Supply Chain Design Centers of Excellence are “hot” right now, offering companies the possibility of staying ahead of the competition by making Supply Chain Design a core competency.
According to Gartner, “Supply Chain Centers of Excellence are critical enablers of success in Supply Chains.” While the term “Center of Excellence” is relatively new, the concept is not. Firms have bought software, trained users, established missions and internal groups long before the COE term entered the lexicon. Some firms are realizing the benefits that a well-conceived COE provides, while others are not. Some Centers of Excellence never delivered desired results, while others performed well, only to lose momentum or relevance over time. Despite what some people might lead you to believe, there is no “Easy Button” for achieving supply chain excellence.
Why do some Supply Chain Design Centers of Excellence thrive and some fail to live up to their potential?
We have partnered with several companies to help them establish or refine Centers of Excellence to keep their supply chains aligned and at peak performance. Through our experience, there are a few key factors that differentiate those Centers of Excellence that continually add maximum value from those that do not.
1. They Have Achieved a Critical Mass
High-value Supply Chain Design Centers of Excellence often spend the majority of their time doing strategic supply chain analyses. Most of the successful COEs I’ve encountered have more than three people who can manage a project. Some projects require more than one person, or several projects may be underway at one time. COEs with part-time members, or those who are continually pulled into other areas, often do not produce expected results.
2. There is Solid Knowledge Management
- Best practices must be identified and skills developed in order to perform analyses that yield actionable results.
- Talented team members with broad supply chain knowledge are highly valuable.
- Practitioners get better with experience, and skilled employees move upward and onward.
All obvious, right? Yet, many firms who create Centers of Excellence fail to document their methodology or best practices. In doing so, they run the risk of having the group’s effectiveness diminish with the next promotion or turnover of a key team member.
3. They Are Growing a Sustainable Organization
Center of Excellence managers face the same challenges as any other manager: Is the skill and experience mix in the group right? As team members move up or on, are the remaining staff prepared to step up? Are team members learning and growing? Is the COE responding to changes in the needs of the organization?
4. They Are Focused on Business Issues and People, Not Software
I have spent a lot of nights and weekends doing home improvement projects. I have also used a lot of tools in the process. My paintbrush never painted a room and my circular saw never cut a board by itself. With that said, I have also used great tools on a few home-improvements-gone-bad projects. People – with good plans, the correct tools and the knowledge to use them – yield results.
5. They Have Executive Support and Commitment
A deep bench, knowledge management, and well-thought business continuity plans are a big corporate commitment. Successful strategic supply chain analyses require the involvement of a team of subject matter experts whose knowledge, time, and focus is often a precious commodity. Supply chain executives with vibrant Centers of Excellence know its business value, invest in group development, and marshal scarce resources to the tasks at hand.
6. They Have the Right Organizational Dynamics
If the COE is comprised of corporate staff at the organization’s headquarters, its success will require the respect and cooperation of the supply chain operations and management professional out in the field. While this is generally true of any corporate staff, it is especially true here. Realistic, actionable results require subject matter experts who can vet data, challenge assumptions, and assess factors not-so neatly contained in a strategic model on a computer screen.
7. They Have Proper Project Portfolio Management
Required skills, timelines, project methodology and team size are impacted by the answers to these questions.
- Is most of the group’s time spent on recurring analyses, such as capacity planning or service territory realignment?
- Is most of the group’s time spent on one-off projects, such as acquisition planning, new product introduction, etc.?
- Is manufacturing in scope?
- Are projects national or global?
Most high-performing Centers of Excellence do both recurring and one-off projects and are managed by leaders who recognize the different requirements each dynamic project requires.
8. They Know When to Call in Reinforcements
When project demands outstrip available capacity, or projects are quite different than those that the COE has successfully managed previously, robust Centers of Excellence supplement or augment their internal resources with external resources to solve the task at hand.
I have offered my opinion and experience – what about yours?
If your organization has or is currently considering creating a Supply Chain Design Center of Excellence, I encourage you to rate your organization using these aforementioned traits.
Tom Cisewski is a Principal of the Supply Chain Design practice at Chainalytics. In addition to leading client engagements, Tom is responsible for advancing Chainalytics’ project delivery methodology and mentoring consulting staff within the practice.
