leaders need to keep current, then there needs to be an organized approach, especially since it is too easy to get caught up in day-to-day supply chain challenges.
In “The One Strategy That Determines if Your Planning Capabilities Could be World Class”, I talked about the need to “centralize” planning to create the critical mass and foster learning and continuous improvement. The same thoughts apply to a learning supply chain organization, but more broadly.
There are five key elements that create a learning organization.
Leadership
Instill continuous improvement/education ethos. The workforce will follow how supply chain leaders act so constantly asking “How can we be better”, “What is our competition doing?”, “Are there practices from other industries that we should consider adopting” and “What technology advances do you see that could help us perform better?”. These are examples that cause the supply chain organization to think beyond their day-to-day job.
Create a playbook. Standardize on a methodology so expectations are clear and learning/innovation is consistent.
Pick one or two focus areas to build learning and then scale. You and your organization are going to re-learn how to learn. Make sure you have a process that works at scale prior to expansion.
Supply chain leaders need to visibly support the effort. Show up to the learning meetings, provide constructive feedback. The old saying “action speaks louder than words” definitely applies here.
Business alignment
Don’t fall into the “solution in search of a problem” trap. I have seen this happen over and over in my four decades in the business. Block chain, the decentralized digital ledger, is a great recent example of this problem. There are plenty of areas for performance improvement – even if you believe you have a top performing supply chain. Start with an internal problem or opportunity or look outside your organization to see how they are using innovation to improve their performance
Always tie business performance to improvement goals. So, what if you implemented the latest flavor of AI to learn about it, if no one can figure out how it made the supply chain run better? This ties to the previous point and is immutable if you want the learning ethos to stick.
Build teams to create critical mass and help ensure continuity. It’s not about engaging a few of your best and brightest. It’s about getting as much of the organization to be involved to leverage their collective learning. Equally important is that this approach helps to ensure that when the best and brightest move on to new roles, there are folks who can continue the effort and educate new participants.
Education
Be willing to invest in education. There should be no expectation that even the best and brightest will have the experience to develop a comprehensive understanding of a complex subject like AI or robotics on their own and certainly not in a short time period. This is also a good proof point for the organization that leadership is committed.
Foster networking. It is more than likely that there are others in the supply chain world doing the things you want to accomplish. Conferences, associations or leveraging social media liked LinkedIn are some of the many ways that supply chain professionals can get access to folks in their situation or “been there, done that” which can accelerate learning and provide valuable lessons learned to help ensure success and avoid failure.
Engage tech and other business partners. From my experience, this is a grossly underutilized resource group. They work with dozens if not hundreds of similar companies and have a wide range of knowledge that can improve supply chain performance. However, they can’t help if you treat them with an “arm’s length” relationship.
Talent development
Task top performing/potential employees to lead the effort. This is an excellent opportunity to reward top talent and push the organization forward. Make sure to rotate these folks to other assignments and that the organization sees it as an important career growth step.
Build into job descriptions and compensation. This is the old “tell me how you are compensated, and I will tell you how you act” story. Whether this is a full-time job or part of an expanded role, it needs to be incorporated to make it stick.
Involve resources from all levels. It’s simply a smart business practice to get the perspectives and knowledge of everyone. For example, I cannot tell you how many times I have seen front line workers explain what problems the new business process and supporting technology will have and could have been avoided with their input in the first place.
Communication
Regular reporting across the supply chain organization. A constant stream of what is happening and in particular the value delivered is a critical step in creating the culture.
Disseminate – lunch and learn, lessons learned. This is a powerful way to educate the overall organization and make the effort more tangible. Learning what works and doesn’t is so important for advancing the capabilities of the organization.
There is a lot here and I probably could have added more. Transforming to a learning organization takes time, but if as supply chain leaders you are trying to create a consistently high performing organization, it’s a must. Creating a learning organization and having programs in place that advance the knowledge of your people are the most powerful recruiting and retention tools according to a Descartes workforce study. Lastly, from leadership perspective it’s a critical element for avoiding self-obsolescence and enabling advancement.