Which is Best for my Supply Chain?
Throughout my career in manufacturing, supply chain, and operational excellence (OpEx), one phrase has always guided my thought process: “Continuous Improvement beats postponed perfection.” Stacking incremental improvements on top of each other has proven to be the fastest, surest, and most consistent route to speed, quality improvement, and cost reduction., Leaders and OpEx practitioners sometime interpret this approach as being in competition with the step changes in productivity that come with introducing new technology however. In reality, the pace of technological change demands that organizations quickly adopt new technologies while driving improvement in the processes they support. New technologies are vital tools in a continuous improvement program.
Everyone in business can tell at least one horror story about a new technology integration gone wrong:
- Enterprise Resource Planning (ERP) System Replacements that left companies unable to ship product
- Process automation that severely lengthened lead times
- New Customer Resource Management (CRM) systems that left customers and customer service people frustrated and unable to communicate effectively
In this article, I will focus on a few key fundamentals that will ensure that new technologies are quickly and smoothly integrated into your organization and are viewed as a vital part of the continuous improvement process.
Understand the Value Stream
Before selecting any technological upgrade, organizations must understand their value stream at a very detailed level. The value stream is defined as the set of processes that produce value for the customers – what customers will pay you to do. Everything else is either a process that supports the value stream or waste.
Once identified, the value stream should be optimized for cost, quality, and cycle time. The support processes need to be responsive and flexible and all waste eliminated. Developing this clear understanding of the value stream will guide the design and selection of technology upgrades that fit the organization’s processes and also have the greatest impact on customer satisfaction.
Rigorous Data Management
Most organizations today can produce massive amounts of data on how their company and its processes are performing. Most organizations aren’t willing or aren’t able to organize that data and present it in a way that makes decision-making easy for the people doing the work though.
Coherent data flow into effective dashboards and control towers is critical to understanding and managing the value stream. Every employee at customer contact points, on the operating floor, and in the boardroom deserves to know in real time how they are performing. This will pave the way for effective technology integration, since all will know immediately how the new technology is affecting their performance.
Be Prepared to Address Skills Gaps
Most technology integrations fail to reach their goals because there was not enough attention paid to the human side of the changes. Gaps in the fundamental skills employees need to work well with the new technologies are often overlooked.
- New user interfaces may require new skills in how to use the peripheral tools.
- New data flow may require different communication skills.
- New automation may require new skills in data and equipment maintenance.
Change is hard enough, but when you lack the basic skills to adapt to the change, even the most supportive people get frustrated. Organizations should continuously evaluate the skill level of their employees and make sure they get the necessary training to take advantage of new technologies.
Invest in Effective Change Management
Every technology change should have a detailed change management plan. The plan should include the following:
- An exhaustive communication strategy
- Stakeholder analysis for everyone impacted by the new technology
- A clear understanding of the pros and cons from a 360-degree perspective
- Plans for monitoring how the change is going.
If the technology change is big enough, this may require dedicated people just for change management. However, investing in change management professionals will have a huge return on investment (ROI) from the effective integration of the new technology.
This isn’t everything that is needed to make sure that new technologies are integrated with speed and effectiveness, but attention to these details are the initial keys to getting it right.
About the Author
David Powe is the partner and lead consultant at AIOPX Management Consulting. AIOPX helps businesses increase profits, cash flow and enterprise value through the application of Operations Excellence methodologies. David can be reached at dpowe@aiopx.com or 585-704-6241.