Managing Performance

We as supply chain managers typically oversee the following:

• Demand
• Inventories
• Performance

It’s all part of our job to be perfect in serving customers and productive in meeting the standards of our superiors.

We manage demand to synchronise supply.

We manage inventories to make available products & services and make sure we don’t have too much (or too few) items on hand.

The third thing we do is we manage performance.  Managing performance is about making sure the supply chain operations we manage are doing what they’re supposed to do in the fulfilment of demand.   

Whereas managing demand is about matching our supply chains’ capabilities to the demands of our customers and whereas managing inventories is about establishing and maintaining stock levels of merchandise, managing performance is about how we converge people and resources to do the activities that add value to the flow of items through the supply chain. 

Managing performance necessitates the basic skills of:

1. Planning
2. Organising
3. Directing
4. Controlling

For us who work in the supply chains, we use each skill for specific functions.  The following are some examples:

Scheduling Operations

We schedule to synchronise supply to demand.  And it can and is a daily daunting challenge for supply chain operations managers.  We schedule what and how much to buy, what and how much to make, what and how much to deliver to every customer every day.  We balance tailoring deliveries to serve customers to their standards and optimising deliveries to minimise cost and maximise revenue.

The challenge of scheduling in supply chains is the planning and syncing of multiple but uniquely different operational steps while at the same time negotiating with third parties like vendors and freight providers which we depend on for reliable services. 

The best tool for scheduling is usually the simplest:

Ref: Behold The PSI: A Basic Tool for Supply Chain Planning

Organising Crew & Resources

Preparation is a very important word in supply chain management performance.  The more prepared one is, the more likely a supply chain will perform well. 

Preparation requires a great deal of organisation.  Not only is it about having a structure, policy, or plan, it’s also about engaging, marshalling, and deploying the talented crew of people and the required resources together. 

Examples of tasks in organising include:

1. Assigning crew members such as who to operate equipment & when;
2. Staging of materials, components, equipment (e.g. pre-mixed chemicals, pallets, parts, machines) for easy obtaining and utility by an operation;
3. Booking of transportation assets;
4. Negotiating supply contracts with vendors;
5. Working with 3^rd party brokers in processing of imported goods.

Many of us delegate the organising of our people and resources to team leaders or trusted deputies.  As much as this may be fine in many cases, it doesn’t spare us the responsibility to be hands-on and watchful of the work itself.  In short, it’s our job to organise; passing it on to other people to do doesn’t make us less accountable. 

Ref:  What Organising Really Means

Setting the Pace

Supply chain performance is determined by its pace, which is not only how fast our items flow but also how we do it in step with all operations together. 

We make sure schedules are followed but we also don’t hesitate to respond and adjust as needed. 

Examples:

1. We increase production if materials arrive early or if our people are finishing their work faster than we planned (and we reward them if we could);
2. We alter a delivery truck’s route due either to heavy traffic than usual or if customers ask for a last-minute change in their receiving location;
3. We move up preventive maintenance on a production line because of delays in raw material arrivals that would potentially idle our manufacturing team;
4. We revise the purchase requisition of packaging materials due to noticed issues detected by our quality control team.

We supply chain managers set the pace of our operations as part of our efforts to fulfil demand perfectly and productively.

Ref: The Nimble Supply Chain:  Is It Even Possible?

Disciplining the Teams

We are the managers and ideally, the leaders of our supply chain organisations.  We are the ones who set the standards for which we motivate our people to follow.  In short, we discipline our teams.

Discipline is a basic management aspiration.  But it’s not just about getting people to follow rules, urging 3^rd parties to comply with contracts, or enforcing neatness & cleanliness in the workplace. 

Discipline is also about collaboration balanced with firm enrolment to standards.  We work with our people and our 3^rd party service providers to set & agree to rules & procedures but without compromise to principles our enterprises believe and adhere to. 

1. We praise our people for jobs well done;
2. We negotiate win-win contracts with our 3^rd parties;
3. We listen, empathise, adapt but at the same time, stress our side in getting what we want;
4. We communicate with our 3^rd parties and our people when we disagree or take a stand to enforce rules. 

Punishment in the disciplining of supply chain operations is always a last resort, something we want to try to avoid.  It’s not because of any dominant management philosophy but that supply chains consist of interdependent steps which determine the flow of products & services.  We take care to maintain the relationships; punishment indicates things aren’t going well with them. 

Ref: Management is Not Leading, and It Isn’t Staffing Either

We apply each of the basic skills of planning, organising, directing & controlling on its own and altogether how we manage people and our operations.   

We always begin with goals, rooted in the overall strategy of whatever enterprise we work for. 

From those goals we determine our performance standards which we will measure ourselves against.  Performance standards are the bases of performance measures.  We and the people we manage must know in a timely fashion how well we are doing.

Performance measurement spurs action planning.  What plans we make in response to the measures we assess must be SMART, i.e., Specific, Measurable, Actionable, Realistic, and Time-Bound.  The action plan itself is expected to address challenging goals and thus should be methodical, reflecting a visible path to ultimate accomplishment.  Because action plans in supply chains often need multi-functional coordination, we collaborate with partners to get things done. 

As supply chain managers, we not only manage demand and inventories but also manage performance of our operations.  We apply our basic skills of planning, organising, directing, & controlling but we tailor them for the variety of unique activities which define our supply chains. 

Supply chain management is challenging work because we not only oversee the operations we are assigned to but we also maintain relationships with the people & 3^rd party partners we are linked to.  It requires collaboration and cooperation on top of basic management.   

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