Meeting customer expectations with an integrative improvement system

Integrated improvement system

Executive Summary
Integrative Improvement management in a five-stage maturity-based process is enabled by the CCI-developed TRACC Value Chain Improvement Solution. TRACC embeds codified best practices into a management system across the end-to-end network to improve performance systemically throughout manufacturing and supply chain operations. This systematises the task of sustaining continuous improvement efforts across the entire business. The integrative nature of the TRACC Solution ensures that the business synchronises manufacturing and supply chain improvement effort.

 

Best practices are classified into a set of key capabilities, which involves core themes across domains such as strategy, systemisation, transformation management, roles, goals, accountabilities, organisation and knowledge management. Themes are used to structure content across core value chain process modules such as Value Chain Alignment, Leading and Managing Change, Demand Planning, Supply Planning, Procurement, Sales and Operations Planning and others. Themes ensure that relevant people, as well as process and technology priorities are applied to value chain transformation in a synchronised manner. This is difficult to achieve in disconnected projects.

The TRACC integrative improvement system uses maturity assessments to translate the current state into a road map of coordinated implementation actions across the global enterprise. Such a codified approach allows learning across the business network so that process–based competencies can be developed to improve and sustain performance.

The integrative improvement system is key to continuous leadership and management of supply chain performance improvement and change — an underdeveloped aspect of supply chain management.

In supply chain transformation the first four stages develop inside-out supply chain excellence capabilities off the essential base of manufacturing excellence enabled by the TRACC Operations Best Practices. Reliable and predictable supply is a core capability of supply chain performance and a foundation to the Stage 5 ‘unconscious competence’ process capabilities in an outside-in, demand–driven value network.

The integrative nature of the TRACC Solution ensures that the business synchronises manufacturing and supply chain improvement effort ― difficult in today’s fragmented organisational structures.

My Gattorna-developed dynamic alignment end-to-end supply chain model uses real marketplace demand as the ultimate reference frame for end-to-end supply chain transformation. By its very nature, it’s an outside-in model and paints the ultimate goal of what TRACC Stage 5 looks like.

Based on customers’ buying behaviours for various product/service categories (behavioural segmentation), the Gattorna dynamic alignment model uses these buying insights to reverse-engineer the most appropriate value propositions, operational strategies and organisational configurations back inside the enterprise. Usually this approach allows the three or four maximum horizontal supply chains in an enterprise to align with traditional functional silos where all the various speciality areas exist, e.g. procurement, production, marketing, logistics and sales.

These speciality areas are individually insufficient to satisfy the range of buying behaviours in contemporary marketplaces. A deep understanding of the marketplace is required to shape enterprise practices dynamically across the few core supply chain segments.Integrated improvement system

Looking from the inside-out, or push–based manufacturing, we don’t know what’s best and what’s not; so, it’s tantamount to guessing. If we know what good looks like from the dynamic goal alignment model, we can eliminate unnecessary complexity and build the right capabilities to align with the mix of buying behaviours in a particular marketplace. The dynamic alignment model can be used to complement and provide essential input to the TRACC Best Practices used to drive change across Stages 1–5.

For example, in developing process-oriented KPIs, we have to recognise that the measurements of success in a traditional inside–out Lean supply chain are different from those needed in an ‘Agile’ demand-responsive supply chain. Likewise the strategy and alignment recipes, training and development programmes and knowledge management systems will all vary.

By considering dynamic alignment as the definition of what good looks like, the journey to Stage 5 is less complex, easier to define and mobilises the organisation.

If all the segmented supply chain variations are driven from a finer marketplace interpretation, then transformational change leadership and management (grossly underestimated in supply chain transformation) are more likely to succeed.

By considering dynamic alignment as the definition of what good looks like, the journey to Stage 5 is less complex, easier to define and mobilises the organisation.

Success in Value chain alignment and performance improvement is then simply a question of mixing and matching standard principles and practices in various ways to achieve unique alignment within the three to four dominant buyer behaviour groupings identified in any given marketplace. This in turn will reduce under- and over-servicing, as well as improve margins, because we’ll be giving customers only what they really expect — no more, no less. But, this systemic approach needs change leadership and an effective integrative improvement system.

 

Disclaimer
This resource has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained herein without obtaining specific professional advice. Competitive Capabilities International (CCI) does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this resource or for any decision based on it.

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