Supply Chain Frontiers issue #15. Read all articles in this issue.
Supply chains that support and reinforce corporate competitive strategy are far more powerful as drivers of success than those that focus narrowly on short-term gains such as cost savings. But supply chain professionals are often too busy with day-to-day demands to worry about big-picture issues such as strategy alignment. And they may not be intimately familiar with the company’s strategic course. A way to bring time-constrained managers onto a strategic track is to stage a Strategy Alignment Workshop.
Derived from research carried out by the MIT Center for Transportation & Logistics, these in-house exercises provide a structured methodology for educating managers on the importance of strategy alignment, and their role in tying supply chain operations to the organization’s go-to-market strategy. As one manager at a major electronics company commented after participating in a recent workshop, "Ninety-nine percent of workshop participants stated they would use the information and knowledge gained in their current job."
The workshops are built around the elements of supply chain excellence as defined by CTL’s groundbreaking Supply Chain 2020 research project to map the development of supply chains over the next decade or so. The research pinpointed four key elements of supply chains that excel in this supportive role:
* Supports and enhances a company’s competitive business strategy,
* Leverages a supply chain operating model to sustain competitive advantage,
* Executes well against a balanced set of competitive operational performance, and objectives
* Concentrates on a select group of tailored business practices that reinforce each other to support the operating model, and are the best available to meet the organization’s operational objectives.
Managers in supply chain-related disciplines – customer service, logistics, procurement, and transportation, for example – form the core of the workshop’s attendees. Importantly, there might also be managers who routinely interact with supply chain, for instance marketing & sales planning and manufacturing personnel. The aim is to attract current and future thought leaders who can participate in an interactive dialogue with their peers. The number of attendees can vary from around 10 to 50, depending on the anticipated scope of the discussions and the size of the organization.
To immerse attendees in a realistic setting, two or three product supply chains from within the organization are selected. Ideally, these should be associated with different go-to-market strategies. For example, the electronics company mentioned above opted for two product lines: components for PCs and for cell phones. The key criterion is that the respective markets are sufficiently distinctive, so they can stimulate contrasting discussions.
Attendees are divided into teams before the event. There should be two teams for each supply chain to give different perspectives on the deliberations. If more teams are preferred, a third supply chain is chosen, and another pair of teams is assigned to it. Each team membership should reflect the diversity of the overall group. Also, each team must assign a moderator.
To keep the discussions on track and maintain a systematic approach to the proceedings, the main questions are asked electronically in tabular form. The forms reflect the ideas attendees want to capture for each break-out session.
Before the event, attendees are given material to read that lays out the company’s go-to-market strategy and the background to the workshop methodology. This is reinforced on the first day with an introduction to the proceedings.
Following the introduction, the pre-assigned teams begin the breakout sessions. As mentioned, these are based on the four key elements of supply chain excellence and take place sequentially.
Breakout One: Strategy & Supply Chain
The first breakout revolves around the competitive strategy and the type of supply chain needed to support it. For example, participants discuss the company’s go-to-market strategy and identify the importance that each functional area plays in achieving the strategy’s competitive goals.
Breakout Two: Operating Model & Performance Objectives
Building on the first session, the second breakout considers the operating model and performance metrics that must be incorporated into the supply chain strategy to achieve the overarching objective of underpinning corporate strategy. An appropriate operating model (i.e., supply chain design) is developed along with a set of balanced operational performance objectives.
Breakout 3: Tailored Practices
This final breakout looks at the practices that are tailored to the operating model and performance objectives. Up to four tailored supply chain practices that align to the balanced operational performance objectives from the previous breakout are developed.
Strategy Alignment Workshops expose managers to corporate strategy, and get them thinking about how their everyday actions can be tied to that vision. Moreover, by encouraging the exchange of ideas between disciplines, the exercise has the lasting effect of fostering process innovation.
This is an excerpt of an article scheduled to be published in the monthly newsletter Supply Chain Strategy this September. For more information on staging Strategy Alignment Workshops in your company, contact Larry Lapide.