Transforming your Business through Supply Chain Excellence
You may have heard the term “Operational Excellence” this term has been used to refocus a business when cost, lead time, quality or any other operational function was not meeting specific goals. It was also used as a motivation for operations that performed well in spite of the external tough economic times.
Supply chain excellence (SCE) is not much different. The goal of supply chain excellence is to focus the organization on reducing inventory, lead-times along with improved planning cycles and inventory turns. SCE is also improving inventory accuracy and visibility. When an organization is focused SCE they have to include the extended supply chain, meaning they have to look beyond just the four walls of their business. This requires you to look beyond your tier one supplier. An example is looking at a steel mill that supplies steel to the service center that process’ the steel that you eventually purchase for your manufacturing needs.
Understanding this extended supply chain will enable you to begin to your journey of supply chain excellence.
“For every action there is a reaction”
In my own experience when cutting inventory without fully understanding the impact on the extended supply chain resulted in major debacle. The outcome was lost production and ultimately lost sales because we failed to fully understand the extended supply chain and the impact on our business.
“Fear of Proper Planning”
Do not be afraid to include your supply partners in your forecast planning. They have insight into areas that you may have never considered.
“21st century planning”
In this day and age the resources that are available for proper planning give any organization no excuse for poor planning. The Sales & Operations Planning is a process of bringing together a cross functional team that has visibility across the entire organization in meeting customer demand in the most efficient and profitable way. This process is nothing new, but will still have organizations planning their day to day operations in silos. This type of planning gives no visibility across the organization or the extended supply chain.
“Voice of the Customer”
Who is listing to the customer? We sometimes overlook the obvious that the customer is part of the extended supply chain. They are the reason why a company exists but we so often treat them as if they exist because of us. The customer can provide vital data that will help reduce inventory and lead time.
“Win Win”
The approach for both suppliers and customers should always be a “win win” opportunity. It’s amazing the attention you get when there is gain to be shared for both sides.

“Leadership through Influence and not Influence Through leadership”

I believe the Bible has many lessons on leadership and it provides the ultimate example of the greatest leader known to mankind “Jesus”. Jesus is God who became a man to die for our sins but He was also the example for us to follow. In the span of three years He led twelve men and changed the world. Two thousand years ago Jesus taught servant leadership, those same examples He taught then apply to the challenges we face today as leaders.
Sheep Are Led
Oh come, let us worship and bow down; let us kneel before the Lord our Maker. For he is our God, and we are the people of His pasture, and the sheep of His hand.
--Psalm 95:6-7
Cattle are driven; sheep are led; and our Lord compares His people to sheep, and not cattle.
It is especially important that we know the law of the leader--that he can lead others only as far as he himself has gone....
The 21 Irrefutable Laws of Leadership by John Maxwell. In the first law–the law of the lid, John Maxwell talks about that there is a lid on a person’s leadership ability and this lid determines his level of effectiveness. The lower a person’s ability to lead, the lower the lid on his leadership ability, and the lower his effectiveness. On the contrary, the higher the leadership ability, the greater the effectiveness. Your leadership ability always determines your effectiveness.
The leader must have the experience and believe in the mission if he wants to lead or he will find himself in the impossible position of trying to drive his people to change. For this reason he should seek to develop his own ability before he attempts to lead others....
If he tries to lead them through a task or challenge which he has not actually experienced nor does he look to create an environment that allows others to rise up and lead the team through the challenges he is destined to fail. In his frustration he may attempt to drive them; and scarcely anything is so disheartening as the sight of an angry and confused leader using threats in a futile attempt to persuade them to go on beyond the point to which he himself has attained....
The law of the leader tells us it is better to cultivate our character as a servant leader than our voices. It is better to know that our hearts and minds are in the right place than the position or title we hold, if our hearts and mind are in the right place this is the foundation of true leadership. I believe in leadership through influence and not influence through leadership.
There is a saying, “it is more impressive to see a flock of sheep following a lion rather than a lion following a flock of sheep”.
We cannot take our people beyond where we ourselves have not been, and it becomes vitally important that we be leaders of character in the highest sense of that term.
Joe Perillo

“The Purpose of the S&OP Process”
Lean is about continuous improvement, elimination of waste and sustainability by establishing process’ and standards. The S&OP process is a “lean tool” in the form of a process that will help reduce and control raw material & finished goods inventory, reduce or eliminate unnecessary overtime, control lead time when business is increasing or decreasing and manage our capacity better without turning away sales orders. All of these factors, if not controlled or go unchecked will erode your bottom line.

I was asked join my current company by the President & CEO as the Director of Supply Chain, Logistics and Lean Office. In this role my challenge was to help change the culture to a more professionally managed organization. In doing so I have introduced several objectives that will help an organization achieve these goals and allow for profitable growth. The S&OP process is not a small side project it is a vital part of the business because it involves every aspect of your business, from Sales, Finance, HR, Manufacturing, Supply and Service and will chart the course of direction for any growing organization.

Without direct support from the executive leadership the S&OP process will not be successful. It requires full participation at all levels if it is treated as a onetime exercise or people feel they have the option to not contribute or get involved, it will not be successful.

“I recently was reading a Supply Chain Daily.com article that referenced an Article in Metal Miner by Lisa Reisman 1960’s comparison of the steel mill actions of today. (Editor’s Note, here is the link to that post entitled Steel Industry Musings from the 1960 Recession) I loved it! I did a similar comparison although not as in depth as Lisa's, mine was just a 5-year trend. The actions were not much different in what happened in both demand and pricing. In several discussions with my CFO we tossed around the notion of the mills might be playing with collusion during these desperate times. I then came across “The Commodity Bulls are Back in Town—A Return to Commodity Price Inflation an article by Jason Busch from Spend Matters. It even referenced a white paper on the events of possible collusion evidence from the late 19th Century Basque Iron and Steel Industry. I guess you could say the steel industry is both cyclical and predictable by their past actions during economic turmoil.
Over the past 18 months I have introduced my company to historical trend analysis in both our own sales data along with commodities that impact our business. “They’re hooked”! You might think that this would be the norm but this was not the case. Profit and sales backlog dollars were the main focus of any historical tracking. By collecting this data and analyzing the trends we were able to make better decisions and subsequently we were able to decrease cost and inventory which increased cash flow."