Culture miss match there is no point in digging deep

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Culture miss-match– There is no point in digging deep into how to reduceinventory levels while improving service levels from the traditional people, processand systems perspective if the culture dictates failure. I know it sounds strange as noexecutive would deliberately state that inventory and customer service are prioritieswhile sabotaging success with incongruent cultural norms, yet it occurs frequently.For example, one of my clients was dedicated to inventory management and evenassigned an executive to focus on it yet had cultural norms in place that were inopposition to the strategic objective – the incentive systems were set up toencourage a P&L focus at the expense of inventory management. In anotherexample, the executives had spent a bundle on a new ERP system to improveinventory management yet didn’t make progress due to cultural norms – even thoughmetrics tracked inventory turns and service levels, 80%+ of the executives’ questionsrelated to sales dollars.To be successful, it is vital to begin with cultural norms. You don’t change a cultureovernight but with focus, new examples and metrics, you can make an impact.Focus & skills miss-match – I thought I’d continue with the next most frequent issue– the lack of focus and a skills miss-match. For example, if inventory is an important90
objective for your company, what does it tell the organization if you have a lowerlevel position managing millions of dollars? As odd as this seems, it often occurs.The skills required for inventory management can be a hard-to-find combination;however, it can mean the difference between success and failure. In my experience,the ideal person has not only a high level of analytical ability but also effectivecommunication skills. Undoubtedly, planning and purchasing folks are in the middleof competing objectives (purchase price, production efficiencies, cash flow, salesrequests etc.); thus, strong communication skills are a must! Do you have the rightfocus and people in place?An abundance of complexity– If there is a common theme in not only inventorymanagement mistakes but also in operational / supply chain mistakes, it is anoverload of unnecessary complexity. Throw it out!For example, trying to use the latest and greatest bells and whistles in your ERPsystem often times leads to chaos and confusion when a simple report orspreadsheet utilizing base ERP data would deliver 20 times the results. It isn’t thatthe system is “broken”; however, setting up and maintaining the variables in order toleverage full functionality are often times not only cost prohibitive but also beyond theskills of the people tasked to the job.On the other hand, getting caught up in the latest concepts like lean seems like a no-brainer; however, unless you have the culture, people processes and systems tofigure out how to implement effectively, you can end up with a much larger disasterthan ever imagined (proven by a few of the companies I’ve worked with). Instead,think about what’s important, prioritize and simplify.

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Term
Spring
Professor
NoProfessor

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