Do You Know What Exception Monitoring Is?

Most companies do not use Exception Monitoring or even know what it is. There is always someone who will put their hand up and say, “I know what it is” but the truth of the matter is, they really don’t.  In 8 years and all the companies I have worked with, I rarely come across anyone who truly knows or understands Exception Monitoring.  I know this is a horrible thing to say, but we must face up to that fact.  No one manages by exception.  Why? Because people work in their own silos. Not just different departments mind you, but silos within those departments.

The best thing about SAP is that it is a powerful integration tool which, by definition, is also the worst thing about it in the eyes of many people.  This is because when used correctly, SAP forces communication between different departments.  That requires change, and people don’t like that.

Why Manage By Exception?  What Advantage Does that Bring?

If you want to improve your supply chain, then you need to pay attention to exceptions. Exception Monitoring will show you the balance between supply and demand. Exceptions direct us to the following four things: The true path to a balanced supply chain is to use exceptions to highlight bad processes, master data and behaviors.  The hard part is to fix the exceptions and change both the way people behave and their business processes.  What is even harder is to sustain those behavior and process changes and turn them into the new way of business best practices. This takes true leadership.  Without this, people tend to slip back into what they did previously.

In essence, you need to manage your exceptions to manage your business. Leadership cannot shirk their responsibilities and must hold people accountable for their actions.

All departments within the supply chain must integrate and step out of their silos. Negligent behaviors within the supply chain are evidence of the lack of integration.  By using Exception Monitoring, best practices (Management by Exception) will gain back integration and break down those silos. This will also avoid a break down in the service your supply chain needs to perform within SAP.

Look beyond transactions, focus on the integrated supply chain, drive accuracy of information in SAP to reflect what happens in your company’s daily activities, and get activity managed outside SAP back into the system.

Once this is done, the people and the business will start to use Capacity Planning to identify if you and the business have the capability to manufacture what your business needs. By far an easy task, because people like to make what they think they need.