Project Audits: The Secret Weapon for Successful Project Management

As projects become more complex and diverse, it becomes increasingly important to conduct project audits. A project audit is an independent review of the project’s performance, progress, and adherence to the plan. The audit is conducted by a third party or internal audit team to ensure the project is on track and meeting its objectives. In this blog, we will discuss the importance of project audits and provide a comprehensive guide to conducting a project audit.

The purpose of the project audit is not to skim through superficial observations but to dive deeper into the processes, checks & controls, people motivation & skills, data management, compliances, cost accounting etc. The objective is to nip the problem in the bud before it starts manifesting in failures of quality, schedule compliance or cost overrun. So audits are not tick in the box but a tool for steering the project in the right direction and taking timely action for course correction.

Importance of Project Audit

A project audit serves several purposes, including:

1. Identifying problems early: Project audits identify potential issues early on in the project’s lifecycle, allowing for timely correction and minimizing the impact on the project’s success.
2. Ensuring adherence to plan: Audits help ensure that the project team is following the project plan and the project objectives are being met.
3. Improving project management processes: Project audits provide insights into project management processes, allowing for improvements to be made in future projects.
4. Enhancing stakeholder confidence: A successful project audit can improve stakeholder confidence in the project team’s ability to deliver the project successfully.
5. Mitigating Project Risks: Each project audit is an opportunity for reviewing the risks and identifying new risks. The audits test the effectiveness and relevance of risk mitigation plan as well as putting in place additional interventions that may be required.

Steps to Conducting a Project Audit

Step 1: Define the Audit Objectives

The first step in conducting a project audit is to define the audit objectives. This involves identifying the project’s scope, objectives, and deliverables. The audit objectives should be specific, measurable, achievable, relevant, and time-bound (SMART).

Step 2: Select the Audit Team

The audit team should be selected based on their knowledge and experience in project management. The team should include individuals who are not involved in the project to ensure objectivity.

Step 3: Review the Project Documentation

The audit team should review all project documentation, including the project plan, risk management plan, communication plan, and change management plan. The team should also review project reports, status updates, and any other relevant documents.

Step 4: Put together a comprehensive Audit Checklist

The output of the first 3 steps culminates into the audit checklist that ensures all the key aspects of the project deliverables, risks, checks & controls are adequately covered. The audit questions should be structured to dig deeper to help discover the underlying root causes.

Step 5: Observe & Conduct Interviews

The audit team should observe the operations critically for any violations and conduct interviews with key stakeholders, including the project manager, team members, and project sponsors. The interviews should focus on the project’s progress, challenges, and risks.

Step 6: Analyze the Findings

The audit team should analyze the findings from the documentation review and interviews. The analysis should identify any discrepancies between the project plan and actual performance. The team should also identify any areas for improvement in project management processes.

Step 7: Prepare the Audit Report

The audit team should prepare a comprehensive report detailing the findings of the audit. The report should include an executive summary, detailed findings, and recommendations for improvement. The report should be presented to the project manager and stakeholders for review.

How Frequently the Project Audit should be done?

The frequency of project audits can vary depending on the project’s size, complexity, and risk. Generally, project audits should be conducted at key project milestones, such as at the end of each phase or at the project’s completion.

For long-term projects, it may be beneficial to conduct regular interim audits to identify any potential issues and make necessary corrections. The frequency of interim audits can be determined based on the project’s size, complexity, and level of risk.

It’s important to note that project audits should not be seen as a one-time event, but rather as an ongoing process to ensure the project is on track and meeting its objectives. Regular audits help to ensure that the project is being managed effectively and efficiently throughout its entire lifecycle.

Role of Technology in Project Audit

Technology plays a significant role in project audit and can have a major impact on the efficiency and effectiveness of the audit process. Here are some ways in which technology is used in project audit:

• Data Collection and Analysis: Technology can be used to collect and analyze project data, making it easier to identify patterns and trends in project performance. This can include data from project management software, financial systems, and other sources.
• Automated Reporting: With the help of technology, project audit reports can be generated automatically, saving time and effort. This can include dashboards, graphs, and other visualizations that make it easier to understand the data and insights.
• Collaborative Tools: Technology allows project audit teams to collaborate effectively, regardless of their location. This can include online communication and collaboration tools, such as video conferencing, shared project management software, and document management systems.
• Risk Management: Technology can help project audit teams to identify and manage risks more effectively. This can include tools for risk assessment, risk mitigation planning, and monitoring of risk factors.
• Artificial Intelligence: With the help of AI, project audit teams can analyze large amounts of data and identify patterns that may be difficult for humans to spot. This can help to identify areas of concern and improve the accuracy of the audit process.
• Mobile Technology: With the use of mobile devices and apps, project audit teams can work more efficiently and effectively, regardless of their location. This can include mobile project management software, communication apps, and other tools.

Conclusion

In conclusion, project audits are essential to ensuring project success. They provide valuable insights into project management processes and identify potential issues early on in the project’s lifecycle. By following the steps outlined in this blog, project managers can conduct a successful project audit and improve their project management practices. Remember, a successful project audit can improve stakeholder confidence in the project team’s ability to deliver the project successfully, which can have a significant impact on the project’s overall success.

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The Dos and Don’ts of Email Negotiations

Email has become one of the most popular forms of communication in today’s digital age. Whether negotiating a business deal or settling a dispute, it is important to understand the dos and don’ts of email negotiations. This blog post will discuss some best practices for negotiating via email and some common mistakes to avoid.

The Dos of Email Negotiations

1. Do keep it concise and to the point: Email negotiations should be kept brief and to the point. Start by clearly stating your objective and the outcome you want to achieve. Avoid long-winded explanations and stick to the facts.
2. Do be respectful and professional: It is important to maintain a professional tone in your email negotiations. Avoid using offensive language, making personal attacks, or using sarcasm. Be polite, respectful, and professional at all times.
3. Do use clear and precise language: Use clear and precise language when communicating your message. Avoid using jargon or overly technical terms that may be confusing to the other party. If necessary, explain any technical terms in simple language.
4. Do set deadlines: Clearly state deadlines for responses or actions to be taken. This will help keep the negotiation on track and prevent unnecessary delays.
5. Do confirm agreements in writing: Once an agreement has been reached, confirm it in writing via email. This will help avoid misunderstandings and serve as a record of the agreement.

The Don’ts of Email Negotiations

1. Don’t negotiate over email alone: Email negotiations should not be the only form of communication. Follow up with a phone call or in-person meeting to discuss any complex issues or to ensure that the other party has fully understood your message.
2. Don’t use email to avoid confrontation: Email should not be used to avoid face-to-face confrontation or to hide behind a computer screen. It is important to address any issues directly and honestly.
3. Don’t send angry or emotional emails: Avoid sending emails when you are angry or emotional. This can lead to regrettable actions or words that can damage the negotiation process. Take a step back and compose yourself before responding.
4. Don’t share confidential information: Do not share confidential information over email. Use a secure platform or a non-electronic means of communication to protect sensitive information.
5. Don’t forget to proofread: Always proofread your email before sending it. Spelling mistakes, typos, or grammatical errors can reflect poorly on your professionalism and attention to detail.

Conclusion

Email negotiations can be a convenient and effective way to negotiate. However, it is important to follow certain best practices to ensure that the negotiation process is successful. Remember to keep your emails concise, professional, and respectful. Set clear deadlines and confirm agreements in writing. Avoid using email as the only form of communication and do not send angry or emotional emails. By following these dos and don’ts, you can ensure a successful negotiation process and achieve your desired outcome

5 Barriers to Effective Negotiation

Negotiation is an essential skill in both our personal and professional lives. Whether you are negotiating a salary, a business deal, or trying to resolve a conflict, the ability to effectively negotiate is critical to achieving your goals. However, negotiation can be a complex and challenging process, with many potential roadblocks along the way. In this blog post, we will explore some of the top negotiation challenges and provide strategies for overcoming them.

1. Communication barriers

Effective communication is the cornerstone of successful negotiation. However, communication barriers can make it difficult for negotiators to understand each other’s perspectives and needs. These barriers can be caused by differences in culture, language, or personal biases.

To overcome communication barriers, it is important to establish clear lines of communication from the outset. This means taking the time to understand the other party’s communication style and preferences, as well as being clear about your own. Additionally, active listening is crucial to effective communication in negotiation. Listen carefully to what the other party is saying and ask clarifying questions to ensure that you understand their position.

2. Power imbalances

Negotiations often involve a power struggle, where one party has more power than the other. This can occur due to differences in resources, status, or expertise. When there is a significant power imbalance, the stronger party may try to dominate the negotiation, leaving the weaker party feeling marginalized and frustrated.

To overcome power imbalances, it is important to recognize them and address them openly. If you are the weaker party, try to level the playing field by emphasizing your strengths and finding areas of common ground. If you are the stronger party, be aware of your power and use it responsibly. Be open to compromise and avoid using intimidation tactics that can damage the relationship.

3. Information asymmetry

Negotiators may have different levels of information about the negotiation, which can create an imbalance in power and lead to unfair outcomes. For example, one party may have more knowledge about the market, pricing, or legal issues than the other, which can give them an advantage in the negotiation.

To overcome information asymmetry, it is important to do your homework. Research the other party and the issues at stake in the negotiation. If possible, gather information from multiple sources to get a well-rounded understanding of the situation. Additionally, be transparent about your own information and be willing to share it with the other party. This can build trust and lead to a more collaborative negotiation process.

4. Time constraints

Negotiations often have time constraints, which can create pressure and stress for both parties. When there is a deadline or a sense of urgency, negotiators may feel compelled to make quick decisions without fully considering all of their options. This can lead to suboptimal outcomes, where one or both parties feel dissatisfied with the agreement.

To overcome time constraints, it is important to prioritize your goals and stay focused on the issues that matter most. Avoid getting bogged down in minor details and focus on finding creative solutions that meet the needs of both parties. Additionally, be clear about your own timeline and expectations for the negotiation. This can help to ensure that both parties are on the same page and can work together to reach a timely resolution.

5. Emotional dynamics

Negotiation can be an emotionally charged process, where negotiators may feel frustrated, angry, or anxious. Emotions can interfere with the negotiation process, leading to irrational decisions or impasses. Additionally, negotiators may use emotions as a tactic to gain an advantage over the other party, creating a tense and unproductive negotiation environment.

To overcome emotional dynamics, it is important to remain calm and composed throughout the negotiation. Focus on the issues at stake and avoid getting drawn into personal attacks or emotional outbursts. Additionally, be aware of your own emotions and how they may be impacting the negotiation.

In conclusion, negotiation is a complex process that requires careful consideration of a variety of factors. Communication barriers, power imbalances, information asymmetry, time constraints, and emotional dynamics are just a few of the challenges that negotiators may face. However, by recognizing these challenges and developing strategies for overcoming them, negotiators can increase their chances of success. Effective communication, active listening, transparency, prioritization, and emotional intelligence are all key skills for successful negotiation. By honing these skills and remaining focused on the issues at stake, negotiators can achieve their goals and build strong, lasting relationships with the other party.

7 Tips for Persuasive Negotiations

Negotiation is an integral part of our lives. Whether it’s trying to convince your partner on a dinner date or closing a multimillion-dollar business deal, persuasion is the key. To be persuasive in negotiations, one must have a certain set of skills that can be honed over time. In this blog, we will discuss five tips for persuasive negotiation skills that you can use to improve your negotiation game.

Tip 1: Know your audience

The first and foremost step towards persuasive negotiation is understanding your audience. You cannot expect to persuade someone if you do not know their values, beliefs, and priorities. Take the time to research your audience beforehand and learn about their interests and concerns. This knowledge will help you tailor your argument to their needs and make them feel heard and understood. For example, if you are negotiating a raise with your boss, knowing their business goals and expectations can help you frame your argument around how your contribution can help the company achieve its objectives.

Tip 2: Listen actively

The art of listening is often overlooked in negotiations. Many people make the mistake of thinking that persuasion is all about talking and convincing the other person. However, active listening can be just as powerful. When you actively listen, you show the other person that you value their opinions and perspectives. This can help build rapport and trust, which can make it easier to persuade them later on. Additionally, active listening can help you understand their needs and concerns better, which can help you frame your argument in a way that resonates with them.

Tip 3: Build rapport

Building rapport is another essential element of persuasive negotiation. People are more likely to be persuaded by someone they like and trust. Therefore, it is crucial to building a rapport with your audience before you start persuading them. This can be achieved by finding common ground, sharing personal stories, and showing empathy toward their situation. For example, if you are negotiating with a potential client, you can build rapport by discussing their hobbies or interests outside of work.

Tip 4: Ask Open-ended Questions

Open-ended questions are questions that cannot be answered with a simple yes or no. Instead, they require the other person to provide more detailed information and explanations. Asking open-ended questions can help you understand the other person’s needs and concerns better, which can help you frame your argument more effectively. For example, instead of asking, “Do you like our product?” you could ask, “What do you think are the strengths and weaknesses of our product?”

Tip 5: Frame your argument effectively

Framing your argument is a critical aspect of persuasive negotiation. You need to present your argument in a way that resonates with your audience and addresses their needs and concerns. To do this effectively, you need to focus on the benefits of your argument rather than just the features. For example, if you are negotiating a salary increase, instead of just highlighting your skills and experience, you need to focus on how your skills and experience can benefit the company and contribute to its growth. Additionally, you should frame your argument in a way that appeals to your audience’s emotions. People are more likely to be persuaded by an argument that evokes an emotional response.

Tip 6: Offer alternatives

People like options and alternatives, as it provides them with a sense of freedom to choose. Offering alternatives is another powerful tool in persuasive negotiation. When you offer alternatives, you show that you are flexible and willing to work with the other person to find a mutually beneficial solution. This can make the other person more receptive to your argument and more likely to agree with you. Additionally, offering alternatives can help you find a middle ground that works for both parties. For example, if you are negotiating a contract with a vendor, offering multiple pricing options can help you find a price point that works for both parties.

Tip 7: Stay calm under pressure

Negotiation can be a high-stress situation, especially if the stakes are high. However, it is essential to stay calm and composed under pressure. Losing your cool can make you appear irrational or unprofessional, which can harm your chances of persuading the other person. Therefore, it is important to practice stress-management techniques such as deep breathing, meditation, or visualization to stay calm and focused during negotiations. Additionally, taking breaks or rescheduling negotiations can also help reduce stress and improve your negotiating skills. Remember, staying calm and composed can help you think clearly and make rational decisions, which can increase your chances of success in negotiations.

In conclusion, persuasive negotiation is an essential skill that can be learned and honed over time. To be persuasive in negotiations, you need to understand your audience, actively listen, build rapport, frame your argument effectively, and offer alternatives. By following these tips, you can increase your chances of persuading others and achieving your negotiation goals. Remember, persuasion is not about winning or losing, but rather finding a mutually beneficial solution that works for everyone involved.

Catch’em Young – Attracting Generation Z to Supply Chain

A Quick Flashback!

Supply Chain field has a serious talent shortage problem – right from the driver to the middle management levels. About 20-25 years back, when Supply Chain field was recognized as an important function in an organization, many people from sales, manufacturing, transportation, warehousing, procurement  moved into this field. It opened new avenue for the people to grow their career as well as provided them the opportunity to do something different and exciting. These people belonged to “baby boomers” category, who have retired by now or Generation X that is nearing retirement age.  Over last 20 years, the industry has not been able to build the talent pipeline commensurate with the growth. This is because people who got into supply chain were so busy finding a ground for themselves, that the talent development was never a focus area.  Today only 1 out 6 supply chain people are professionally qualified for the job they do.

Despite all the buzz created by companies and media, the image and attractiveness of supply chain function remained below what was expected.  If you go to an undergraduate or post graduate classroom in a college and ask people to raise hands for different career options, you will find least number of hands raised for the supply chain! I do this exercise, whenever I get an opportunity to interact with students. The supply chain education and jobs have been perceived as dull, boring, devoid of creativity and excitement. It has been positioned as more operational in nature than strategic. In most of the colleges, supply chain is being taught as part of “Operations Management”. It’s no surprise that supply chain is not a career of choice for many.

How to attract Generation Z to Supply Chain Career

In order to answer the question, we must understand how does this generation thinks, acts and what it expects.

1. Gen Z has grown with technology & social media around them, therefore, they look for technology solution to their problems and their life revolves around apps. If your organization is a laggard in adopting technology, there is little possibility of attracting this talent. Secondly, the technology has to be device agnostic so that they could use their own devices at work.  The user interface of the technology needs to imbibe bite-sized, quick response habits similar to Instagram, Twitter, Snapchat etc. to engage this generation.
2. Gen Z decides much early in life about the career directions, whether it’s music, blogging, mass media, beauty, ethical hacking – there are no rules for what is good or bad. The access to information at an early age plays a major role in shaping their decisions. So it’s important to capture their imagination at the K-12 level. APICS came out with school level Supply Chain STEM educational outreach program to demonstrate the importance of supply chain management and the promising career paths available to them. It involves fun games and activities while learning about supply chain management. Other industrial bodies and trade associations need to take a leaf out of APICS book to launch similar initiatives at the school and college levels. Gen X and Y should proactively reach out to colleges, engage the students through talks, competitions, internships and projects.
3. Gen Z is money motivated, willing to work hard, looks for financial security but they also equally care for the purpose in life and what they do (from a survey conducted by Monster). Most of them have seen the great recession and possibly their parents or kin losing jobs. They are more practical, entrepreneurial and willing to experiment. The supply chain community needs to change the operational image of supply chain to one that has the potential to transform the business. Advanchainge has tied up with Inchainge BV to conduct supply chain challenge in India, using experiential learning simulation – The Fresh Connection. The heart of the simulation is to turnaround the business by making strategic and tactical decision in supply chain management. It’s currently being done for corporate but we are trying hard to convince many colleges (hope we will succeed one day)!
4. Gen Z hates to take directions from anyone, be it parents or teachers. However, in many supply chain organizations, the management style is tilted towards authoritative. While that’s understood, given the operational nature of some of the execution activities, it could be detrimental in attracting the talent. Gen Z  prefers participative management style and higher degree of delegation. Micro management is a big turn-off for this group. Therefore, companies would need to create more meaningful roles, involve this group in decision making and create more vibrant work environment.
5. Gen Z would look for faster career advancements and not follow the beaten down paths for growth. They will want individual career parts and capitalize on the experiences by lateral movements in roles. However, in many supply chain organizations, it is sill not very common for people to move between the logistics, procurement, planning, manufacturing or customer service roles.  Therefore, the organizations will need to focus on end to end supply chain competencies development to enable flexible career paths. It won’t be easy to make this group sit in dull and boring training programs conducted in classroom set-up. They would like to learn on demand – whenever and wherever. The training will have to give way to online, short bite-sized learning capsules, delivered in an interesting manner, using gaming and interactivity.

The war for supply chain talent will not be easy. The organizations, that take proactive approach in adopting these measures, will be able to attract and retain talent better than others. Big names and brands are no longer the passport for attracting the best talent.

 

Collaborate 2 Win

Collaboration is a buzzword used across organizations but very few have mastered the art of institutionalizing collaborative behavior. Collaboration, in simple words, is creating something as a group that would not be possible working individually.

One of the premise of the integrated supply chain management concept was to foster collaboration within the business as well as with the external partners. The extent to which this objective has been achieved, varies from company to company. Merely creating an integrated supply chain function does not guarantee collaborative approach. That is why, in many cases, SCM function has itself become a silo within the organization. Not just that, it continues to nurture silos within itself in the form of logistics, demand planning, FG inventory management, supply management and so on.

In one such example, a supply planner, who was involved in planning huge quantities of promotion product, did not communicate the plan to the downstream supply chain.  Thus, the warehouses were taken by surprise and did not have enough resources and space to handle the product.  The end outcome was a delay in the launch of promotion and dilution of its effectiveness.

Sales and Operations Planning Process is another initiative intended to encourage collaborative behavior but that too has met with limited success.  The root cause of the problem lies beyond the realms of organization structure, processes, IT tools etc.

How does a leader get to know that collaboration is not working at the workplace? Here are few indicators:

• People would ask for more resources & buffers e.g. inventory, people, budgets etc.
• People would come back with problems or the reasons why certain goals could not be met
• The amount of effort being put in by people is not commensurate with the outcomes
• In the group meetings, people would not voice concerns or speak in muted voice
• There is either too much tension or too much bonhomie between people

Key Ingredients of Collaborative Culture

Shared Vision

People need a purpose for collaboration. It has been found that people, in general, tend to collaborate more in the situations of crisis e.g. war, natural calamities or crisis within a company. The crisis creates a strong and common purpose for people to give up their individual gains for a collective cause.

One of the ways to create a strong purpose is to develop shared vision and goals for the organization. This shared vision should override all other goals and objectives either at individual or functional level. To know if your team members have a shared vision, you can do a small exercise. In one of the group meetings, ask each team member to write down the shared vision and you would be surprised to see variety of responses.  Every individual in the organization should have clear line of sight to these few shared and Wildly Important Goals. The shared ownership reduces the functional or territorial attitude.

Build Trust

One of the reasons why people do not share knowledge, expertise or experience is lack of trust on each other. The fear of misuse of the shared information or credit taken for personal benefit destroys the trust. In one case, the production manager of a company informed supply planner about machine breakdown resulting in production shortfall. Instead of collaborating with the production to re-prioritize and reschedule production, he used the information to blame the production manager. One such instance is good enough to destroy the trust and create barriers for collaboration.

Trust requires building relationships and networks. Getting to know people, beyond their roles and positions, goes a long way in building trust. When the relationship becomes informal and personal, the chances of collaboration enhance. Company focused on collaboration enable these relationships by providing common and informal places for relaxation, breakouts, coffee corners etc. People get to know what other people do, understand each other’s pain points, develop empathy – something that you wouldn’t get to know through official job descriptions. The informal relationships create trusts which in turn makes collaboration smoother.

 

Shift focus from Boxes to Linkages

Traditionally, the powers were vested in the boxes that represent positions in an organization structure. As the companies become more complex and networked, the power shifts from the boxes to linkages or interplay between the boxes. What it means that no single position in the structure can deliver the desired results. The performance is a function of the effectiveness of interplay.

For example, the product obsolescence is an outcome of the interplay between Sales, Demand Planner, Supply Planner and Production decisions. Therefore, all of them should share the accountability and KPI of obsolescence.

Decision making may require moving along the linkages iteratively. The focus should not be on who makes what decisions but on how decisions are made i.e. whether all the links impacting the decisions have been evaluated. The moment focus shifts to the links, people have no option but to collaborate.

Empower People

People who are not empowered do not tend to collaborate as they do not have the authority to share information and take actions. Leaders must delegate authority and provide enough space to their team members to go beyond their assigned duties and collaborate to solve common problems. They must be allowed and encouraged to choose their battles, be part of cross-functional teams, seek help or provide help to others and take initiatives. While allocating responsibilities, 20% to 30% of time should be provided for working on cross-functional initiatives. It would not only strengthen the bonding but also contribute towards people development.

Community of Practice

In early 2000, P&G was facing tough challenges in terms of productivity and innovation success rate.   The new CEO of the company AG Lafley used collaboration – internal as well as external, as a lever to fight both the challenges. He established 20 cross-functional “communities of practice” within P&G. These collaboration initiatives paid off handsomely. By 2008, P&G had improved its R&D productivity by nearly 60 percent, more than doubled its innovation success rate, and lowered its cost of innovation.

Community of Practice is an informal group that meet at a certain periodicity to share knowledge, experience and help each other solve pressing problems. To know more about how various companies are benefitting from COPs, read here.

Remove the Buffers / Comfort zones

Excessive buffers, resources and comfort zones lead to poor collaborative behavior and vice versa. The moment buffers and comforts are taken away, people have no options but to share resources, information and expertise.  For example, if the supply chain and sales function do not collaborate, it would lead to higher inventory, obsolescence and lower customer service levels. The buffers and excessive flab must be challenged every time to make people reach out to their counterparts for the support. Creating an environment of sharing resources and information to achieve personal or functional objectives helps in fostering reciprocity and collaboration.

Rhythm of formal reviews

Establishing a rhythm of structured cross-functional reviews to plan and execute, fosters collaboration in the organization. For example, an Indian Cement company follows “war room” process to review the sales orders, production, stocks and make certain key decisions on daily basis. These reviews are attended by Sales, Logistics, Plant managers across the organization. A beverages company has a formal Sales and Operations Execution (S&Oe) meeting on a weekly basis that is attended by top management of the company during peak season.

S&OP (or Integrated Business Planning) is another avenue to facilitate collaboration between all the functions of an organization. However, in many companies it has failed to engage the stakeholders and been diluted to merely a supply chain driven process. The problem lies in the way the process has been positioned, implemented and sold to the stakeholders. In order to get past the dead end in S&OP, read here 

In these reviews, people arrive at the common action plan, hold each other accountable for the actions assigned and follow through the plan.

 Constructive Challenging and Consensus

It may sound an oxymoron to use Challenge and Consensus together but are essentially two sides of the same coin. Constructive challenging is important for capturing diverse views and deliberation. However, at the end, the group needs to arrive at a consensus after weighing pros and cons of each choice.

The Sales and Operation Planning process requires both constructive challenging and consensus. However, at times people tend to focus too much on arriving at the consensus because either they lack ammunition to challenge or they are not completely engaged. This could send a false signal that people are collaborating. For example, demand planning review meeting requires challenging the assumptions used for putting together the demand plan. The product manager and demand planner, who are part of the forum, must evaluate and challenge the assumptions before arriving at the consensus plan. It could also mean encouraging uncomfortable discussions to thrash out every possible aspect of decision making.

Collaborative behavior is a habit that needs to cultivated over a period through both formal and informal means. The leaders need to demonstrate the behavior and be role models. However, it has been found that the biggest gap in the collaborative behavior prevails at the senior level in the companies. They, unknowingly, could send conflicting messages to their team members e.g.

“why are you messing up with someone else’s work?”

“focus on your job, you are not paid for social service”

“don’t get into it else you would be held equally accountable”

In the current world of complexity and uncertainty, Collaboration is not an option but a necessity to win in the market place. If you are keen to know, how we could help you to bring about this change in your organization, please click her or write to contact@advanchainge.com.

Supply Chain Systems Thinking – A Case based Webinar

What you may expect in this Webinar?

• Case of a fruit juices company (The Fresh Connection) facing huge challenges –  Unhappy customers, financial losses, high obsolescence etc.
• Analysis of end to end supply chain, financial statement, reports and key performance indicators
• Collectively make strategic and tactical Supply Chain decisions for the company
• Analyze the impact of the decisions on the performance of the company
• Learn about importance of systems thinking in Supply Chain decision making

Watch this video for the preliminary view of the Case Problem 

Systems Thinking is a holistic approach to decision making that looks at problems not as isolated challenges but rather as part of the larger system in which a particular function or process operates. 

See the video below on the importance of Systems Thinking in Supply Chain

About Fresh Connection Simulation

Preparing for GST – Are you missing something?

One nation, one tax and one market, GST is staring in our faces. The supply chain folks are busy solving the puzzle of IGST/CGST/SGST and doing maths on the various costs in the upstream & downstream value chain. Most companies have already prepared a blueprint of the supply and distribution network that would require fewer but larger distribution center facilities. It would translate into expansion of the existing warehouses, closing some of the existing ones and opening warehouses in new locations. Some of the questions that are on top of everyone’s mind are:

1. How to manage services levels from fewer facilities that would result in increased distances and response times to customers? Would 3PLs and transport companies pitch in to create an efficient network with hub and spoke model to fill in the gap?
2. Given the fact that warehousing facilities will become larger, there would be a business case for automation of facilities. Can companies move from dedicated contract warehouses to shared facilities to create economy of scale?  Would 3PLs invest in the automation without passing on the cost impact?
3. How to handle increase in rentals and other costs at the locations that appear in almost every company’s blueprint?

However, amidst these priorities, something very important is being missed out that may hit companies at a later stage. And, this missing piece is developing competency of people engaged in managing and handling logistics operations. Currently, most logistics professionals handle small manual facilities and deal with small time local operators. A typical scene in a warehouse would be labor all over the warehouse, trucks parked in haphazard manner and supervisors shouting at the top of their voices to control everyone.

Now imagine the new scenario, for example, managing a 200,000 square feet facility with multiple zones, with reach-trucks or order-pickers or other sophisticated equipment, dispatching thousands of orders every day. These facilities would require robust process discipline that is independent of the memory and experience of the individuals running the show. Any small error or mistake can quickly snowball into a bigger problem. One can compare the operations in these facilities like that of factories. The logistics professionals will need to develop the competencies of managing people, equipment, throughput, safety and cost efficiency, similar to that of factory managers & supervisors.

The logistics service users would now have to deal with larger and professional service providers. The ability to develop & nurture long term relationships, getting appropriate commercial agreements and managing performance would be the key deliverable. Apart from these skills, the logistics practitioners would need to develop competencies on network optimization, warehouse layout design, transport route optimization, fleet mix optimization and technology interventions to continuously improve the efficiency and reliability of the supply chain.

The period of transition from the existing to new footprint could be very painful and severely impact the business unless the logistics team are well prepared to handle this situation. The skills that would be required to ride over this turbulent phase would be effective planning, program and change management.

The competencies that would be required in the post GST scenario, can be classified as below:

Do you have a plan to assess and address these gaps in your logistics teams? If not, you may add this to the list of priorities that may need to be addressed sooner than later. Competency building takes time and requires sustained efforts. If you need external help in this initiative, you may reach out to us at contact@advanchainge.com 

We follow a proven approach of sustained engagement and develop interventions that have all the components of 70/20/10 model of competency development. We break down the entire initiative into small bursts or modules. Each module starts with classroom training followed by assignment of on the job projects with measurable deliverable and coaching & mentoring of learners to deliver results. Only when the desired objectives of a module are achieved, the next module is taken up.  This approach ensures that the competencies developed are sustainable and both individuals and organizations benefit from the initiative.

Supply Chain Execution Edge

Strategy is sexy, execution is sweat and blood. The great strategy and execution divide has been a topic of discussion and one of the greatest challenges for the CEOs. While great strategy is an outcome of great leadership and thinking, ability to execute is a part of DNA of an organization. It is a usual practice to formulate long term plans and strategies at the beginning of year. However, the accountability of implementation of the strategies is left to every department and very little thinking happens on what it would take to execute the strategies.

As per a survey conducted by The Economist Intelligence Unit in 2013, less than half (46%) of the respondents felt that their businesses were excellent or good at executing strategic initiatives. On an average 56% of the strategic initiatives were implemented across all the respondents over past 3 years. Only 33% of the respondents fed back the lessons from the failed strategy execution into new strategy formulation.

“Execution is a strategy in our business”, says Paul Polman, CEO Unilever. Unilever realized that their customer service was at best average and therefore, declared it as a priority for the business. The appropriate organization structure was put in place along with reward and measurement. Then followed the rigorous following through and holding people accountable. Now, Everyday Great Execution (EDGE) is the mantra of Unilever organization’s culture and processes. Successful leaders understand that the team meetings, town-hall meetings or investments in technology do not guarantee the successful execution of a strategy. It largely depends on how well each employee identifies with the strategy and how well-oiled is the execution machinery of the organization.

Let us now examine the importance of execution capability in supply chain. In the current times, the businesses do not necessarily compete on products and technology. For example, Samsung would know about the new technologies and products Apple is working on and vice versa. The real competition is about who has the better supply chain execution capability to get the products on the shelf quicker while ensuring the product quality. Supply Chain is about 10% strategy and 90% execution capability. Supply chain people, in any company, are the busiest lot but are they really spending their energies on the right initiatives. Most of the time they are fighting day to day fires or trying to get alignment between conflicting interests of different departments. What is missing?

1. Communication and Alignment

The companies have very well established processes for Annual Planning, Sales & Operations Planning and scheduling. In most cases, the people responsible for executing the plans e.g. delivery, procurement, production etc. get to see only the detailed level schedules and have little idea about the big picture. For them, every SKU or material is equally important and requires same level of attention. They cannot identify with the business critical Winning Goals & Winning Moves and how their decisions and actions would impact the success. For example, if meeting a deadline of an important customer order is the key winning move for the business then every part of supply chain should focus on meeting the most important objective. It requires supply chain leaders and managers to align their teams and communicate the key winning moves of the month, quarter or the year on a regular basis.

2. Appropriate Lead Measures

We hear and read a lot about Balanced Scorecards and many organizations swear by their system of measurements. What most companies measure are the success measures e.g. revenue growth, profitability, working capital, customer service and so on. These measures are true reflection of the success of the company but are not helpful in understanding the gaps in performance. For example, customer service is a success measure for supply chain performance but the person responsible for order fulfillment needs to know much more than just one figure e.g. stock availability, inventory accuracy, order processing time etc., before being able to pinpoint where the gaps are and what needs to change. These lead measures are the levers available in the hands of people directly responsible for execution. Every part of supply chain should concentrate on the their set of aligned lead measures to steer the business towards winning goals.

3. Use Performance Gaps for Structural Improvements

Generally, supply chain teams analyze their KPIs on a monthly basis and try to address the performance gaps. However, most of  it happens at a very superficial level without getting into the depth of the root cause and addressing a process or system instead of addressing just one specific problem. As a result the gaps and issues creep back after some time.

While there could be multiple issues needing attention, every supply chain team should be working on 3-4 important initiatives on strengthening their ability to execute winning goals in a very structured and sustained manner until the capability has been ingrained into the process, culture and behavior. The teams should be able to distinguish between day to day whirlwinds that take away their focus and the winds that sail their boats in the direction of the winning goals.

4. Accountability and Commitment

When companies are small, team members contribute to the success of the company regardless of department divisions. But as companies grow, team members become singularly focused on getting their jobs done rather than focusing on how their jobs help to score the winning goals. Mistakes are blamed on other departments or people leading to silos. It happens when companies focus only at the success measures and no one is held accountable for the leading measures.

Every lead measure should be assigned to a team or individual who commits and held accountable for reporting, analyzing and improving the measure. It should be clearly communicated who takes what steps and corrective actions, should there be any gaps in the performance. The commitments made by the team or individuals should be reviewed on weekly / monthly basis to bring in sense of ownership.

5. Discipline

Finally, discipline plays a very critical role in execution and is the first casualty whenever there are “whirlwinds” of unforeseen events. People tend to take short cuts and short term decisions not realizing the impact of their decisions on the other parts of supply chain and business.

The discipline is about following the rhythm of the planning and execution processes while ensuring the alignment with the rest of the supply chain and business. It is like an orchestra in which every musician is expected to follow the discipline of playing the assigned piece and stay in rhythm with the rest of the crew.

Supply Chain Execution Excellence requires putting together all the above pieces as a well-oiled machine that continuously moves the performance needle in line with the key business strategy.

We can help your supply chain organization to develop this capability using a well tested and structured Supply Chain Execution Excellence framework. Click here for more details or contact us.

Insights from Gartner’s Top 25 Supply Chain 2016

Gartner has come out with Top 25 Supply Chains for 2016. One of the significant change in this year’s rating is introduction of CSR as one of the scoring criteria.

There are companies that have managed to hold their positions, few have joined the bandwagon for the first time and some have moved up & down the ranking noticeably. See here the list of Top 25 Supply Chains 2016.

The key highlights of the changes in the ranking are:

• Both Apple and P&G continue to hold their position as the Masters, having attained top 5 position for 7 out of 10 years. Apple’s revenue has come under pressure lately, however, they continue to perform strongly on other parameters.
• Unilever upsets Amazon to score the top position. A major contributor to this change is the zero CSR score for Amazon (??) and perfect score of 10 to Unilever. Amazon continues to be in top 5 due to its leadership in innovation in products and supply chain.
•  H&M overtakes Inditex (Zara) on account of higher Return on Assets and Revenue Growth.
• Walmart drops by 3 ranks due to a low score of 3 on CSR and reduced Revenue Growth.
• Nestle has jumped up by 7 rankings. The world’s largest consumer food supply chain scored a perfect 10 out of 10 for CSR, including a 99 out of 100 in the environmental dimension of the Dow Jones Sustainability Index for its use of “zero-water” factories and conversion of biowaste into renewable energy.
• France-based L’Oréal, the world’s largest cosmetics company, ranks at No. 19, up three slots from last year. Its supply chain has focused on improving demand forecasting and supply and demand matching capabilities. The results have been impressive, as it has been able to improve service levels by more than 2%, while holding inventory constant.
• New entrants – Schneider, HP, BASF, BMW and GSK

What these companies are doing differently to earn their position in top 25? Gartner has highlighted 3 trends of the leading companies:

1. Customer Driven Partner Integration
2. Advanced Analytics
3. CSR and Sustainability

Let’s see few examples of the initiatives taken up by the companies occupying top 15 positions, summarized from the Gartner’s report.

Customer Driven Partner Integration:

• Apple continues to succeed by offering platforms that ecosystems of partners build upon to meet customers’ needs, whether that relates to core product features such as access through touch-based security, media content and applications or third-party accessories that convert its products into smart diagnostic devices or payment terminals.
• McDonald’s corporate supply chain team excels at orchestrating the upstream supply network. It promotes and acts as the conduit between outsourced vendors, suppliers, corporate stores and franchise partners. It uses council meetings to collaborate with suppliers on new product innovation and technology, as well as on plant safety.
• Intel’s supply chain group has proven to be a worthy partner for growth in the past. Over the course of 2014, the team enabled an entirely new ecosystem of China-based technology providers to support the ramp up of new tablet products.
• Cisco has leveraged technology along with process improvement is in supplier collaboration. The team deployed a cloud-based partnering platform with suppliers that serves as a single source of truth for data, eliminating the bullwhip effect between Cisco, contract manufacturers and suppliers. There is full demand visibility, and suppliers can address shortages through alerts in a more automated way.
• Nike’s supply chain has extended visibility to outsourced factory production and compliance, as well as to how stores are executing on merchandising, inventory and operations plans.

Advanced Analytics:

• P&G’s supply chain team is using advanced techniques to drive elimination of truck residence time at mixing centers. The company has also embedded sensors in some of its products, such as toothbrushes and air fresheners. The data transmitted from these products aids the company in understanding consumer usage patterns to support replenishment of supplies for existing products and design features for future offerings.
• Unilever has made significant investments in regional operational centers that support all facets of the customer order-to-cash process. This work is yielding cost savings through economies of scale and common processes, as well as the ability to better support customer needs by applying analytics to a common CRM system.
• H&M operates its supply chains tailored by product type, with 80% of volume built to plan at standard, cost-efficient lead times and the remaining 20% that is agile and can respond to fashion trends by going from design to hanger in as little as 20 days, using digital technology.
• Inditex has set up a planning and analytics team that sorts through real-time sales trends to inform future design and production. Another team converts voice of the customer feedback gathered from the store and district network into prescriptive advice for the design teams.
• Cisco, as part digitizing the logistics function is connecting logistics to the broader supply chain with data, standards, automated event management and machine agents. Cisco is also bringing new technologies to bear in its warehouses, including augmented reality, telematics and video analytics.
• Samsung’s supply chain team continues to focus on improving customer collaboration and gaining insight into consumer behaviors through connected devices.
• Nestlé is investing in predictive analytics for demand planning and enabling growth in its e-commerce business, which includes packaging tailored more for delivery than display in a store.
• Colgate-Palmolive team has partnered with its enterprise software provider to co-develop supply chain control tower capabilities, including better demand sensing, inventory optimization and supply network planning. The pilot implementation of this capability has enabled daily responsiveness and reduced inventory levels, while minimizing out of stock impacts.
• PepsiCo’s supply chain is partnering with commercial teams to deploy a total portfolio optimization governance process and tool that allows for data-driven assessment of portfolio health, detailed analysis relative to evaluation criteria and targets, and a process for final portfolio decisions. Pilots of the new portfolio optimization platform are yielding double-digit percentage improvements in profit per volume measures.

CSR:

• Apple has improved the degree of transparency into its extended supply chain in recent years. In the area of conflict minerals, its 2015 Supplier Responsibility Progress Report states that all of its 242 smelters and refiners of tin, tantalum, tungsten and gold are subject to third-party audits to ensure they are not funding violence in the Democratic Republic of Congo (DRC).
• Unilever says that it is achieving zero waste through its “four R approach” — reducing, reusing, recovering or recycling — and treating waste as a resource with alternate uses, such as converting factory waste to building materials or composting food waste from staff cafeterias. Longer term, it aspires to be “carbon-positive” by 2030.
• Intel is the largest U.S. purchaser of renewable energy certificates and when combined with in-house sources, gets 100% of the 3.1 billion kilowatt-hours of electricity its operations consumes annually from green sources.
• H&M was part of a recent coalition of top clothing companies that called on governments to agree to a strong climate change deal based on concerns that long-term climate effects could harm production of one if its major inputs, cotton.
• Inditex has set a goal to run 100% eco-efficient stores by 2020. The new Zara flagship store in Manhattan tracks sustainability measures across all of its processes and will consume 30% less energy and 50% less water compared to a conventional store.
• Cisco is leveraging in-house Internet of Everything (IoE) technology to improve product quality, gain energy efficiency in operations and reach universal order visibility.
• Samsung has recently received two awards for sustainability from the U.S. Environmental Protection Agency (EPA) for its use of sustainable materials in the Samsung Galaxy S6 and its long-term commitment to the proper disposal and recycling of e-waste in the United States.
• Coca Cola has set out ambitious sustainability goals for 2020 that include improving water and emissions efficiency by more than 20%, empowering five million women across its value chain and several programs to improve nutritional content and reporting.

While the scoring criteria and weightage given are open to debate, but key takeaway is the breakthrough innovations the leading companies are focusing on to stay ahead of the curve.