Posts tagged efficiency

Why Business Can Bridge the Gap to Solve Social Problems

Why do we turn to nonprofits, NGOs and governments to solve society’s biggest problems? Michael Porter admits he’s biased, as a business school professor, but he wants you to hear his case for letting business try to solve massive problems like climate change and access to water. Why? Because when business solves a problem, it makes a profit — which lets that solution grow.

Moving Towards a Circular Economy

When you think about accelerating impacts and long-term solutions to current supply chain challenges that impact the 3P’s (people, planet and profit), we need to adopt and develop sustainable frameworks with a holistic life-cycle perspective. There is a ton of innovation happening in the CPG space (Levi’s, Unilever, PepsiCo, etc.)

Shifting from the current ‘take-make-waste’ linear model to the circular economy is critical for businesses to continue to thrive and meet society’s needs. Waste volumes are projected to increase from 1.3 to 2.2 billion tons by 2025, and with nearly 9 billion consumers on the planet including 3 billion new middle class consumers by 2030. The challenges of addressing waste and meeting increasing demand are unprecedented. Therefore it is imperative businesses continue to re-evaluate raw materials, design, manufacturing, consumption, and end of life to keep materials and products continuously flowing through closed loop systems.

How is your company innovating in product life cycle management from design and inception to sustainable product packaging? How are you personally adopting a sustainable mindset in your home, the daily choices you make as a consumer to move toward a circular economy? The bigger question is how are YOU INFLUENCING this change?

Why Leaders Should Rethink a Business Culture in Which Everyone Is Always ‘Busy’

 

Great insights from the Sindell’s/ Source: Why Leaders Should Rethink a Business Culture in Which Everyone Is Always ‘Busy’

Think about your day-to-day interactions in the workplace: Specifically, how do you react to the question, “How are things going?” We bet that, more often than not, your response is, “I’m so busy” — or words to that effect. In fact, society has reached a point at which saying “I’m so busy!” is the standard response and has even become a kind of badge or symbol of importance — “Of course I’m busy; I’m important!” This is not a healthy trend, especially considering how an emphasis on being “busy” has trickled down from company leadership to general staff. Today, all levels are displaying this behavior: Employees who rank lower and earn less are just as fixated as executives on staying busy — or at least appearing to be.

There is some science behind this observation: A March 2017 study published in the Journal of Consumer Research looked at how signaling busyness in the workplace impacts one’s status. The researchers found that in the United States, having leisure time is actually no longer considered prestigious. Instead, that kind of status is achieved only when people are perceived as being overworked and constantly busy.

Clearly, leaders and employees alike need to rethink this mentality.

The fallacy of praising “busyness”

If a company’s culture is plagued with this rewriting of what constitutes status, that organization will suffer. The reason: There are implications for a company culture when its people are obsessed with being busy.

For instance, employees may become run down. Job satisfaction may drop. Turnover may rise. Absenteeism may increase. And, despite the appearance that work is getting done, overall productivity and performance will suffer.

Let’s look at the specifics of what valuing busyness really says about a company’s culture:

Being overworked is rewarded.

For a long time, people who have worked overtime have been viewed as valuable employees. Because of this, people who work long hours are rewarded with promotions and higher pay. But think about the last person at your company who earned a promotion. What was his or her typical day like? Did managers see this individual working late and think, “That’s a great team player”?

Did all those extra hours of work earn this person points toward management’s decision to promote him/her?

Chances are, the answer is yes. While logically it makes sense to reward those who work the hardest, this scenario can lead employees to unnecessarily work themselves to the bone. A Staples 2016 study reflected this risk, reporting that a whopping 40 percent of employees polled said they felt burned-out at work. The top contributing factors that were reported to be causing this burnout were workload, time pressures, manager pressures and not taking breaks.

Not only does burnout damage morale, but it also negatively impacts true productivity and performance.

Time-management skills aren’t considered important.

When leaders maintain a level of busyness, they are more likely to appear overwhelmed. Others then think — validly or not — that those leaders have poor time-management skills.

That’s a problem because leaders who manage their time well handle their workloads and complete tasks efficiently. However, if a company’s culture celebrates the overwhelmed and hurried worker, younger professionals think that those overwhelmed leaders are doing just fine — that time-management skills are not particularly important.

In short, leadership has a direct impact on company culture. So, it’s not enough to just accept the busyness fallacy as the way things should be.

How to reverse this trend

Lead by example. Employees usually respect leaders in their company and follow their behaviors and actions. If companies allow leaders to skip breaks and vacations, employees will do the same. In fact, these people will become work martyrs. They’ll feel guilty for using their PTO and think that they need to show complete dedication to their company and job by refusing to step away.

Unfortunately, this is a common mindset many employees strive for. A survey by Project Time Off found in 2015 that 39 percent of employees surveyed said they wanted to be seen as a work martyr by their boss.

And this is another fallacy. Such employees may build their image by putting in long hours in the office, but that doesn’t mean they’re the most productive or the best employee. Plus, this behavior is linked to dissatisfaction. The Project: Time Off study also revealed that 47 percent of employees surveyed who were unhappy with their jobs and 46 percent of employees who were unhappy with their companies thought that it was actually good for their boss to see them as a work martyr.

Clearly, leaders need to discourage this behavior through “leading by example.” Companies should encourage managers to use their vacation time to get out of the office. That way, employees will see that enjoying their own PTO and taking regular breaks, instead of working longer hours, is the criterion for a good worker.

So, how can leaders lead by example?

Set clear boundaries. If leaders and managers are sending out emails at all hours, then employees will feel pressured to work. It’s hard for employees to understand when they’re truly “off” and when they’re expected to be working.

By setting policies about when managers may email employees, a company shows that it values its employees’ free time. This keeps everyone from feeling overworked or overly busy.

Be aware of remote workers hours. Establishing a work-life balance that is healthy is especially difficult for people who work from home. Because they work in the same place that they experience home life, finding that dividing line between work time and home time requires some direction from leadership.

Make sure remote workers know how long they are expected to work. It can also be helpful to have them track how many hours they put in during the day. That way, they don’t end up working longer than a typical office worker.

Change the conversation. Instead of focusing on being busy, companies should be focusing on getting results. When the shift moves from a cycle in which employees feel continually overwhelmed with “busyness” to one that focuses on results, the conversations change from “I am so overwhelmed” to sharing ideas and improving productivity. Interactions move from “I’ve got to run” to “this is what I am working on; do you have any insight?”

A person who is overwhelmed by busyness should be viewed as having poor time management, delegation and project-management skills. Culturally, when companies move from rewarding busyness to rewarding results, people feel less stressed.

Employees will still be working as hard as they were when they were “busy”; but, now, more expansive conversations and behaviors, plus a mental shift, will have occurred.

And that will mean there’ll be more time for success.

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Operations or Supply Chain Excellence?

I’m sharing great insights from Innovation Enterprise via Micha Veen who explains simple tips to master supply chain excellence pinned Operational Innovation.

Source: A Refreshing Innovative Approach To Supply Chain Excellence | Articles | Chief Supply Chain Officer | Innovation Enterprise 

Operational or Supply Chain Excellence has been one of the buzzwords that is often heard around senior Supply Chain Execs. However, is excellence the right terminology, or do we need to rename ‘excellence’?

Due to globalization, continuous creation of new small ‘global’ businesses that can compete with established organizations, leading supply chain organizations have started to look beyond ‘operational excellence’, best-in-class, benchmark data and industry metrics, towards using a combination of their own internal and tailored external relevant data to continuously review, assess, and adopt evolving leading-edge processes, technologies and behaviors to stay ahead in this ever increasing competitive business landscape.

This new approach, named Operational Innovation, has become an effective methodology to deliver transformational impact through the following elements…

Innovative solution design

Instead of spending a lot of time and effort in designing the optimal operational and supply chain solutions, successful organizations focus on creating a solid solution foundation, which is constantly reviewed and improved with cross functional teams to deliver cross-divisional, fit-for-purpose solutions.

Close collaboration

Instead of phased hand-offs between subject matter experts, technology specialists, operational teams, sales, finance, etc., leading innovative supply chain solutions should be created through continuous close collaboration with all impacted process participants at every stage of the supply chain journey.

Use of Robotics and Blockchain Technologies

A recent article (How will manufacturing robotics change in 2017) describes how robotics will change the industry as early as 2017. The article describes how by 2019, 35% of leading companies in logistics, health, utilities, and resources will start implementing robotics to automate their operations. Additionally, supply chain blockchain technology has started to be utilized in supply chain organizations to deliver additional benefits. A recent article describes clearly the impact that Blockchain has on Supply Chain.

End-to-end Solution integration

The key to delivering true Supply Chain Innovation is the manner in which organizations integrate end-to-end processes, technologies, data, and internal vs. external organizational units. Due to the external focus on innovative technologies, many organizations are still only focused on technology integration, but leading businesses have started to explore how different cloud solutions can be integrated across their partners and customers, creating hybrid learning organizational models which go beyond the traditional joint venture organization models.

Continuously generate value

In supply chains it’s crucial to continuously generate value. Through the use of innovative technologies, solution partnerships, operational models, etc. leading supply chain organizations are known to continuously review, adapt and improve their supply chain environment to deliver operational innovation. It allows supply chains to continuously deliver ‘new and improved’ excellence.

In today’s world, Supply Chain Excellence is not enough. There is no ‘end-station’. It’s critical for supply chain organizations to adopt an ongoing innovation journey, which requires people with the right mindset, experience levels, attitude and curiosity to deliver supply chain innovation….

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The Amazon vs. Retail Battle

 

Source: The Amazon vs. retail battle: Explained 

It’s no secret that Amazon is revolutionizing the retail industry. But what does that actually mean?

Which retailer is Amazon targeting now? Amazon newest target isn’t a retail chain at all — it’s your local convenience store.The company rolled out a new service today called Amazon Instant Pickup, which lets customers order basics like chips, soda and toothpaste. You can then pick them up from an Amazon locker in just two minutes.

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Isn’t mimicry the sincerest form of flattery? Not if you’re a retailer that wants to stay in business. Just ask Dick’s Sporting Goods (DKS). Dick’s earnings report disappointed Wall Street on Tuesday. The retailer lowered its full-year profit forecast today because of “a challenging retail environment.” Its stock fell more than 20%. Sound familiar? Last month, Amazon filed a patent to launch a competing meal-kit delivery service. Blue Apron’s shares plunged 11% following the news. And grocery stocks got clobbered after Amazon announced plans to buy Whole Foods (WFM) for $13.7 billion back in June.

Is Amazon a death sentence for traditional retailers? Not necessarily. Retailers like Home Depot (HD) are surviving by selling things you can’t buy on Amazon. Today, Home Depot reported record sales last quarter and bolstered its outlook for 2017. Home owners and professional builders alike still prefer to go to stores to test out home products, especially big ticket items like flooring and appliances.

The Two Levers of Inventory Optimization

 

Source: Supply Chain Comment: The Two Levers of Inventory Optimization

Back to present day and the supply chain. Two powerful levers a company can use to optimize inventory are “Working Capital” and “Customer Service Levels.” Through the effective use of these levers, you can free trapped working capital while improving service levels.

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Your company’s inventory efficient frontier is a tradeoff curve between working capital and service level and represents the currently achievable service level at any corresponding inventory investment. At its most basic, start with a piece of graph paper and plot your current service level on the x-axis and current inventory level on the y-axis. Chances are you are not on the inventory efficiency curve that is theoretically possible given your current operating capabilities. When you remove inefficiencies, failures, etc. and estimate how much your service level will go up and down with changes in inventory investment you end up with a curve – your current inventory efficient frontier curve. Organizations can slide up and down along this curve by manipulating the service and inventory levers (see Figure 1).

However to create real value you have to be able to shift the inventory efficient frontier so that higher service levels can be achieved without increasing inventory or the same service levels can be achieved with less inventory. Multi-echelon Inventory Optimization (MEIO) allows you to truly optimize your inventory across the entire supply chain and enables you to shift to a new efficient frontier for your entire supply chain.

By modeling the end-to-end supply chain, MEIO determines not only the optimal inventory to carry at each location but also at which locations each item should be carried. MEIO looks across sales channels, distribution tiers, and even types of inventory (raw, WIP, FG) to understand how best to minimize total inventory while still providing the desired customer service levels. MEIO can take you into unexplored territory providing reductions in working capital of up to 30 percent or more. For most companies that amounts to millions of dollars in savings annually. That is an impressive use of levers.

What is important to understand is that the supply chain is a living, breathing and constantly changing organism. Your optimal inventory strategy for this month might be suboptimal next month due to changes in demand or supply, changes in competition or market health, or a variety of other factors. Modeling your end-to-end supply chain inventory is not a “one and done” activity and therefore there is always opportunity to shift that efficient frontier into new and undiscovered territory.

Do you understand your company’s service level – working capital tradeoff? Can you model your end-to-end supply chain to determine your optimal inventory locations and levels?

About the Author
Henry Canitz is The Product Marketing & Business Development Director at Logility.