In Supply Chain Management, The Little Things Are Everything | CPO INNOVATION

I have been asked to intervene in countless late delivery issues, quality management crises and less-than-lead-time requests. As a team, we have made incredible progress in the most difficult situations. When the unbelievable is accomplished and production continues, I compile my notes and look at the situation as a whole and try to decide how it could have gone better. A very high percentage of the time crisis can be traced back to skipped steps in the process or skipped processes altogether.

Supply chains are so variable and every example I give, can be countered by some other situation, so this article will follow a very generic framework:

In this very simplified framework, everything runs downhill. Failures in any step can mean compounding consequences down the line. It is tempting to blame suppliers or buyers for late deliveries. It is often suppliers or buyers that are the problem, but you cannot draw conclusions before you investigate.

Each supply chain effort can be managed like an individual project. Start with requirements (created from clear goals and objectives), build a project schedule with precedents (doesn’t have to be sophisticated), and manage the process step by step. Everything takes time to account for timing realistically. How often have you asked a supplier team for the real lead time only to ask them to cut that time in half or more? Give the engineer four hours to complete a two-day task? This sort of behavior erodes or even obliterates trust. Even when you are behind schedule you need to establish reasonable expectations. Miracles are not easy and take a lot out of the team. It is important to build your schedule and sign your contracts with real dates in mind. So here come the little things:

– Two weeks from engineering to establish and approve the design and bill of material.

– Two weeks from procurement to get the requirements and drawings to suppliers, receive bids and award with purchase orders.

– Two months for the suppliers to deliver all required material and assemblies.

– Two weeks to build and inspect.

– Ten days shipping.

– Customer asks for a two month turn around instead of the almost four proposed months.

– Cost is challenged by 25%

In order to win business, the manager may be tempted to accept the schedule challenge which is the first little thing I see consistently. From my customer seat, set honest expectations. If the schedule challenge is critical, go back to your team and try to find areas of improvement. Keep in mind, sometimes it is worth to put forth a monumental effort, but not often. Maybe you ask engineering and they can complete the task in one week instead of two. Maybe your longest lead items can be reduced by shuffling supplier priorities or paying an expedite fee. Shipping can certainly go overnight or even door to door. There are ways to improve the schedule, but they involve increased stress and hours of work, not to mention costs. (Notice, I didn’t mention accepting a price challenge, yet.) There is a mental and emotional strain on folks that are constantly asked to work outside procedures to produce extraordinary results.

As a manager, you have control here to manage the customer’s expectations. There are tradeoffs, though. If the customer is important enough you can ask the team to lean in on this one. Communicate the time improvement realistically. If you can shave a month or two out of your schedule, give the real date of delivery and strive to hit that date. Communicate problems early and often. Get help when you need it. Don’t miss your date. Do not communicate a date that you know you cannot meet. Confidence is not easily won back. If the contract is lucrative find a way to reward the people that will be asked to work harder to deliver. (Keep track of the folks that are asked to do more and deliver.) Be intentional about contractual dates you accept and don’t allow a price reduction on an expedite situation (or else don’t complain when you lose money on the deal). There should not be an excuse for late delivery to a contract date outside of acts of God.

Now, the little things. Contract is signed. Execution is the name of the game.

– If two weeks is the promise, the third week is eating into the time to procure.

– Make sure all requirements are addressed and make sense. I have seen tolerances that were standard that after stack with other characteristics drive a part out of specification in production. It is compliant to the drawing, but it doesn’t fit the assembly. Who knew…?

– Don’t be afraid to ask questions.

– Focus on the task at hand and complete it. Multitasking is okay in long meetings but not when something needs to be accomplished (or you are at the park with your kids).

– Leaving out requirements or improperly communicating the schedule will lead to major issues later.

– Be timely and complete in your release. Talk to the supplier during the process.

– Be fair and reasonable in negotiations and price discussions.

– Document appropriately. I have been guilty of improper documentation making contract closeout very difficult and impacting other projects.

– “out for delivery” can be your worst nightmare during the ultimate sale from the largest online retailers. Things get lost. ( have you ever had parts “out for delivery” for more than one day… Me, too!)

– Be prepared for risks in shipping by having tracking available, relationships at the third party, and good communication.

– It is a small part of the process, but it is typically third party controlled. Once we had a part that was shipped ground but needed to be overnighted (3PL at fault). We had a door to door driver intercept the truck in Tennessee, grab the parts off the truck (forklift required) and bring us the parts that night. This was a one-time event that I can tell at supply chain conferences to impress my friends. It is neither cheaper nor very probable. We have never repeated this heroic event.

– The inspector is not happy to send things back, either.

The moral of the story is to know your job and focus on the little things in the procedure. Take the time to weed out bad instructions and improve the process to reduce turn time and improve performance. Communicate realistic expectations. Communicate clear schedules. Communicate, communicate, communicate.

In supply chain, the little things are everything!

Everyone has an extraordinary story of heroic actions to save the day. Let’s celebrate these stories and move on. Heroics are born from failures. There are stressful times that take too much of the team to be business as usual. How can you help your team be more predictable and successful?