Learnings on Operations Modernization

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Supply chain operations cover a broad scope of tasks that range from sourcing to delivery of products. Mechanization of the operations would improve productivity significantly. To be successful with modernization, user buy-in and adoption are critical.

A utility undertook a supply chain operations modernization initiative. It took over a year for implementation and the lacklustre outcomes generated valuable learnings.

Understanding the nature of work

Automation is meant to have an application perform tasks based on user input. The solution then uses the data to initiate work activities.

For the utility, Purchasing relied on work schedules to plan materials acquisition. The premise seemed logical. However, for maintenance work that did not have a fixed schedule, the need to update a shifting schedule became a nightmare. It was impractical. The end result was workarounds. Inconsistent input on schedules and materials needs led to sporadic supplies shortage.

Focusing on needs of users

One of the main advantages with technology is data capture for operations management. This hinges on consistent behaviors of the users. Internally focused solutions are bound to get push back.

The new ERP provided users in various departments a status report on materials availability. The report showed availability for a snapshot in time. There was no information on future availability when items were on backorder. It was a daunting task for the users to review the report, then contact another person to determine when the next shipment would arrive. The report was useful for Purchasing to replenish inventory but served little purpose for the users.

Designing intuitive user interface

Consumers have become adept at click and tab apps. They expect business applications to operate in a similar fashion. User interfaces that require elaborate effort to operate are turnoffs for adoption.

The ERP user interface was clunky. Users struggled to navigate through the screens. There were not many help instructions when they were stuck. Infrequent users refused to use the application. They demanded a super user to be appointed to manage any work that required ERP input.

Incorporating buffer in assumptions

Most applications incorporate business rules to initiate actions. These rules include quantified thresholds, compliance, and deadlines. Choice of proper actions is subject to how well these rules are set.

When Purchasing set the reorder points for materials, it relied on historical consumption and future demand submitted by business units. Due to incomplete demand submissions by the users, reorder quantities were out of whack. The utility’s suppliers had to send back numerous orders that looked wonky. They were good catches but some fell through the cracks. Crews were caught with stock-outs.

Closing the gap between planning and execution

To design a smart solution, rules and assumptions need to emulate the real world closely. This applies to work planning and work execution.To design a smart solution, rules and assumptions need to emulate the real world closely. Click To Tweet

The utility had many departments prepare work plans for new construction and maintenance projects. Planners created work plans at a high level. Purchasing then used the high level work plan to schedule delivery of materials requested. When a major program called for a high volume of parts but had an implementation schedule that spread over months, pallets of parts were delivered all at once. Local warehouses did not have the space. Worse yet, the parts could have been consumed by other crews.

Modernization is not a technology play but deployment of technology to support work, facilitating well integrated execution. As a result, the design of a solution ought to be intuitive, performing tasks by applying sound, practical logic. The utility company learned the hard lessons when it had to devote significant efforts to enhance functionalities after implementation to entice adoption.

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