Supply Chain Management:
From Vision to Implementation
Chapter 14: People Management: Bridge or
Barrier to SCM
Chapter 14: Learning Objectives
1. Describe the characteristics of a SC manager.
2. Describe the vital role people play as a
bridge or barrier to SC collaboration.
3. Explain how to cultivate a culture of
empowerment. Discuss the ABCs of
empowerment.
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Chapter 14: Learning Objectives
4. Explain the importance of investing in
employee capabilities through training,
especially in the areas of cross training and
teaming.
5. Discuss why developing and integrating
human and technological resources is critical
to developing world-class processes.
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People Management
We know how to invest in technology and
machinery, but we’re at a loss when it comes to
investing in people.
–Peter Senge
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The Supply Chain Manager
What are the characteristics
of the person in the middle?
What skills and mindset does a true supply
chain manager need?
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The Supply Chain Manager
 True supply chain managers are defined by
mindset and skill set.
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Strong functional skills
Holistic thinker
Analyzes trade-offs rigorously
Builds collaborative relationships
Executes with discipline
Exemplifies leadership
Embraces change
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The Most Valuable Asset?
If you leave us our money, our buildings, and our
brands, but take away our people, the Company
will fail. But if you take away our money, our
buildings, and our brands, but leave us our
people, we will rebuild the whole thing in a
decade.
- Richard R. Deupree, CEO Procter & Gamble, 1947
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Great Management Lies
1. Employees are our most valuable asset
2. I have an open-door policy
3. You could earn more money under the new plan
4. We're reorganizing to better serve our customers
5. The future is bright
6. We reward risk takers
7. Performance will be rewarded
8. We don't shoot the messenger
9. Training is a high priority
10. I haven't heard any rumors
11. We'll review your performance in six months
12. Our people are the best
13. Your input is important to us
- Scott Adams8
Investing in Employee Capabilities
Education…must reach everyone and it will have to go
all through life. If you stop, you become obsolete, you
cease to be competitive.
The obsolescence curve has compressed, Bud Lalonde
estimates the amount of investment that must be made
in acquiring new skills to avoid obsolescence.
 10 % to avoid obsolescence in five years – 1990
 20% to avoid obsolescence in three years – 2000
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P&G Leadership Development Attributes
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John Deere and SC Education
 Deere offers over 50 courses to Deere
employees and employees at first and second
tier suppliers.
 In addition to upgrading skill sets, these
professional development classes bring
managers together in a learning environment
where they can build relationships.
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Deere & Company Training Courses
Advanced EDI
Finance for the Non-Financial Manager
Advanced Product Quality Planning
Group Problem Solving
Apples and Oranges
Interviewing Techniques
Application of ABC Data
Introduction to ISO/QS 9000
Benchmarking
Inventory Management
Business Report Writing
ISO/QS-9000 Internal Auditor/Team Training
Cash Flow Analysis
ISO/QS-9000 Quality System Documentation
Cell Manufacturing
Job Instruction Workshop
Compensation Strategies and Incentives for CI
Leadership Skills
Conflict Resolution: Team Operating Skills
Mistake Proofing
Continuous Process Improvement
Presentation Skills
Continuous Process Improvement (Advanced)
Preventive Maintenance for Cycle Time Reduction
Continuous Quality Improvement
Preventing Discrimination and Sexual Harassment
Cost/Price Analysis
Process Mapping
Creative Focus
Project Management
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Deere & Company Training Courses
Customer Service—A Strategy for the Future
Root Cause Analysis
Customer Service II
Setup Reduction
Cycle Time Reduction
Teaching Techniques
Decision Focus
Team Effectiveness
Design of Experiments
Team Effectiveness II
Developing Communication for Increased
Collaboration
Team Focus
Developing Employees
Team Problem Solving
Developing High Performance Teams
Time Management
Effective Facilitation
Win-Win Negotiations
Effective Job Skills
Working in a Changing Environment
Facilitator Skills
World Class Manufacturing
Failure Mode & Effects Analysis
Writing Skills
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Management Training
In addition to problem solving and role specific training,
managers should receive training in the following:
 Overview of the organization focusing on its history,
culture, and objectives.
 Review of customers, their needs, wants, and success
factors.
 Analysis of key suppliers, including their competencies
and capacities.
 Exercises in communication, teamwork, and paradigm
shifts.
 Specific instruction regarding the firm’s performance
measurement and reward system.
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Training Program Problems
 Management training is a large investment by
a company.
 Managers often change employment after only 3
to 5 years.
 Job rotation and manager trainee programs
delay time between hire and permanent job
placement.
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Cross-Training
 Cross functional workers emerged with Lean
manufacturing principles.
 Toyota, the inventor of Lean, seeks to develop
world-class process capabilities based on
development and integration of people and
technology.
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Cross-Training - Lessons from Toyota
1. Requires heavy investment in problem solving skills.
2. Requires broad job descriptions.
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At NUMMI, the number of job descriptions was reduced
from 200 to 3.
3. Requires management to empower employees with the
authority and responsibility necessary to make real
decisions that make an impact.
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Jidoka – man and machine system; the authority to stop the
production system when problems are identified.
4. Requires management to develop collegial relations
with the workforce.
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Cross-Experienced Management Team
 Goal is to provide managers an understanding of
roles and challenges inherent in diverse value
added activities throughout the company.
 Many companies have developed multi-year
manager trainee programs that include job
rotation, providing trainees with extended
experience within various functional areas.
 Helps to build relationships, reducing barriers to
cross-functional cooperation.
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Job Rotation Programs
 Develops an appreciation for the needs and wants of
customers
 Become familiar with products and value-added process
 Gain perspective of different functional areas and how
the functional areas work or don't work together
 Learn the "language" spoken in each area
 Establish relationships, improving future decision
making, reducing barriers to collaborative initiatives
 Develop appreciation for workers that make the product
or interface with customers
 Gain understanding of the role outside suppliers play in
product development, production, and distribution
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Job Rotation Programs
 Job rotation can continue after initial hiring.
 Communicates that the company is serious about
systems thinking and teamwork.
 Improves cross-functional communication.
 Can be accomplished with assignment to
cross-functional task forces and project teams.
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Types of Teams
Type of Team
Team Objectives
Advisory Councils
Senior-level steering committees, customer advisory boards, and supplier
councils - provide feedback, expedite communication, and garner commitment
for key initiatives.
Capital Equipment
Design and acquire needed equipment. Several tasks must be performed to
meet key objectives: 1) determine specifications, 2) select a supplier,
3) conduct negotiations, and 4) install and maintain equipment.
Commodity
Develop the expertise and relationships needed to establish a strategy for
managing the acquisition of important commodities over time. They also
investigate and select one or more sources for a given material or service.
Cost Reduction
Take many forms and consist of many different players. Sourced inputs
represent 50-80 percent of the cost of good sold suggesting that considerable
effort be targeted at improving both supplier relations and supplier processes.
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Types of Teams
Type of Team
Team Objectives
Customer
Relationship
Work to build relationships and understand specific customer needs as well as
to respond to customer inquiries and resolve customer problems. These teams
increasingly work to design tailored services for the most important customers.
Cycle-time
Reduction
Responsible for reducing time at key processes. The increased use of
collaborative planning, forecasting, and replenishment and vendor-managed
replenishment has made inclusion of outside representatives valuable.
Information Systems
Determine information needs of the firm and design the information systems to
provide this information. Information system specialists run the team but they
need the input from the areas where information is either collected or used.
Inventory Control
Seek to reduce inventory levels while providing an uninterrupted flow of
materials. Sourcing, Operations, and Marketing work to develop dock-to-stock,
lean-materials, and coordinated promotions/replenishment systems
Problem Solving
Numerous ad hoc teams or task forces are used to solve specific problems,
drive the adoption of new technologies, or implement a strategic initiative.
These teams are almost always dissolved upon completion of the specific task.
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Types of Teams
Type of Team
Team Objectives
Product
Development
Reduce time needed to bring a product from concept to market. Consist of
representatives from Marketing, Production, Purchasing, Engineering, and
Quality as well as representatives form both customers and suppliers.
Quality
Improvement
Work to improve the quality of products and processes. Members come from
Production, Purchasing, Quality Assurance, and Engineering as well as
supplier and customer representatives to assure accurate quality definition.
Supplier
Development
Help suppliers upgrade process engineering, manufacturing, and quality
capabilities. These teams consist of representatives from selected suppliers as
well as from Production, sourcing, Quality Assurance, and Engineering.
Value Analysis
Study a product or process and all of its components to determine how to lower
cost or improve quality. These teams often include representatives from
Engineering, Marketing, Operations, and Purchasing.
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Advantages and Disadvantages of Teams
Advantages of Teams
 Decision Ownership
 Leveraged Diversity
 Faster Task Completion
 Better Organizational
Understanding
Disadvantages of Teams
 The Never-ending
Debate
 Groupthink
 Social Loafing
 Peer Pressure
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Factors Impacting Team Dynamics
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Availability of Resources
Clarity of Team Objectives
Commitment of Members to the
Team
Complexity of Team
Assignment/Task
Executive Management Support
Functional/Technical Skills of
Team Members
Open and Honest Team
Communication
Organizational Experience with
Teams
Overall Organizational Support
for Team Success
Performance Feedback and
Information Support
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Measures Used for Team and
Team Members
Supplier Involvement
Team Autonomy/Mandate
Team Cohesiveness
Team Leadership
Team Longevity
Team Member Personalities
Team Process Skills of Team
Members
Team Reward Structure
Team Size
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Team Design Process
 Identify a well-defined goal that can be clearly
articulated and communicated.
 Identify the variety of expertise and experience
required to accomplish teams goals.
 Define time commitment required.
 Identify people with the right knowledge, experience,
and complementary working styles.
 Determine whether individuals can be freed from
current tasks and whether their participation will add
more value to the firm than those tasks.
 Identify a skilled leader.
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Working Styles
 The Quick Starter - highly energetic, sees an
opportunity and quickly mobilizes energy.
 The Fact Finder - very meticulous and oriented
toward detail and analysis.
 The Follow Through - determined and focused
on carrying out a task to its completion.
 The Implementer - very task oriented, with a
particular penchant for hands on work.
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Requirements for Team Building
 Common Goal - Successful teams possess a
common goal
 Leadership – Successful teams are led by wellrespected managers who understand team
dynamics
 Communication - Open, constructive
communication is fundamental to team success
 Cooperation - Effective teams sometimes require
compromise
 Specific Roles - Team members understand their
role and responsibilities
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Requirements for Team Building
 Measurement - Clear and precise performance
measures facilitate success
 Individual Responsibility - Each member
accountable for individual and team performance
 Resources - Adequate resources/information is
available
 Time - Chemistry emerges as team members
spend quality time working together
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Team Development Process
1. Forming - determines team membership.
2. Storming - establishes direction, purpose, roles, responsibilities,
and rewards for both the overall team and each team member.
3. Norming - establishes team rules and procedures, helping teams
to synchronize their activities.
4. Performing – identification of problems and opportunities,
establishing a plan of attack, and then implementing the plan. A
well-designed, well-trained team often finds that performing is
the easiest part of the team process.
5. Adjourning - up-front definition of key milestones and a specific
ending point in terms of outputs and a target completion date.
Once a team completes its designated task, it should disband.
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Team Measurement
 Measurement drives behavior
 Teams require the correct balance between team
based measures and individual measures.
 Emphasizing team outcomes can lead to social
loafing and a loss of individual motivation.
 Emphasizing individual outcomes can undermine
team performance.
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Establishing an Empowerment Culture
 An empowerment culture precedes the
creation of knowledge workers and the
learning organization.
 Knowledge workers recognize opportunities,
analyze problems, and proactively move to
find creative solutions.
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Pathway to Empowerment
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Leadership - The 7 Rights
1.
2.
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4.
5.
6.
7.
Get the right people
Communicate the right expectations
Provide the right training
Measure the right things
Reward the right behavior
Support with the right resources
Give them the right opportunity (i.e., get out
of the way).
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Goal Setting
 Aggressive and systematic goal setting drives
out complacency, helping to sustain momentum
of an empowered workforce.
 Failure cannot be punished, it must be used as a
learning experience.
 Managers must work with employees to
facilitate goal attainment.
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Communication and Teamwork
 Managers must communicate expectations,
corrections, and praise.
 Managers must recognize team members for
their contributions toward overall success.
 Recognition and empowerment increased
motivation and commitment.
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ABCs of Empowerment
 Affirmation – positive reinforcement to the
workforce making them feel truly valued.
 Belonging – employees must feel a sense of
community and commitment.
 Competence – the company must invest in
employee capabilities throughout the
organization.
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Employee-Oriented Companies
 Services for employees—e.g., a gym & health-related
programs
 Benefits & salaries suggest company cares about employees
 Company asks for employees opinions & input for decisions
 Treat each person as an individual
 Employees understand their position & are knowledgeable
 Company continuously trains & updates skills of employees
 Employees are happy doing their job
 Allowing employees to advance & grow in the organization
 Open communications between employees & immediate boss
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Employee-Oriented Companies
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Meetings are more like town hall discussions
Management is openly willing to receive feedback
Trains employees beyond job requirements
Company is generous with benefits
Fair level of pay—competitive level
Provides services to employees that are not job related
Work space is clean, user friendly
Employees use updated equipment
Well run human resource department—easy access to
services
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Employee Satisfaction Factors
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Employee Satisfaction Factors
Characteristic
Employee Perceptions of Characteristic
Compensation
Hallmark of a great company to work for. Workers want to be treated fairly and
they regard a company’s financial package as the acid test of fairness. Great
companies have learned to combine salary, bonuses, stock options, insurance
programs, and the company retirement plan into a comprehensive package that
communicates a concern for their employees’ well being.
Family Friendly
Need to make work fit within a holistic lifestyle. The goal is to balance work
with personal and family needs. Companies are responding with an assortment
of services and benefits including family counseling, savings bonds for children,
college tuition grants, parental leaves, time off to attend parent-teacher
conferences, and lactation rooms for new mothers.
Facilities
Well-designed work place that is safe and aesthetically pleasing. Convenience
of on-site child care, on-site medical care, or on-site concierge services. Some
companies offer massages, dry cleaning, travel services, and pet care.
Employees also value access to exercise programs and fitness facilities.
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Employee Satisfaction Factors
Characteristic
Employee Perceptions of Characteristic
Accommodating
Workplace
Flexibility is an important perk. Opportunity to schedule their own hours,
shorter workweeks, telecommuting, and flexible-time programs all allow
workers to balance work and family obligations. Paid vacations and
opportunities to take time off without pay also provide for personal renewal.
Great companies recognize the need to avoid burn out and provide workers
opportunities for revitalization.
Enabling Culture
Desire to work for an ethical company. Employees feel it is important to work
for a company that promotes diversity, is environmentally sensitive, and is
involved in the community. Paid time for charity or volunteer work is
particularly attractive.
ManagerEmployee Relations
Managers who know their employees and acknowledge their accomplishments
and concerns are a key source of corporate enthusiasm. Promotes open
communication and facilitates a sense of collegiality. Employees want to know
that their ideas are valued, seek empowerment, and want to be trusted.
Invest in Employee Employees recognize a need to stay current with the latest developments in their
Skills
fields of expertise. Company-sponsored education programs, skills-based
training, and tuition reimbursement programs are beneficial.
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Integrating People and Technology
 Organization’s needs must be matched with
technology. As a general rule, the simplest
technology that will meet product and process
needs should be given priority.
 Organization’s technology strategy should
support long-term approach to building worldclass value-added processes.
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Integrating People and Technology
 Adequate support must be in place to implement
and support new technologies.
 The following technology pitfalls should be
avoided:
 The “follow-the-leader” mentality
 The “shiny-hardware” syndrome
 The “island of automation”
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Integrating People and Technology
 Workforce must be viewed as a critical resource and the
necessary capital for training programs must be committed. Once
a firm invests in workers, it must give them the responsibility and
opportunity to use their increasing skills.
 Managers must develop familiarity with value-added processes
and key technologies. Appreciation and understanding of the
abilities of line workers and managers in other disciplines is
needed to coordinate and integrate competitive efforts.
 Appropriate performance measures that do not penalize workers
and that promote “revolutionary” enhancement should be
adopted.
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A Return to the Opening Story
Based on what you have now read and discussed:
1. How did Doug and his team get so caught up in SCM
that they forgot to get everyone involved? What are
the dangers of having the task force do it all? Can
SCM thrive if it doesn’t become part of the culture?
2. What should a supply-chain training program look
like? Who should be involved? How much training is
needed and for how long?
3. What is a culture of empowerment? What does it look
like? How should Doug go about cultivating it?
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