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Getting the Most Value From Supply Chain Optimization With SAP

Processed Aligned Teams
By
Sean Elliffe

An ERP system is only as good as the people who use it. For a business to fire on all cylinders in an aligned and integrated way, the smart use of people, process and technology is a strategic imperative. Your organization—much like your ERP system—must be integrated end-to-end with a true line of sight that breaks down siloes and puts its trust in human capital.

There is little doubt that organizational integration empowers people, thereby energizing teams and the organization itself. According to research conducted by Aiir Consulting, connected teams demonstrate a 21% increase in profitability over their less-connected counterpoints. Moreover, teams that rank in the top 20% for connectedness see 41% less absenteeism, 59% less employee turnover and a 66% increase in employee wellness

How, then, does your organization make the jump to an integrated end-to-end system?  Reveal has developed and applied a concept known as “Process Aligned Team(s)” or PAT. An aligned team is a team that aspires to work towards a common goal and is empowered to make decisions that drive change and ensure real-time performance improvement. In this aspect, it is not unlike a cross-functional team. When the individuals that compose a PAT are actively performing functional day-to-day duties within the supply chain with a common goal, tasks can get done a whole lot faster and a whole lot more efficiently. The shared goals embraced by PATs are to:

  • Drive and ensure coordination and integration.
  • Enhance performance and process improvement.
  • Cross organizational borders in establishing ownership and accountability.
  • Drive automation using system capabilities to reduce inefficiencies e.g., cycle times.
  • Drive resolution of exceptions, improve problem solving and ensure robust decisions inside of structural escalation where needed.
  • Ensure a process of cooperation with ongoing change and improvement.

A PAT differs from a conventional team in many aspects. In a nutshell, an effective PAT is superior to a traditional tiered team because it is more dynamic and results-oriented, enabling improved communication, collaboration and coordination. Additionally, a PAT crosses organizational borders thereby establishing sound ownership and accountability, enables better problem solving and decision making and ensures a process of cooperation with ongoing change and improvement. Finally, a PAT elicits a feeling of fulfillment and cohesiveness. Aiir Consulting found that 37% of employees said “working with a great team” was their primary reason for staying at an organization even if they were not happy with their job.

While members will have different reporting lines and therefore competing allegiances and responsibilities, the PAT comes together for a targeted focus. That focus is to find inefficiencies and issues that compromise business effectiveness across the board. Teams are expected to perform tasks that build organizational knowledge that will be shared in the company, while driving supply chain outcomes that meet pre-determined KPIs.

High performance standards are expected requiring up front development and interactions for success. Those kinds of standards do not develop overnight. They require a buy-in from the very top right down to the newest member. 

  • Management must be engaged, supporting the approach and their teams, and willing to commit the necessary resources and time to the teams’ success.
  • A team leader must be chosen who can communicate well with the authority commensurate with the responsibility.
  • Members must be motivated to participate. They must be open to challenges and willing to drive the communications and escalations through supportive channels capable of removing roadblocks

Achieving this goal demands that the relevant functional areas across the business are incorporated into the team. It also requires that members are given the ownership, accountability and authority needed to complete the assigned tasks. Unless and until the entire organization, from the highest management to each individual team member, is committed to full support of the PAT, it will not succeed.

Most of all, goals, outcomes and key stakeholders must be determined early on. The goals need to be both general in nature and specific in highlighting how each member needs to work towards a positive and common outcome. By doing so, teams become enabled to shift into a problem-solving mode and move beyond personal reservations and disconnects. Identifying the stakeholders and determining what they have to win or lose from  their involvement is important in creating buy-in and avoiding the breakdown in the efficacy of the solution.

When a PAT is doing what it is supposed to do—build solutions and performance—it will  deliver speedy outcomes of change through informed and consensual decision-making. At Reveal, we use a threefold action-oriented mantra.  The first bucket is “Fix It Now” and it means precisely what you would expect. If the challenge is simple, the PAT member takes charge and fixes it based on that member’s functional expertise. The next is “Fix it Today”.  In this instance, the team member may present an issue and seek guidance looking to complete the issue by Close of Business (COB) the same day without the need to escalate the issue. 

Finally, the member can opt to “Put it on the Action Tracker.”  This decision is often fueled by the insight that the required change will impact production, sales and procurement and, in fact, may change the way the organization does business. In this instance, the PAT might need additional resources investment influxes and management’s input becomes vital.

Once we understand the essential ingredients for success and what is needed when establishing PATs, it becomes easier to answer the question, “What is the value from our process aligned team(s)", the real value is the integrated focus it brings to managing the business better and in collaborative solving problems that stay resolved. The net result is:

  • Members better understand that company improvement and success directly benefit each and every person working in the organization.
  • Communication improves because PAT members help and support one another with a real sense of collaborative teamwork.
  • Communication improves because PAT members help and support one another with a real sense of collaborative teamwork.
  • People share and identify issues more readily, secure in the knowledge that others will have their back and that challenges teammates face will impact them as well.
  • Problem-solving skills are significantly improved as teams build unanimity on the actions needed to resolve the issues.
  • Conflict management improves with the recognition that disagreement can be good and more importantly, that diversity strengthens and propels success.
  • Coordination across functional areas improves, driving innovation with enhancements in efficiency and effectiveness.

By aligning on goals and outcomes and sharing in solid results, every “win” becomes a team win, and every success becomes everyone’s success. The results cited by Aiir Consulting are overwhelming persuasive. 86% of employees and executives cite lack of collaboration or ineffective communication for workplace failures while 97% of this group believe lack of alignment within a team impacts the outcome of a task or project. When PATs come together daily to remove barriers and work collaboratively, problems are solved and stay resolved.

What are the organization structures that stand in support of the PAT process?  Stay tuned. We will be addressing that topic in the near future.

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Can an Agile Supply Chain Help With Our Digital S/4HANA Journey

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Martin Rowan
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