Process Improvement Can Mend the Supply Chain

Ann All

It seems fairly obvious that a company's underlying support processes can make or break its customer-service efforts.

 

Gartner thinks it's so obvious it scheduled late 2008 events focused on customer relationship management and business process management back-to-back and in the same general locale so folks could easily attend both. In my post about the intersection between CRM and BPM, I included a quote from an attendee, who observed "without the right processes underneath it all, the best CRM strategy can't work." I believe I said something to the effect of, "You got that right, buddy" out loud when I first read it, probably startling my coworkers. (Or maybe not, as they are no doubt used to these kinds of outbursts by now.)

 

That post came clearly to mind when I read a strategy+business piece describing how Cricket Communications improved its supply chain. The customer service/process connection is clearly illustrated when Cricket's SVP for procurement and supply chain management describes how the company uncovered what was obviously a badly broken process -- salespeople rewarded for customer satisfaction who were accepting out-of-warranty products for repair and giving customers new ones -- and tweaked it by instead offering company credit to customers who traded in broken phones for new ones at Cricket stores. In an interesting twist, customers also received credit for turning in phones from competitors. The key, writes SVP Keith Buckley:

Absent the innovation imperative, a rules-based solution might have been devised that brought costs under control but left customers even more dissatisfied. Instead, the team came up with a more creative solution, and acted quickly to implement it.

You said it, buddy. (Did I say that out loud?) Buckley also notes an apparent connection between the new policy and an increase in new customers.

 

In addition to illustrating how supply chain process improvement can save companies money, increase customer satisfaction and drive new business, the article shows the importance of making the supply chain more transparent. What Buckley calls "an innovation imperative" appears to come down to a willingness to try new processes. I think many improvement efforts suffer when this gets discounted. Echoing Gartner (again), which recently pointed out that incremental improvements can be just as innovative as big-bang product introductions, Buckley writes:

... Innovation at Cricket doesn't apply only to grand ideas. But the approach we used to stimulate supply chain innovations could be replicated by any company transforming an operational system. The key is to consciously and consistently make innovation essential to the project.

To make sure this commitment to innovation was given more than lip service, Cricket created a cross-functional forum called the White Room, with team members from across the company (and outside it, as well) to monitor progress and make suggestions for improvement.


 

Cricket also acknowledged it was OK to make mistakes. Buckley refers to it as "the perfect does not get in the way of the good." He writes:

If all the available information points to a quick return on investment, waiting for perfection can delay both the impact of innovative ideas and the opportunity to learn from their execution.

As supply chains become more and more complex, many companies could seemingly learn from Cricket's example. Because of their visibility into the supply chain and its supporting systems, CIOs are nicely positioned to take a leading role in improvement efforts.



Add Comment      Leave a comment on this blog post
Jul 28, 2009 1:04 AM Jon C. Jon C.  says:

even if a solid core set of processes are in place, it's imperative to always go back and re-evaluate every now and then.  over time, things change and can disrupt the process without management ever knowing.

Reply
Jul 29, 2013 3:01 AM Winston Ceaser Winston Ceaser  says:
One needs to take one step backwards from having robust Supply Chain processes or systems in place. It is of vital importance that the correct people occupy roles in the Supply Chain. These people must be hand-picked, trained, mentored, developed and eventually ushered into these roles through a process of what I call 'self transformation'. Many companies make the mistake of 'plugging' holes by allowing unprepared staff to occupy these roles and expect the earth from them. Another area of concern is that companies employ inexperienced staff to occupy SC Management roles. They believe that this will save costs...but at what cost? They need to in my opinion employ a senior person with the proper experience and credentials to develope and mentor staff that will one day take over the senior role of Supply Chain Manager. This is proper sucession planning. Supply Chain Management is the relentness management of a customer's order from intake to the despatching of the product, reducing costs but delivering exeptional quality, on time every time. Most companies are content to fight fires daily and to hide costs, thus providing inaccurate SC DATA which drives the SC DASHBOARD INDICATORS Reply

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