All Posts Tagged With: "supply chain management"
Item 6.2 in the Baldrige Criteria asks key questions about how you design, manage, and improve your key work processes. The following processes, best practices, and problem areas look at critical issues in this part of the Baldrige model.
Your organization needs processes for:
- Designing efficient and effective work processes to meet all key requirements, including incorporating new technology, organizational knowledge, product excellence, and the need for agility
- Determining and meeting key process requirements
- Managing your supply chain including evaluating supplier performance
- Improve processes to achieve better performance, reduce variability, and improve products and services
Best practices to consider:
- Process thinking is a cultural attribute of the organization.
- Every key process and its key requirements has been identified, the processes have been mapped, in-process and end-of-process measures have been identified, and data from these measures are analyzed and used to continuously improve the processes.
- Supply chain management involves suppliers in improving quality and cycle time.
Common problem areas:
- When problems occur, people look at who to blame rather than where a process failed.
- The organization has never tried to identify its key processes or determine their requirements.
- No systematic approaches are in place to manage and improve key processes.
- Few in-process measures are taken and few end-of-process measures are used to improve performance.
- Suppliers are not treated as partners to assist in reaching your organization’s goals and objectives.
To read …Steve George | 0 comments | Continued
In the first article in this series, I described two of the seven characteristics of organizations with sound management systems: (1) they think process and (2) they act on data. By winning the Baldrige Award, organizations demonstrate the effectiveness of their management systems through world-class results, a sampling of which you will find in the links at the end of this article.
Here, then, are the next three characteristics of these role-model organizations:
3. They know where they’re going. Yeah, I know, you’ve got a vision and a mission. Do you measure progress on them? Great companies know that what they’re doing today takes them further along the path to what they wish to become, and they don’t know it intuitively, they know it measurably. Today’s actions meet objectives that support strategies that realize the vision.
This interlinked structure is the product of careful research, thoughtful analyses, and ambitious goals. Dozens of people—sometimes hundreds of people—participate in the process of discovering what their company is, where it must go, how it can get there, and what will obstruct its progress. They repeat this process annually. When they’re done, they know individually and collectively where they are going. Even better, they know what they must do—individually and collectively, today and tomorrow—to get there.
4. They align activities. At most companies, if you strapped every employee into a harness and told them …Steve George | 0 comments | Continued
Treat others as you would like to be treated. That may be the Golden Rule in Sunday School but it’s rarely passed the lips of a business executive. Too often, the business world is one of cutthroat competition, doing anything to get an edge, being obsessive about your secrets, and winning while others are losing.
Zappos takes a different approach. The online shoe company has grown from startup to $1 billion in annual gross merchandise sales in ten years. It’s doing something right. I’ve written about Zappos before in “Zappos and a Sustainable Culture,” which looked at how Zappos developed a culture that gives it a competitive advantage, and its amazing return policy in “Do You Trust Your Customers?” It turns out the company takes a fresh approach to supply chain management, too.
In “A Lesson from Zappos: Follow the Golden Rule,” Tony Hsieh, who was hired when the company started to lead its merchandising team and is now its CEO, talks about Zappos decision to create alliances with its vendors in which “partners aligned themselves to the same vision and committed to accountability, knowing we’d all benefit from achieving our goals.” (HBR, June 4, 2010) Zappos acted on this decision with processes that are open and collaborative, including:
- Returning vendor calls the same day and responding to vendor email within a few hours.
- Greeting vendors to its Las Vegas
In “Kaiser Permanent Launches Health Care Industry’s First Sustainability Scorecard,” by Ariel Schwartz (May 4, 2010), Fast Company shows us the scorecard’s SKU-level questions that suppliers must answer:
- NICU product?
- PICU product?
- Lead, Mercury, Hexavalent chromium, Polybrominated biphenyls, Polyborminated diphenyl ether, <1,000ppm or Cadmium <100ppm
- Polyvinyl Chloride (PVC)-free?
- Diethylhexyl phthalate (DEHP)-free?
- California Prop 65 Chemical <threshold or warning level
- Product – Contain more than 10% post-consumer recycled content?
- Primary Packaging – Contain more than 5% post-consumer recycled content?
- Secondary packaging – Contain more than 30% post-consumer recycled content?
- Product – Designed for multi-use (i.e., not a single-use device)?
- Manufacturer’s product code for environmentally preferable alternative
The desired answer for questions 3 through 11 is “yes.”
Kaiser Permanente claims that, if all things are equal between competing suppliers, the scorecard will be the deciding factor.
The article provides an example, courtesy of Robert Gotto, executive director in Kaiser’s Procurement & Supply group:
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“One contract we went through last year was for a rigid endoscope provider. We evaluated the four major players and found that clinical performance and pricing were comparable, but there were big differences in terms of sustainability performance. One supplier had the foresight to develop a camera that doesn’t need to be sterilized with chemicals. It uses steam instead, and we can cut down chemicals in operating rooms by half.” The supplier was awarded a five-year, $100 million
Urban Outfitters had to change the way it managed suppliers: Growing 20% a year caused rapid expansion of its vendor base to more than 1,500 suppliers. In response, it is moving from a less-than-systematic approach in which buyers were responsible for discussing violations with vendors to a Product Lifecycle Management system that provides information for vendor scorecards.
In “Urban Outfitters Moves to Vendor Scorecards” (Journal of Trading Partner Practices, June 2009), John Walsh writes, “For years, retailers have relied solely on compliance and deduction policies to manage their suppliers and encourage them to meet their supply chain requirements. However, scorecards offer a more proactive means of measuring supplier performance and enable retailers to closely align themselves with vendors who achieve the highest grades.”
Vendor scorecards also alter the role of a company’s buyers. Rather than spending most of their time enforcing compliance and conveying routing requirements, buyers can now focus on improving supply chain performance. “The need for quick turn and greater efficiencies makes it critical that Urban is communicating with our vendors and, more importantly, making sure they fully understand our requirements,” said Jay Hallett, vendor relations and compliance manager at Urban Outfitters.
In the Organizational Profile, the Baldrige Criteria ask who your key suppliers are and how you communicate and manage relationships with them, what role they play in your innovation processes, and what your key supply chain …Steve George | 0 comments | Continued