How to manage change
Irrespective of structure or name, the supply chain management (SCM) function must be dynamic to satisfy business needs. Whether the change is evolutionary or transformational, the profession can benefit from the skills of change management. Organizations are in a web of relationships, with competition, customers, suppliers and so on, and in this networked environment, supply chains are relying on and competing with each other. Businesses rely on their supply chains to fulfill their mission and deliver customer value. This extended enterprise is often the difference between a good business and a great one.
A successful SCM function is recognized by its management approaches and measures of success. It pursues effectiveness before efficiency, helping its organization identify needs, manages risks by taking a long-term view of requirements and fashions sourcing approaches to reflect the market. SCM must manage supplier relationships to sustain value and facilitate innovation. For many, recognizing this and doing something about it remains a challenge. Organizations and people seek to maintain status quo. Phrases like “we have succeeded so far, why change?” and “I have been here many years and we have always done it this way” are indicative. Similarly, everyone believes that they can perform SCM duties. Changing behaviors is not easy.
However, changing to a strategic function requires different skills and competences. Often, these are lacking in established organizations where depth in SCM bench strength is lacking and there is need to invest in people, acquire additional expertise and rotate employees to more fitting roles. This is not trailblazing—other functions have gone through this. The key is adopt CM practices, as most people are reasonable and will change if the case is well made. Here are some proven CM practices.
Set a shared vision
A successful transition to strategic SCM will be a vision’s outcome. This is a critical first step, and it’s your responsibility to create the imperative of the change and your accountability to articulate it in a manner that captures stakeholder imagination. Change that is envisioned and designed without stakeholder buy-in has a limited chance of success or sustenance. Make the case for the change, have people buy into it and allow your vision to evolve on the basis of new information. Take quick additive decisions and actions to solidify the change by creating momentum and a sense of inevitability.
Align goals to strategic direction
Leading a SCM transition with goals at odds with the organization’s strategic direction is a losing proposition. Neither your commitment nor the organizational levers you pull can sustain it. Change that does not align with the strategic direction gets people confused, leading to resistance and turnover.
When change is introduced, people want to understand what’s changing, how it’s different, how long it will last and how it benefits them. The answers provide direction and practicality to people and convert your vision into actionable expectations. Make stakeholders share in the ownership of your vision and the roadmap to the destination. Go out and sell, but more important, listen and be seen to listen. Adjust your vision or roadmap to reflect insightful feedback and do not be shy to engage.
It is a natural instinct for people to maintain the status quo and so are likely to resist change. However, there will be those who believe in the vision, are early adopters or are dissatisfied with the struggles of getting things done. Find them, cultivate their support, recruit them and leverage their influence. They will be your champions in circles beyond your reach.
Professor Adel Aladwani’s 2001 work found resistance to change or innovation comes from habits or perception of risks. The perceived risks of SCM change arise from fear of: loss of control, prestige, job security, pay increases and discretion. Recognizing and alleviating these concerns improves the chances of success. Identify, segment and target stakeholders appropriately as a defense against resistance. Support from the top level of management is crucial. Engage with them, share your vision, answer their questions and address their concerns. Sometimes, you have to give in to make progress.
Measure, share and correct course
Finally, what’s not measured can’t be managed. Identify milestones, KPI’s and targets of your change. Measure and track them regularly and communicate progress. When things don’t go as planned, admit it, find out why and take steps to right things. This is the “check-and-act” part of the plan-do-check-act cycle. Design and implement a suitable scorecard that measures effectiveness and efficiency, and reflects not just the function’s performance but progress on the change initiative.