Well, it’s the start of a new academic year. A new cohort of Undergrads arriving at WBS and all must read OM as a core subject. Many, unfortunately, do not ‘get’ (or want to get) Ops, but some do. In conversations we have with alumni and through our work, the topic of talent in O&SCM often comes up as an area that firms struggle with. As O&SCM academics we always knew that it was a REALLY important area, it appears that the wider business community has woken up. So, what would we recommend to employers and potential employees as the key ingredients for a successful O&SC manager?
1. Deal with both hard and soft data
O&SCM is about two things. Understanding how to fulfil customers effectively and understanding what you should and should not do and how to do them. Some data are hard. Customer demand volumes, volatility, prices. Other data are soft, especially in SCM where relationships with suppliers can be critical. Other data are uncomfortably grey. You think you understand costs but all you have is price data not costs. That’s a bunch of different types of data that need to be dealt with and the best managers understand the different types, how they can be used and how much faith can be placed in them.
2. See the big picture
This is both vertical and horizontal. Vertically, good Ops Managers need to deal with the functions that ‘surround’ operations (typically sales and procurement) and reconcile the inevitable tensions to effectively fulfil customer demand. Horizontally, it is about understanding how what you do at the operational level affects the organisation. For example, how much inventory? Too much stymies cash flow, too little can expose your operation – and customer – to non-delivery. Decisions taken at the operational level impact the firm. Good managers understand why it does and what needs to be done.
3. Understand uncertainty and complexity
Operations and supply chains are inherently unstable and complex. How big is the supply base? What is the demand and supply volatility? Can this uncertainty ever be mitigated or does it have to accepted? Being able to understand this complexity and the interdependence will allow better decisions to be made. For example, if you have an unseasonably warm October (uncertainty!) and there are no summer fashions in store, how do you get your Eastern European supply base to change it’s schedule and deliver in a short time frame without affecting other deliveries (complexity!)? This leads me onto the next thing.
Ops and Supply Chains are dynamic. There is volatility at both a customer, supplier and resource level. Customers can increase or decrease orders on a whim, a supplier can go bankrupt or supplies don’t turn up (or are wrong when they get there), and resources, both human and equipment don’t always behave in the way you expect. All of this means that if you want to work in Ops and Supply Chain you need to be able to prioritise and reprioritise (and reprioritise again) to deal with the uncertainty and complexity.
5. Seek a ‘global’ rather than local solution
Too many times we see functions that place the emphasis on the function. This can lead to dysfunctional behaviours and dissatisfied customers. Occasionally the Ops and Supply Chain function(s) may need to keep a hit to keep customers happy (your 3PL will love you for all of those expedited orders). But this means that nearly everyone is happy(ish).
6. Cope with responsibility without power
More often than not, people within Ops and Supply Chains have lots of responsibility. Most firms spend over 75% of COGS on ‘supplies’ and Ops is what allows organisations to create ‘stuff’. So, important right? But, more often than not, this responsibility comes without power. Most firms have COO’s, many firm’s have CPO’s, but that’s a limited amount of power for all that responsibility. Especially given the impact that Ops and Supply Chain plays on the financial performance of an organisation and customer satisfaction. So accept it, and deal with it. Power comers with expertise, not role.
7. A deep understanding and passion about O&SCM
So few of our students want to work in Ops and Supply Chain. But lots of them want to go into Management Consulting. The majority want to go into Banking but Investment Banks from our understanding overwhelmingly hire highly numerate grads (Maths and Physics mainly). Part of this is that Ops is viewed – or possibly we teach it – as a very factory or process centric subject. Part of this is is that it doesn’t seem particularly cool. I would argue that if you want to go into Consulting, understanding about process design and objectives, standardisation and effectiveness, in addition to improving customer satisfaction are ALL critical. This is understanding that O&SCM is a vital area for all organisations. In addition, if you are going to be doing it, and living with it, you need to be passionate about it. You need to be fall in love with it again and again, even when you have a bad day.
8. Deliver from day one
Seems pretty logical right? Ops and Supply Chain Management is about effectively fulfilling customers (both internal and external), so if you are going to work in it you need to be able to deliver. And this needs to be from the start. I also suggest that this needs to be done consistently and pro-actively without starting any fires. Consistency is key…
9. Taking a long view
This is slightly paradoxical given that I have stressed how much of O&SCM is dynamic and complex. But, improvement takes time. More often than not many years. So, deal with the day-to-day but also never lose focus of how long real change takes. One of my favourite anecdotes is that it took Toyota decades to perfect and embed Lean. Why do we expect to be able to do it inside 12 months? By taking a long view you can deal with this.
10. Build relationships
This is the glue that holds everything together. And, these relationships need to be both internal and external. Relationships allow you to understand uncertainty within the customer and supply base, and allow you to create the global solution within a firm. Without them you have limited information, limited knowledge and no goodwill. People who want to work in O&SCM need good interpersonal skills in order to build lasting, strong relationships.