By Jim Fuller
Supply Chain Management is best defined as the systemic, strategic coordination of traditional business functions and establishing tactics across all businesses within the supply chain, for the purpose of improving long-term performance of individual companies and the supply chain as a whole.
Many of today's topics are about the Supply Chain and managing it. The only issue is that most of us do not understand Supply Chain theories or what roles we could play to improve it. My experience is that many simply get up every day trying to meet established objectives for their company (or bosses) and follow time tested daily routines. These routines have worked for years so why change now?
Change is constant and the speed at which businesses operate today has created greater demands for controlling step by step logistics; from concept and production, to placing the product into service and beyond. That is why I want to write about how important it is for us to work through our established supply chain and attempt to illustrate how discipline and communication are essential processes in making our businesses successful. Additionally, I hope to create thought provoking questions about what it takes to establish a business plan that includes each link in the Supply Chain. How could you improve communications from multiple levels to accomplish a single task? Are you fully aware of your Supply Chain partners?
Many books have been written, some better known than others, to lead us through today's complicated and demanding world. Works like Six Sigma, TQM, ISO Standards and Kaizen operations (Japanese for "improvement" or "change for the better"); each referring to philosophies or practices that focus upon the continuous improvement of processes. Then there are discipline processes like 5 S's which was developed to create a workplace organization that eliminates wasted items, puts everything in a dedicated place, maintains daily cleaning, and establishes standard operating procedures which are all reviewed, measured and audited to ensure compliance. Now, top that off with global economies, logistics for Supply Chain Management (SCM), Warehouse Management Systems (WMS), and measures for Gross Margin Return on Investment (GMROI), which are all designed to enhance our ability to manage and measure day to day operations for sustained continuous improvement.
WOW, no wonder my head spins with so much to consider. Which points would be better or more important to make the case that discipline and communication was needed in all workplaces? Are they all critical when building business templates and operational standards for excellence? Then came a weekend with NASCAR! First thought, it will be an escape from reality with a little bit of Larry the Cable Guy mentality. But what I discovered was that NASCAR is a great example that many business operations should use as a daily guide for communication, performance standards and preparedness throughout their supply chain.
NASCAR is a whole lot more than just driving skills and making left turns at 180 mph. Each car is essentially a multi-million dollar business with stringent requirements in planning, record keeping, measuring of miniscule details, logistic coordination, rigorous check-check process controls and continuous testing for improvement. Bringing together all components for a race is a tremendous task. Just to build a car is a logistical nightmare with engines, shocks, frames, tires and equipment coming from multiple manufacturers.
With a grueling 36 week season, consistency, discipline and communication are essential to maintaining top level performance. And, this is a world of top performers where every team member understands the necessity to manage all critical elements while maintaining inflexible controls over every minute of every day to drive success. One small slip could make the difference from being positioned to win and not even qualifying for the race. This is when it dawned on me - NASCAR standards are a perfect guide for managers who stay in it for the long haul, work day in and day out and must perform to higher standards to meet Supply Chain demands.
NASCAR's Supply Chain
First let's start with a story about Ray Evernham and his perception about the role of a crew chief. When he and Jeff Gordon were teamed up they won 47 Cup races, 3 Cup championships (1995, 1997, and 1998) and were the dominant team in NASCAR Cup competition at the time. It was obvious Ray was never one to shy away from change. He made a huge leap in altering the structure of his organization, Ray Evernham Motorsports, by giving his crew chiefs the title of team directors.
Another team that has exhibited excellence is Crew Chief Chad Knaus and Driver Jimmy Johnson, who together set a new standard for excellence. They have navigated their team through four straight National Cup Series Championships (2006, 2007, 2008, and 2009). They are the envy of most team managers; how they work together, demonstrate the tenacity to manage all required elements and be consistent winners. They deal with personalities of high profile car owners and sponsors, and maintain control from planning to building a race car, continuing until they roll into the Sprint Cup Series Championship at the end of the season.
Crew Chiefs must understand every function and part on their car, all while controlling unpredictable demands at lightning speeds. Everything required is staged and ready to go, positioned for quick response and accurate handling. Communications are constant and include all team members of the supply chain, so in the event of unexpected need, it gets done. Fourteen seconds does not sound like very much time, but in their world it is everything. They must be able to stop the car, change four tires, clear the windshield, fill 22 gallons of fuel and clean the front grill. Now that's performance! There is no room for error and once a car leaves the pits to rejoin the race, work for the next stop is underway. Every step in the process is reviewed and measurements confirmed to history as need. If additional requirements for material are discovered for the next stop, they are planned and positioned. In essence, a crew chief is – a Supply Chain manager.
You might be asking…. What does this have to do with me? Well if you are attempting to manage in today's business environment, one that demands performance levels more than ever before, then I am sure you can relate. Whether you are a manufacturer making waterworks products, a distributor stocking and delivering material, a contractor laying a new pipeline or repairing an existing one, or a municipality or water district trying to keep a water system up and running - every manager could learn from the disciplines exhibited by a crew chief during a NASCAR event.
Yes, many managers are controlled by the business rather than controlling it. Many expect rather than inspect. Many demand rather than plan. Many wait rather than communicate. It is not an easy task to be a Crew Chief for your business and successfully budget income, lean inventories, direct people efficiently, provide customer care or manage daily processes. Paying attention to detail takes superior levels of commitment and discipline, but these are attributes that every manager should learn and possess.
Just like NASCAR, as a manager, you must bring together all the pieces of the puzzle to make the job a success. While it is not necessarily considered winning, to be able to complete a job within budget and meet all job requirements takes tremendous balance. Taking control and working within the Supply Chain has the potential to greatly improve your financial performance, top-line growth, profitability, working capital, and utilization of fixed assets.
Begin working with your Supply Chain partners and take the lead in improving communication, direction, and cooperation from each link. Then you too will be a Crew Chief running a winning team. WW
About the author: Jim Fuller of Coburn Supply Co. is Chair of the WASDA Marketing Committee.