Mega Change: or, Getting Everyone Out of the
Comfort Zone (Including Me)

One particularly difficult transformation process was my third—which meant that I should have learned many lessons already! Nonetheless, only two people in a department of twenty showed any enthusiasm for supply management trans­formation. Most of the personnel had long-established rela­tionships with suppliers, and the department was divided into subgroups identified by the materials or services that they pur­chased. Thus, people were so-called “experts” in their particu­lar material or service. Unfortunately, many pursued their own materials and services without regard to the impact on the total product or machine.

I first moved the entire department to a new area in the com­pany. I changed everyone’s title. I developed a glossary of sup­ply chain management terminology that they were to use in all their correspondence. I challenged them to prove to me that they were not only getting the best price for their particular materials, but also the best total cost of ownership. I also made them cre­ate or refine metrics to measure their suppliers’ performances. I expected strong data to prove it. I insisted on monthly written reports from everyone. I gave them a template for the report, and they had to adhere to it. I insisted that they evaluated their savings in terms of the market for their materials. Thus they had to learn the market well for their particular materials. If the market price had gone down by 5 percent for the year, and they only saved 2 percent that was not good performance. For the first month, just about everyone was in an uproar just trying to cope with all the changes. This was beneficial; they had less time to resist the changes.

Finally I started to broaden their knowledge of our final product. The engineering department and I conducted train­ing classes on the packaging machine that we sold. The engi­neers educated us on the particular sections of the equipment and their functions. Although they were experts in a particular material, I reminded them, our paying customers wanted to dialogue with us about the machine they had purchased, not just a particular material. We all had to become better at understanding total-machine functions and technology. The purpose was to make them realize the possible impact of some of their material change decisions on the function of the machine. I wanted to transform them into machine-function experts—not just partic­ular-material experts.

This tactic paid off. Our salesmen and engineers became more comfortable with my department members and invited them into meetings with our paying customers. They directly interacted with the customers and could understand their needs and concerns. When serious issues developed, we brought in our preferred suppliers to help in the problem-solving sessions. I also insisted that our people accompany our field reps peri­odically on service calls to get a better feel for what they had to go through with a customer while servicing the machine. Their feet-on-the-floor time in a third-world country, working side-by-side with a service rep, gave them an enlightened perspective of the challenges we faced with our worldwide customers.

Amazingly we all survived this massive change, and we gained enormous respect with our colleagues in the company. Custom­ers would call customer service and then ask to talk to some of my supply management people about issues.