Why are some supply chains operating at an optimum level, while others are struggling to perform day to day operations? How are some supply chains able to respond quickly to market demands, while others miss opportunities? Why are some supply chain managers able to reduce costs without compromising product and service quality, while others are dealing with rising costs?
There is only one answer to all these questions.
An organizational culture of continuous improvement is the secret of a healthy, cost-effective, responsive and efficient supply chain.
What is the Culture of Continuous Improvement?
As the name suggests, Culture of Continuous Improvement means – having a culture where process, system, service, and product improvement is an ongoing and continuous activity. This culture is embedded in the organization’s foundation. It involves, encourages and motivates all the employees, management, vendors, and suppliers to seek out avenues and means to improve how the organization functions at every level.
How do Supply Chains benefit from Culture of Continuous Improvement?
The supply chain is one of the biggest cost centers in an organization. It is the function responsible for manufacturing, storing, and distributing the product. It makes the product available to the end customer. To be able to keep up with industry trends and market demands it is necessary for supply chains to constantly innovate. And, innovation can’t happen without continuous improvement. In fact, both are interdependent.
When supply chains improve and innovate, they are able to do the following:
- Reduce costs
- Enhance efficiency
- Optimize processes
- Improve service and product offerings
- Decrease go to market time
- Reduce response time to market and customer demands
- Helps integrate the different functions within the organization
All these things help the organization improve revenues and remain competitive.
How to Create a Culture of Continuous Improvement in the Supply Chain
Creating a culture of continuous improvement requires the involvement of the entire organization. It can’t be done in silos. For example, if you plan to continuously improve your supply chain, you will by default have to roll out the continuous improvement plan in all the other departments as well.
Here’s how you can create a culture of continuous improvement in your supply chain and all the other functions of the organization:
- Align the C-Suite: Any process or strategy change in the organization can’t succeed without the involvement of the C-suite and function leaders of the organization. Once the leaders and the management is aligned and agrees to make continuous improvement a part of the organization culture, it becomes comparatively easier to implement changes.
- Set clear objectives and goals: Any change or activity undertaken without a goal or objective is not only difficult to achieve but also challenging to “sell” to the employees. So, when you decide to make continuous improvement a part of your organizational culture, define what you aim to achieve from it. For example, the supply chain’s objective can be improved inventory management, better machine utilization, or lower transportation costs.
- Define how you will measure it: Along with setting objectives and goals, it is also necessary to define how you will monitor and measure their performance. Unless there are proper metrics in place to measure the outcome, you will not understand if your plan is working in accordance with your goals. Apart from knowing how your plan is performing, results also help keep employees engaged. If they are achieving the said goal, it motivates them to do better and take initiatives to find other ways to further improve their performance. If it is not providing the said results, it helps find new solutions and opens doors for innovation. Either way, it keeps up the spirit of continuous improvement.
- Seek input from employees: Your employees are responsible for implementing the strategies for continuous improvement. They also have first-hand knowledge of the pain points of the process they handle and have insights regarding how it can be improved. If they are also involved at the planning and strategizing stage, they will be motivated to take ownership for its success.
- Allow room for failure: Condemning failures is one of the biggest hurdles in embedding a culture of continuous improvement in the organization. If employees feel they will be penalized for failure, they will neither suggest new ideas nor be enthusiastic about implementing anything new. On the other hand, when they have the assurance that they will not be punished for failure, they will not only be motivated to find new ways and means to improve the processes and systems but will also put in their best efforts to make them a success.
- Introduce technology: Technology is one of the tools to improve systems and processes within the organization. Any strategy to create a culture of continuous improvement in the organization can’t overlook the contribution of technology. By using the right technology, you can eliminate redundant and duplicate processes, reduce manual work, and integrate different processes. Technology also helps connect the end customers to the business, thus improving your service offerings. For example, if your logistics department uses a transport management system, you can connect with transporters and customers on the same platform. Track your shipment real-time and offer the feature to your customer as well. Additionally, a TMS will also help you monitor and track your logistics department’s performance. Thus, aiding you in your efforts to build a culture of continuous improvement.
While these steps will help you initiate improvement, to make it a part of the culture and keep it “continuous” you will need to pursue it relentlessly and passionately.
While these steps will help you initiate improvement, to make it a part of the culture and keep it “continuous” you will need to pursue it relentlessly and passionately. It will require steadfast efforts starting from the leadership team going down to the employees at the bottom of the hierarchy.
At BlueGrace we believe the passion for our work is what enables us to constantly look for ways and means to improve our services and products and find better solutions for our customers. It is the secret of the success of our organization. Want to connect with one of our experts to see how BlueGrace can help simplify your supply chain? Call us at 800.MY.SHIPPING or fill out the form below!