Supply Chain Restructuring: Considerations for Change

One supply chain executive shares some tips for facilitating change in an organization.

It should come as no surprise to a seasoned leader that change management is often difficult to put your arms around under the best of circumstances. Why? Because the old adage “You can lead a horse to water but can’t make it drink” is alive and well in the workplace. Horses only drink when they are thirsty and, likewise, people only change when there is a compelling reason to do so. The more compelling the reason, the faster and more complete the change.

Having been intimately involved in four supply chain turnaround and restructuring efforts at four different organizations, I can say from first-hand experience that the change part is the most challenging and, frankly, also the most intrinsically rewarding when witnessed first-hand. Following are some key elements of a solid restructuring effort that may sometimes be overlooked.

Engage the people
There is no better way to get a ground floor view of supply chain operational effectiveness than to meet face to face with your customers and then compare your findings with those staff members delivering the service. Surveys typically don’t cut it because you will get a different and potentially less accurate result. The personal interactions and resultant observations form the basis for further investigation and subsequent development of action plans. The interactions also serve to build support throughout the organization for programmatic change and staff buy-in. The hope is to have staff members view operational changes as healthy modification – not mutation.

Recognize cultural realities
Every organization has its own unique signature relative to cultural considerations for change. Miss this step in change management and you could possibly miss the boat. Organizational culture is influenced gradually over time due to a myriad of factors and considerations. Therefore, it is important to acknowledge that diving into cultural uncharted waters could result in swimming upstream, and that puts you at risk for implementation delays, as well as potential misadventures that could complicate well-intentioned structural redevelopment. In reviewing and understanding cultural considerations within individual organizations, you can potentially help to avoid obstacles to progress and actually benefit by using cultural considerations to your advantage. They can be critical selling points, the compelling reason for change.

Ensure solidarity of purpose
Information gleaned from interviews and personal operational observations can rapidly reveal the chinks in the armor within a less-than-desirable supply chain function. One consistent finding in every troubled supply chain operation I’ve worked with relates to people in various areas of supply chain operations not being on the same page with regard to their supply chain role and responsibility. Solidarity of purpose was at best misunderstood and often non-existent in these settings. In general, supply chain leadership had failed to adequately connect the dots with their staff members and to educate them on the significant impact they have on patient outcomes: namely, getting the right product to the right place at the right time, as a shared responsibility to ensure that patient caregivers have what they need, when they need it. Their actions, or lack thereof, can and will have a direct impact on patient care at the bedside.

Organizationally there was also confusion and complacency concerning the fact that a strong supply chain is accomplished through teamwork and engagement at every level as it relates to being good stewards of organizational funds (e.g., getting great products and services at best price, as well as individual responsibilities for appropriate inventory control and preventing or eliminating wasteful practices).

Put the right people in the right spots
Senior leaders in healthcare are acutely aware of the importance of getting the right people on board and then placing them into the right jobs. However, even with the best screening tools, interview techniques and selection criteria, we won’t know what we have until we have it. So the best gauge for on-the-job success is actual job performance. During a supply chain restructuring effort, it is vitally important to assess and validate each individual staff member’s potential for growth and increased level of responsibility. Taking the time and effort to discover the best job fit will position staff members well for both personal and organizational success – a win-win scenario.

Nail down executive level support
Supply chain operations impacts literally every department in an organization. Therefore, executive level support and engagement is required to get restructuring efforts off the ground and moving forward. Many progressive and forward thinking organizations recognize the importance of having their supply chain leader report through someone in the “C” suite. However, a single supply chain executive champion isn’t enough to conduct full-scale supply chain restructuring efforts. Even under the best of circumstances, where an astute supply chain leader pays attention to detail and makes the right changes for all the right reasons, it will be an uphill battle without executive level support from the CEO on down.

Remember, change management does not start at the end of a project. It starts at the beginning. The next time you move down the supply chain restructuring path, these tools should help to improve your chances for success.

Editor’s Note: Gary McMann is the chief supply chain network for Los Angeles County Department of Health Services (LACDHS), which serves a population in excess of 10 million people.