Transforming Supply Chains: The Art of the Possible

Every supply chain transformation journey is unique: That’s why we always start with asking the right questions and developing a thorough understanding of what each Profit Point client needs. once we’re there, deep in the weeds of a complex challenge – well, we’re kind of in our happy place, driven by the belief that supply chains can always be improved, and there are no impossibilities. 

Spinning Out of Control

As the world began emerging from the worst of the COVID-19 pandemic, we had a client which – like so many businesses – was faced with a huge amount of supply chain disruptions: Raw materials, resource capacity, and manpower were all at a premium and the client was essentially in an unsustainable sold-out situation. They’d had a very profitable operation going, and suddenly they couldn’t meet their day-to-day obligations to their customers, and they were starting to lose business because of it. They needed to take action.

Among their employees was a leader who saw value in bringing in some expertise to help them understand the opportunities for progress. Having experienced similar chaos earlier in his career, he now saw there was something he could do about it, and he wanted to provide stability for his organization and really drive it forward.

His confidence was key in earning great support from their upper management. We also worked with the supply chain and operations teams and the commercial directors to get their support to implement the vision as well. There was a lot of pain inside and outside of their organization, and we needed to work with all of these teams to develop a path forward to address it all. This was something they just couldn’t tackle amidst the chaos of simply trying to fill orders day to day. They needed to take a step back, and that was probably the most important thing we were able to help them do.

The What and the How

First, we assessed the situation: We went and talked to the stakeholders to find out where all the pain points were, and what we needed to do. We didn’t implement new tools – this was about understanding the work process and getting everyone marching to the same beat and recognizing what their collective priorities were.

Then, we put measurements in place. We didn’t just want to say we were going to do something: We wanted to ask, “What are our improvement capabilities and how do we quantify our goals?” 

So we looked, for instance, at the backlog of orders – when we started with this client, they were sold out for the next four or five months – and we helped them  slowly improve the on-time delivery. On the backlog orders, we worked on making better commitments to the customers so they weren’t continually rescheduling orders. This process also included getting them to understand that some of their customers were higher priority than others, and we needed to make sure we were running the equipment efficiently in order to maximize capacity. 

One of the keys was really assessing where the trouble spots were and putting metrics in place so we could see when they were doing better, and show upper management the progress. That’s important to the employee experience: We not only want to deliver better outcomes for their customers, we want to make sure the employees’ work environment improves so that they’re not mired in that chaos day in and day out.

Technology Comes Second

We need to emphasize that this was never about a new technology – because they weren’t at a point where it would have benefited them. They really needed to establish and improve their workflow processes first, and to get their people on-board with this effort, so that’s where we focused. Long-term, they planned to implement an Enterprise Resource Planning (ERP) system, but that was at least a year or two out. Fixing their workflow processes first will set them up for a successful ERP implementation and will enable the ERP system design to complement the workflow processes and make them more efficient.

We gave them some simple tools – more basic spreadsheets, some Access tools that they could use as a bridge to the ERP system – but we really zeroed in on the people and the processes. We identified metrics to measure progress and show improvement. Metrics are crucial as you go through a supply chain transformation: You can start off with a game plan, but you need to monitor and evaluate progress so that you can adjust the game plan as necessary to achieve your goals.

We focused on giving them structure and improving their manufacturing. When we started, they were really reactive and not utilizing their capacity effectively – they were doing a lot of break-ins and changeouts, and you can’t get back the time you lose during those. We showed them how to minimize them by doing things like implementing longer production runs to build their inventory, or changing where their bottlenecked resources were. 

That process led to even more discoveries. A couple times, we identified a bottleneck resource that actually shifted over time: First, it was an upstream piece of equipment, and then once we got that tuned up, we found an issue with a bottleneck on a downstream resource that they’d never run into before. So it was key for us to work with the operations organization to maximize the capacity of those resources.

A Continuing Journey

It’s still an ongoing journey, but we got this client to a much better place by giving them some structure to improve their manufacturing, so they worked out of the backlog and were able to improve their customer deliveries.

More than that, though, the client respects the work we did, and what they have now is a road map of both short-term actions and the value they’ll get from those, as well as medium- and long-term actions to work through. That relationship we’ve built, and the transformation we’ve helped empower – that’s the value Profit Point delivers. 

That’s the art of the possible!

About Bruce Shabosky

Bruce has over 30 years of experience in engineering and supply chain in the chemicals industry, implementing and improving supply planning and scheduling processes and systems.

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