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Supply-chain management may be technically simple, but it is usually managerially difficult...!Introduction
The following three guiding principles for the future have been published by The Work Foundation:
1. Command and control hierarchies are no longer working.
2. Competitive advantage now comes from knowledge, relationships, values and networks.
3. The rhetoric on customer service has moved on from supply led to being demand led.
All of these have drastic implications for what is done in the supply-chain; and all of them are centred on, getting the people "right". This article therefore considers briefly this critical aspect.
Business & Relationships
Supply-chain management may be technically simple, but it is usually managerially difficult.
In supply chains there are many technically simple solutions which give better business performance. There are also many "hard" technical systems approaches such as, MRP and SAP, which are most useful and can have a vital impact on efficiency. However to be totally effective, it is usually the things like teamwork, and motivation, which really do demand the closer attention of management. Improving the people relationships is the main key for more effective supply chain management. Do you for example know of any relationship, (business or otherwise), that cannot be improved?
A view that a company is able to do something by itself is a dangerous myth that obscures the reality that a company only ever does anything as a result of its people doing something. Too many people, usually unconsciously, ignore the plain fact that it is the people who are the key element in all companies. Surely, we can only ever do the core of business through dealing with people relationships?
Supply Chain Relationships
Supply Chain Management has as its key principle, individual businesses coming together to integrate, co-ordinate and control, their supplier/customer activities of buying, making, moving and selling. Relationship handling with all the supply-chain players is fundamental to the overall supply chains effectiveness. With people relationships however, how many times is the partnership word used only for "spin" and "public relationship" purposes?
Traditionally, there is often found an adversary them/us tussle in the supplier/customer activities. Power is not distributed evenly; a major barrier to a full partnerships approach. Even however when there is a more partnership approach, (token or otherwise), this can result in the response from some people involved, that the German word for partnership is partnershaft. This is a reflection of the "you will", "I win/you loose" viewpoints that come from this adversary point of view.
However, some supply chains do demonstrate a share to gain approach. Here as a basic philosophy, they will recognise that "none of us, are as strong as all of us" and adopts a "win/win" approach. The use of power by the strongest does not dominate in these supply chains. The message can be a need for change from the old "command and control" towards new ways of managing. This message for supply chain management shows that the following changes in Figure 1 Supply Chain Changes, (a too brief overview), are needed:
Supply Chain Changes:
From more Traditional Ways To more Supply Chain Ways
* Independent of the next link vs. Each link is dependent on the next one
* Links are protective vs. End to end visibility
* Uncertainty in demand visibility vs. More certainty
* Unresponsive to change vs. Quicker response to change
* High cost and low service levels vs. High service with lower costs transactional partnership
* Fragmented internal structures vs. "Joined up" structures of extended enterprises
* Hierarchical management vs. Collaborative management
The core of these changes involves changing the way people respond and relate to each other. It is not only hard technical improvements that are needed and companies who see this as the only way forward are scheduled to face real difficulties and future failure in their expectations. Unless of course they see themselves dominantly powerful, so that "opposition" does not matter.
Developing effective people relationships will beyond doubt, bring benefit. It is the only eventual way forward to achieve better management. Many people certainly do know this, but then, so often, this knowledge of the subjective side in business gets "lost" during the application. Most companies recognise in their strategy, that people are their most effective resource. Indeed, most company annual reports will contain a similar statement. However, as with all strategy, it needs to be turned into meaningful action. It must not get corrupted in the process from strategy formulation to the "the doing" and the action. When this corruption happens, it means that a blockage has occurred. So often, this can then mean a fatal blockage occurs in the ways that people are managed.
Effective relationships fundamentally require a total open and trusting environment, with shared beliefs, values and a common identity and purpose. Mechanisms are needed to allow people the right to "agree to disagree" in a supportive and trusting way. The Supply Chain principle of "sharing to gain", also needs to include differing people's viewpoints with active listening and the encouragement of open debate.
Developing such relationships is certainly not going to be a soft option. Getting to the "inside" is not easy and can be time consuming and personally difficult to those who are "schooled" in old ways adversary and power based models of relationship handling. Indeed this "soft stuff" so often becomes the hard staffespecially for those who prefer a partnershaft view of supply chain management. Maybe however this is actually "saying it like it is" and is a better reflection of what actually is happening? These people will also probably believe that people relationships in the supply chain is just more about "people crap and has no part to play at all", (comments from a former colleague who retired some years ago now).
Win the home games first
Effective relationship building needs to start internally. In my experience, the partnershaft view always reflects poor internal relationships. Here the best "knockers" of a company, and its "worst" ambassadors? are its own employees. Companies must "win the home games first". A business must win on the inside before it can go outside. Why so many companies appear not to realise this is a surprise.
An efficient and relationship mature internal team of purchasing, production, distribution, marketing, finance is often not found. Without this internal alignment, going forward to develop external relationships can be fraught with difficulties. What many internally focussed companies often do not realise is that their internal divisions will certainly be reflected and be visible externally.
External people will be then most rightly uneasy about the effectiveness of any so-called partnership. Where a company sets out as policy to not listen or involve its "partners", internal or external, then clearly the partnership word should not be used. Using it in these circumstances is dis-honest.
The critical thing to be done before developing external supply chain partnership relationships is to "win the home games first" and to engage the hearts and minds of the employed and contracted; individuals, groups and teams, inside the company. There is quite a challenge here, I believe, for most companies, organisations, and for many of the people involved. Having effective relationships is one source of competitive advantage.
The way managers "manage" varies, and can be seen in their personal
management style. We can see below in Figure 2, an "extremes" view, which
gives a broad polarised view of management styles:
Figure 2 - Management Styles
Autocrats are those who:
- drive and push people
- do not lead
- have a "single", "my" viewpoint
- are a one way communicator
- say, "do it my way, now"
Procrastinators are those managers who:
- abdicate from taking decisions
- use group viewpoints
- are indecisive and "dither"
- say, "what do you all want to do, whenever"
Charismatics are those managers who:
- pull more than push
- are two way communicators
- people will follow naturally, as they lead
- say, "I think this, what do we think"
Autocrats are similar to the Captain Mainwaring in Dads Army - "don't question my orders you stupid boy". However, the Procrastinator is more like Sergeant Wilson - "I say chaps, would you mind awfully, in your own time, when you are ready."
A charismatic manager is perhaps the rarest style found. Does this mean, perhaps, we can all too readily recognise the autocrats? Maybe with "command and control," many autocrats are found. However, are the times like this anymore; are autocrats the model that is needed? Maybe they are needed in an emergency, but surely not for, "all time use".
Perception is reality
A problem can however still remain. Simply that in dealing with "managerially difficult people', or by using "partnershaft people management techniques", that too many managers is just too content to gloss over developing longer term effective people relationships. The "macho kick ass manager" is still around and thriving in short term changing and heavily task oriented business; it is all too easy to be one in such type of businesses.
The contrast however, between "old" and "new" managing is distinctive, see figure 3.
Figure 3 - Old and New Managing
"Old" managing represents:
- keeping control
- holding onto people
- being judgmental
- seeing though a "pinhole"
- being directive and more autocratic
- using a "push" approach
- Mechanistic view of people, they are only a resource.
"New" managing, (some call it leading, coaching, or empowering), represents
more of the following:
- letting people try
- given people a "self release"
- being non judgmental
- seeing the wider view
- being supportive and more charismatic
- using a "pull" approach
- Collaborative view of people, they are what bring innovation and improvement.
It is important for a business to have its manager's face up to viewing these differences and to recognising the ensuing problems and opportunities that occur from the application of the different models.
Learning and changing
Now all of this, can be a most difficult type of learning for many, (if not all), managers, but assistance with such learning is readily available and is most effective when handled delicately and professionally. All this soft stuff is really the hard stuff of management. It is not the "technically simple" that causes us major problems in supply chain management, it is that which is more "managerially difficult".
It is also difficult learning because business actually does involve emotions. This is usually found more covertly as; after all, it's not macho and not British for us to show our emotions. The more calculative "bottom line" is, however, usually more overt and visible. However, the "bottom line" is only going to an outcome of all the other activities; these activities involving for example, people showing each other "touchy/feely" mutual respect and trust in their business relationships.
Emotions, feelings, behaviour and thinking are all related. After all, as a person thinks, so they are. Business is, therefore, at its roots, an emotional experience. Trying to pretend people's emotions don't exist in business relationships is dangerous. It ignores the ultimate way forward to develop better and more effective supply chains for all the partners and the players.
The real problem and the opportunity
The real problem here is that management, as a whole group, just does not discuss effective people management. It may well be discussed in small groups but is very rarely discussed consistently and holistically. Perhaps it is assumed everyone already knows all there is to know about it. This is a dangerous, if an understandable, viewpoint to hold. Managers can be too easily become distant from the reality. Additionally, and unfortunately, the "preferred messages," do most often get corrupted or, get lost in the translation from strategy to action. But, it is only, by sharing in a constructive and positive way that these issues will ever get sorted out. The isolationist route just does not work.
The questions companies and individuals therefore need to be asking are:
- Is what has been said true?
- It seems to be common sense, but is it common here?
- Can we benefit from more effective people management?
- What are we going to do about it?
After all, it is not only the newly promoted managers, who need to learn effective ways to manage. All other managers will need at least a refresher and also, involvement within all the management groups, so that they can determine, just how they want, universally, to manage. One this has been done, then they can perhaps better act as a management team - Few unfortunately seem to and are just not "all together". Inconsistency is a common complaint not only from employees, but can also be visible, very destructively, when managers are overheard interacting with their peers and colleagues.
My final words come back to my introduction and rest with The Work Foundation (the former Industrial Society), who in their Executive Summary from their "Working Capital" report, note that the UK need to make important transitions as follows:
1) From hierarchy to networks
Leadership styles must change.
Command and control hierarchies are no longer working.
2) From tangible to intangible assets
Competitive advantage now comes from knowledge, relationships, values and
3) From paternalism to consumerism
The rhetoric on customer service has moved on from supply led to being demand
My hope is that individuals are challenged and encouraged to bring beneficial change, so they can be better managers, improving both business performance and their own personnel fulfillment.
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