Improving Decision-Making and Execution at "Selling Direct"
- Corporation A's "Supply Chain Development Organization" (SCDO) was intended to orchestrate the corporate-wide "Selling Direct" initiative to reduce the dependence on third-party sales channels. This required coordinating supply chain activities across product areas, regional organizations, and suppliers.
- In addition to a small core team fully dedicated to SCDO, the organization worked through dotted-line members in the product development and regional supply chain organizations as well as the regional supply chain management and marketing organizations.
- The CEO's question: Does the strategy get traction? Does SCDO work?
SCDO Key Findings
- Finding #1: SCDO has the strategic mindset to drive and manage cross-entity initiatives, but lacks recognition and support in the regions and business units.
- Finding #2: SCDO has weak understanding of the regional needs and lacks relevant project information
- Finding #3: SCDO does not have adequate decision-making authority. In case of conflict, individual business units override the decisions of SCDO.
- Finding #4: Sales (responsible for customer interface and demand forecast) is not integrated in the decision-making process causing unnecessary conflicts and delays
- Finding #5: "Selling Direct" is not the strategic focus of the business units. The lead business unit is not committed to support other business units and is coordinating its own activities with regions directly rather than following SCDO’s game plan
Organizational IQ Deficits Explain the Causalities Behind the Slow Execution of "Selling Direct"
Example of SCDO’s Strategic Mindset: It is Easy to Win Approval of New Ideas…
... but Execution is Hampered By Lack of Clarity Regarding SCDO’s Strategy...
... and Significant Delays Are Caused by Disagreement Over Decision Making Roles
Action Taken at SCDO
- Ownership and decision-making authority for the "Selling Direct" initiative was given to line management overseeing broader parts of the corporate organization (see following slides on decision architecture)
- The sales organization was included in the decision-making process
How to Build An Effective Decision Architecture for Supply Chain Management
- Supply Chain Management Hub
Coordination of key back-bone initiatives (e.g., Selling Direct initiative)
1.1 Supply Chain Management Hub-Bus. Unit-Regions.
Coordination of end-to-end supply chain strategies
- Global Sales
Standardization of customer-facing processes and tools
2.1 Regional Sales
Ownership and accountability for demand forecast
- Global Operations (Regions).
Standardization of manufacturers / suppliers facing processes and tools
3.1 Global
Procurement information / Planning /Ops strategy
3.1.1 Regional
Fulfillment (supply and demand match)
- Product Generation Organization
Coordination of key back bone initiatives (e.g., Selling Direct) throughout product Generation organization
4.1 Strategic Supply Chain Management Organization.
Product Generation supply chain operations.Suppliers/Manufacturers qualification.
4.1.1 Product Line 2 .
Supply chain engineering integrated in manufacturing
New Decision Architecture: Coordinated Between Regional, Sales, and Product Generation Units
New Decision Architecture Demonstrated at the Business Unit and Regional Organization Levels
return to Strategic Execution