Decision-Driven Reorganization
May 20, 2010 Leave a comment
The June 2010 issue of the Harvard Business Review has a great article on decision-driven reorganization. The piece emphasizes that reorganization should take place in an environment focused on the decisions an organization must make relative to their strategy rather than making structural changes based on a SWOT analysis. The article then lays out six-steps for conducting a decision audit and using the results to drive your reorganization.
What I like about this approach is that it focuses on making changes based on your actual business strategy needs. All too often we see companies that think the solution to all their problems is just to reorganize, as if their organizational structure is what’s driving the business. These are the same companies who reorganize every few years without actually addressing the underlying business problems that are hindering performance. My favorite feature of the six step process outlined by HBR is that it includes a decision point after step 2 that asks whether or not an organizational change is even needed!
I have never seen reorganizing alone solve an organizations core issues; addressing the business strategy and evaluating the organization in light of supporting this strategy yields much higher results than simply shuffling resources around and leads to organizational focus around core competencies rather than disruptive changes.
Better Planning
May 27, 2010 by J Robinowitz Leave a comment
This post over at 21st Century Supply Chain got me to thinking a bit about the trade-offs between planning and expediting. 90% of the expediting we see at Calyptus could be eliminated if organizations put more time and effort into better planning and increased linkages between user departments and procurement. Expediting is expensive, planning isn’t.
Time and again we hear clients tell us that the procurement cycle time is just too long to meet their needs. In some cases this may be true, but in others it is just a reflection of poor planning on the part of the end user. If you know that the procurement cycle time for your organization is 30 days, then you need to take those 30 days into account when determining when to reorder.
It can get more complicated for one-off purchases that are not part of your regular requirements cycle. But rather than accept expediting as the rule in these cases, I would argue that better planning is even more important. As soon as you begin discussions that may ultimately result in the need to make a purchase, notify the procurement group, get them involved in the discussions. If procurement knows a likely purchase is coming, they can begin their own planning process and potentially cut down on the total cycle time for the procurement once the official requisition is submitted. This is part of planning just as much as entering data into your MRP system.
Organizations spend huge amounts of time, money, and resources on expediting requirements (as 21st Century points out, sometimes there is even a “Master Expediter”), time, money, and resources that could be better spent somewhere else. In an economic environment where more and more personnel are subject to furlough days and organizations are cutting back, eliminating expediting through better planning is an easy way to save.
Filed under Commentary Tagged with budget, expediting, planning, procurement, purchasing, sourcing