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Painting a Leader’s Vision or Dream - Lean Six Sigma Success

A good leader always paints and explains their vision very well.

When I took over as head of a procurement division for an integrated paper company, there were three plants with over $500 million in purchases per year. I was to transform Purchasing into Supply Management with some Lean Six Sigma tools. Plant senior management, who were not supportive, decided to downsize my department at the plant where I was located from eight to four employees, starting from day one. The plant manager was not committed to the transformation attempt and actually wanted it to fail. I decided to do everything in my power to disappoint him and be a success.

At the first meeting I had with the department team, two people actually started to cry. They just didn’t know how they were going to keep up with the work. This showed me that they were conscientious enough to care and feared being overwhelmed. I pledged that within six months, they would have so much spare time; they would be coming to me, asking me to give them a project to work on to move the business ahead. They all suddenly burst out laughing at my statement either out of nervousness, fear or what they felt was a preposterous statement. I was not sure what emotions were driving the laughter but I resolved to make it happen.

I volunteered to take over buying of one of the major com­ponents in the plant. Of course, I had no idea about the workload involved in the buying process. The next day, four file drawers of paperwork for the component were moved into my office. I rolled up my sleeves spent a week creating a database to help me manage the com­ponent, which had no previous reliable information. Eventually a supplier helped me improve the database and dramatically streamline the ordering process. I then sat down with the team and explained what happened and restated my vision to dramatically reduce their non-value adding work.

I soon found out that purchasing data was scarce or non­existent. The current purchasing employees could not give me any good sum­mary statistics and were so caught up in firefighting, transaction chasing and expediting, that confusion reigned supreme. No one could adequately explain the purchase-order process (the as-is process). There were no standard operating procedures. Undaunted, I rolled up my sleeves and typed purchase orders myself just to get an idea of what happened. Their previous boss had shown no such interest in the actual day-to-day work. As a team did a process map of the purchase-order process. We locked the doors to the department while we had process-mapping meetings.

Then we all went on a data expedition, and since I knew some computer programming and could query from the company data­bases, we started to compile our data. We discovered that we had approximately forty thousand transactions or buys per year. By using a Pareto chart, we saw that over 80 % of the purchase orders were under $200. The majority of our purchases were small-dollar items. Additionally, only about twenty people made about 90% of these buys. They were our super-users or power req­uisitioners. We decided to concentrate on them and educate them about our efforts to transform the entire process. We designed a short-order purchase form for purchases under $1,000 that they could use. They participated in the design of the form. No inter­face with purchasing was required for the form. The middleman (purchasing) was eliminated. The only catch was they had to buy from a list of our preferred suppliers. If they wanted to deviate from the list, they needed to get our approval. The team started to see the potential of my vision and the approach and enthusiasm and confidence grew.

We did a new process map for the short-order form with the super-users participating. We created a manual and SOP for the super-users that included the preferred supplier list, contact information, and basic purchasing terms and rules. We posted a process flow map in the department for everyone to see.

The result was our workload was drastically reduced, and the buyers didn’t have to worry about these small purchase orders. Our suppliers remarked that the error rate on these short orders was greatly reduced. We recognized super-users who had error-free months, and who worked well with suppliers. We eventually switched to purchase credit cards for these twenty superusers, which practically eliminated all paperwork.

Finally, we had time for supplier rationalization or reduction-and-strategic initiatives. Again, we mined the data and found out that we had over 20,000 suppliers. With hard work and consolidation of buys, we got that number down to 209. We set up new preferred suppliers and greatly simplified the entire process from requisition to payment. We standardized payment terms, which greatly relieved accounts-payable’s workload— they instantly became our allies.

In four months (not six), my employees had the confidence and trust in me to come to my office and admit that they had nothing to do that day, and asked what projects could they work on to move the business ahead. Most of this progress was due to using some simple Lean Six Sigma process improvement tools. The key element was articulating the vision well, reinforcing the vision with success and never giving up on the dream.

The best part was that corporate gave us an award for the best purchasing department for the year. The vice president of purchasing with the plant manager present, presented it to us in front of the entire plant.

https://www.linkedin.com/pulse/good-leader-paints-vision-dr-thomas-tom-depaoli/

In Broken Windows Management for Business, a lot of broken windows management is learning by doing. There is ample room for creativity and having fun with broken windows management. Broken windows management is a journey not a quick fix. It remains one of the most viable and practical ways to achieve quality of work life improvement. Dr. Tom DePaoli, the author, relates some for the principles of 5S and the kaizen methodology to the broken windows management approach. Broken Windows Management for Business uses real life examples to discuss what goes right in the broken windows management trenches. Available on Amazon

It never ceases to amaze me that many organizations waste money on high priced team-building consultants and exercises to improve team work. If an organization does not have the trust of their employees or treat them well, no amount of wilderness adventures or zip-lining will build team work. Integrity is the first rule of teamwork. The military is so successful in team building because of the clear mission and the fact that soldiers know that their lives may depend on their teammates. The team often is very close for long periods of time. You must adapt to your teammates. Many of their leaders are committed to honor and commitment.

Avoid a Supply Chain Apocalypse! Purchasing and supply chain professionals, here is an alternative approach to becoming a Supply Chain Doomsday Prepper for a Supply Chain Apocalypse! In his creative guide Avoiding a Supply Chain Apocalypse - the Best of Dr. Tom, Dr. Tom DePaoli offers practical strategies and tactics, learned and tested from his purchasing and supply chain career. He does not recommend a single silver bullet or quick fix, but suggests a multi-faceted diverse approach to avoiding supply chain meltdowns. DePaoli challenges the reader to survey his best writings and to select what fits their particular organizational cultures. There is no one size fits all in the supply chain. As the importance of supply chain management grows leaps and bounds; the supply chain professional must develop multiple options and proficient tactics to ensure the continuity of the supply chain. Of particular importance is "Purchasing is the art of building relationships. It is not about negotiations, transactions, industry knowledge, market knowledge, know-how or technology. It is all about building strong relationships and gaining the trust of suppliers, customers, and colleagues. There is no easy way to get employees to trust you. One of things that I've always done is to make sure that I do what I told them I was going to do. Nothing impresses employees more than keeping your word. Another good tactic to use is to always admit your mistakes and do not try to cover them up. Employees appreciate when you invest the time and effort to train them. Make sure you have a training plan for all of your employees. Try to behave ethically, employees expect you to lead by example and to live by your word. Communicate to them daily if possible, in use as many different channels of communication as you can. "The fact is that purchasing also runs its own Research and Development (R&D) department. Suppliers, in collaboration with purchasing, are perhaps the most cost-effective R&D function in a company. Jointly they often come up with leaps in technology and transformations in products. When they cooperate, they can transform a company and its products. Breakthroughs that occur via this method should receive as much publicity if not more than those developed internally! In summary getting purchasing valued for its great contribution to revenue; requires both a bottom-up and top-down approach. Empower as many employees as possible to participate in purchasing and solicit their ideas and suggestions. Set up one-on-one executive exchanges with your supplier executives. Finally, systematically create a strong marketing plan to communicate your successes. “The book serves as a guide for the purchasing or supply chain professional to optimize their supply chain and avoid disaster. Available on Amazon