Cover Story: Crafting Success in Supply Chain Transformation

Leading crafts company Creativity Inc. has found that, with a bit of trust and a lot of teamwork, a little consulting can go a long way in addressing supply chain pain points


High-level executive sponsorship was an obvious success factor for the project. From the start, McLain made it clear throughout the company that the supply chain transformation was a top priority. "The initial notice that went throughout the company came from me," he says. "I don't typically do that, but I wanted to indicate to everybody the importance of getting this up and running smoothly and correctly." McLain also gives Lazarou a great deal of credit for successfully leading the rapid transformation. "He hit the ground running and brought the group along with him," says McLain.

Dr. Birou says that Lazarou played an important role in championing the many changes that ADR's consultants were recommending. That's critical, says Dr. Birou, when a consultancy, acting as an external change agent, is calling for significant transformation within an established organization. "Nick could see the bigger picture, he could see the vision," she says, "and you need somebody like that who has internal connections. He had relationships throughout the company, including sales, operations, product development and in purchasing, and people within the company both liked and respected him." Adds Kiser: "We're the ones that come in and stir up the bee's nest. We're really turning people's world upside-down. But then Nick can say to them, ‘OK, we know these guys are really challenging us, but here's what we need to do.' So people will come to rely more on their leaders, and that helps the organization to bond together."

Setting Goals, Building Trust

For his part, Lazarou says the key to getting the supply chain team to adapt so quickly to new technology, new processes and a new organizational structure was empowering employees to do what they were good at, while at the same time setting clear goals. "I made the team part of the solution," he says. "Once we identified who would do what role and everyone's strengths were being emphasized, I gave them ownership immediately. Once they had an objective, strengths and ownership, we started to see improvements. I was there as a mentor, and my responsibility was to mitigate risks." Lazarou also notes as a point of pride that Creativity was able to re-engineer its supply chain function with zero attrition.

ADR's most important contribution, as Lazarou sees it, was in helping Creativity to take a more strategic view of its supply chain. "They have actually helped us to view our purchasing functions as a supply chain continuum that starts from the factory and ends with the retail consumer," Lazarou says of the consultants, "and they have been very instrumental in the education process of how to transform a supply chain." Lazarou adds that good consultants must balance politesse with doggedness. "They were very respectful of our time and our dynamic, and they had a tremendous degree of professional courtesy. But they were highly motivational and tenacious — they knew we had a huge hill to climb, and they didn't let up on us."

Dr. Birou emphasizes that consultants, to be successful with this type of major transformation, must take the time to build trust within the organization that they are seeking to change. "We talk about trust a lot in supply chain, but trust doesn't just happen; it's something you have to earn." Dr. Birou talks about two levels of trust: professional and personal. Professional trust involves demonstrating the ability to deliver on what you say you are going to do — and then delivering it, on time and at a high level of quality. Personal trust, on the other hand, involves a more emotional, human-to-human connection with the people with whom you are working, whether colleagues or customers. Both are necessary to ensure the success of a major transformation project, particularly one with such a short timeline. The professional trust gives you the confidence that all the players will make their contribution, while the personal trust is what prompts you to stay late at work to help a coworker avoid falling behind, thereby ensuring the success of the overall project.

With the issue assessment and supply chain transformation completed, Creativity has moved into a third phase of its project with ADR, focusing now on cost containment. The consultancy has been assisting Creativity in identifying products and product components where cost savings might be possible, and then helping to craft strategies for collaborating with vendors to optimize processes and share in the savings. This effort already has yielded significant cost reductions for the company, and Creativity is pursuing further savings, with double-digit containment goals for select categories in 2006. In addition, Lazarou says that Creativity will be looking to further reduce its inventory and to increase its collaboration with customers for shared benefit.

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