Beyond Systems and Processes The Human Factor in Supply Chain Success

From Binary to Analog: Why Humans are the X-Factor in Optimizing Performance

For all the tremendous advances in supply chain systems and processes, it is the people factor that differentiates a best-in-class supply chain. While systems and processes are important—indeed, essential—when there is greater trust, better communication, and enhanced collaboration across the supply chain, the result is increased efficiency, a better functioning supply chain and a culture of continuous improvement.

The spotlight on the critical role of the human component is occurring at a time when both systems and processes are experiencing exponential growth. According to a law postulated by Gordon Moore in 1965—Moore’s Law—the number of transistors on a dense integrated circuit (IC) doubles every two years. Like a modern-day metronome,Gordon Moore’s prediction has established a dynamic pace for systems advancement that has rippled across the general field of technology advancement ever since.  SAP is a function of that technological advancement and has evolved to be an infinitely capable system to orchestrate and manage supply chains.

Simultaneously, methodologies like Lean Six Sigma—relying on a collaborative team effort to improve performance by systematically removing waste and reducing variation—has led the way to maximizing efficiency and increasing profitability through process optimization.

All this is promising for supply chain optimization, but it presents just part of the picture.  Both systems and processes are binary in nature.  We are able to make specific changes and measure the outcome – repeatedly and reliably time after time. We can, for example, change a lead time from 30 days to 15 days to plan more efficiently—or not. Or change it from 30 days to 45 days to better communicate our customer promises—or not. The variables that we can optimize are limited in scope and produce predictable results.

The third functional component that is often left out in measuring supply chain effectiveness is the human component. Human performance is not measured by a success or failure equation but rather, by degrees—as analog, not binary. We can continue to produce predictive insights and reduce costs through computational horsepower and algorithms, but it takes people to drive excellence forward.

More effective teams will produce more effective supply chain results. How, then, do we optimize our teams for the greatest performance?

Unlocking Emotional Intelligence: Building Resilience and Effective Problem Solving

1. Teams Are Collections of People   

People, at an individual level, need to know that they are valued, and their contributions are appreciated. At the same time, they need to recognize that they maintain an integral and integrated function in the supply chain, which is not just hierarchical, but functional.

Getting to that recognition begins with an acknowledgment of the real person who inhabits the functional role.  People don’t wake up on the same side of the bed each morning and other parts of their life—a sick child, a marital issue—are bound to affect them. Still, if they are not performing optimally, their inability to fulfill their role will certainly impact others.If, for example, materials hit the loading dock late in the day and the dock and warehouse team is forced to work overtime, there will be a number of other disgruntled employees.  

Rally people around the goal, not the individual incentives, but instead the company goal.  The intrinsic motivational factors of purpose, autonomy and mastery will drive performance and employee contentment.

2. Learn & Apply Emotional Intelligence

Put succinctly, emotional intelligence is a set of character and personality skills. It includes emotional awareness—the ability to identify and name one’s own emotions—and the ability to harness those emotions and apply them to tasks such as thinking or problem solving.

Those who are emotionally intelligent are able to deal better with whatever life throws their way. The best news is, these skills are not set and immovable. Team members can be trained in these skill and improve them through the willingness to grow and learn. Each member of the team should be charged with making emotional intelligence part of their daily language and teaching themselves to become better in their functional roles—and to encourage others to be better as well.

3. Understand & Strengthen the Five Behaviors to Drive Cohesive Teams

The Five Behaviors® of CohesiveTeams —a partnership between Wiley Workplace Learning Solutions and author Patrick Lencioni—provides a behavioral model that empowers a team to operate as efficiently and effectively as possible. The characteristics exhibited by a cohesive team are trust, healthy conflict around ideas, commitment, accountability and results, and each behavior in the model builds upon the previous one and supports the others.

The process starts with a willingness to be vulnerable and an openness to engaging with counterparts and learn from others. With a trust in one’s self and one’s team members, each individual can challenge what needs to be addressed and commit to decisions. The result is an empowered, directed team that is tied to a universal purpose.

4. Recognize That Team Transformation Is an Ongoing Journey 

Too many people view transformation as a project with a start date and an end date. In reality, transformation never ends. New behaviors lead to new learnings and new journeys.  As a result, the transformational process needs to be institutionalized into the work culture and committed to daily.  Remember the saying: “I don’t hear a word that you say, but I hear every word that you do”. Everyone in the company should serve as a role model for other team members by how we show up and what we do.

Recognizing the critical role of the human factor does not invalidate the focus on the continuous evolution of systems and processes. But we should never forget that the human component is part of the integrated improvement of any supply chain. It is the greatest x-factor in excellence and the toughest component to get right.  Every person, from top management on down, and horizontally across the full supply chain, must consistently work on themselves—and also, work together—to achieve the most optimized supply chain.