Project Marriagement

August 10, 2015 2:53 pm
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For those of you that know me I am super organised, so when it came to planning our wedding last year I was in my element.

As we walked down mountain Ben Vrackie in Pitlochry post-engagement in April 2014 we had already started making plans, verbalising our project charter and scope, and set the date for the summer of 2014 – only 5 months away.  We soon identified our first challenge in that we didn’t have much time, a bit like when your manager says  “I need that new product running on the line in 2 months’ time, at full productivity with no quality defects…”. The pressure was on.

Considering the bank of tools and techniques I’ve employed with clients, I resolved that the first stage of the project was to build a schedule in the form of a Gantt chart (yes that really happened) with actions, owners and deadlines. I even used conditional formatting to highlight if a task was done, in progress or not done…

The budget was the next big decision, planning a wedding isn’t about saving money (an obvious focus when we consult with our clients), but it is about being sensible and ensuring that money is prioritised towards what is important, rather than frivolous extras.  With pie charts, we were able to understand where the biggest spends would be, and look at ways to reduce these and make sure they remained within the original budget… although the cost of my wedding dress remains a mystery to my husband.

With Gantt chart in hand and a verbalised Project charter, we had weekly Skype calls with our key stakeholders (parents, bridesmaids and groomsmen) for a wedding ‘catch up’ (an informal Project status update report), ensuring that their tasks were completed and there were to be no surprises on the big day – my dad still managed to catch me out by organising my sisters, sister-in-law and best friend to sing ‘The Rose’ during the signing of the register.

The other essential was managing parent’s expectations and demands – that ever-so-tricky guest list: who to invite, which cousins to draw the line at, were we going to invite parents’ friends? Sounds somewhat similar to managing our stakeholder’s expectations during a project doesn’t it? We managed this by communicating early and ensuring everyone understood our reasoning, with a little help in the form of a church with small capacity.

Delegating effectively proved invaluable, so with time constraints, a budget, tricky suppliers and stakeholders, wedding planning can really be likened to managing a project within a business.

Did the wedding come off? Of course it did – best day of our lives!

By Sally Wood, Coriolis Consulting Pty Ltd

Picture credit: James Charlick Photography

The bad decision devil on your shoulder

July 31, 2015 10:33 am
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Management is essentially a process of making a large number of decisions on a daily basis. Whilst many of these decisions can be quickly and effectively made using a judgement call from the individual, the solution to key strategic issues may not be so easy.

Decisions that a leader needs to make regarding these issues are significant, they involve multiple dimensions of value, potential options and stakeholders, and the potential outcomes of these decisions can be unclear at the time.

To ensure they make the right call, senior leaders use a range of decision-making tools and techniques. But despite using the best modelling and data analysis, key influential leaders will inevitably make bad decisions from time to time.

Perhaps there might be a little devil on their shoulder that leads them to a damaging decision? Very unlikely, although some of us might debate that, given some of the leaders we have encountered. So the question must be asked, what causes otherwise highly intelligent and capable leaders to make serious errors in judgement on key strategic decisions? The answer may not be as simple as we all think. Key research [1] shows that these errors in judgement are caused by two key neurological phenomena living within all of our subconscious; pattern recognition and emotional tagging.

Pattern recognition occurs when a decision maker is faced with a situation that is similar to a decision that they have made (or seen made) in the past. Whilst this can and does lead to a lot of sensible decisions being made as a result of learning from mistakes, recognising similarities between the two situations can give the decision maker the feeling that they understand the situation better than they actually do. This feeling of familiarity may cause the decision maker to ignore key information regarding the situation that is contrary to what they believe should be the case. This leads the decision maker to a decision that would not have been made based on completely objective analysis. A simple example of this would be when a person is buying a car and having to decide between a Hyundai and a Volkswagen. The buyer, who has previously had a bad experience with the lower priced car, may recognise a correlation between price and quality and therefore choose the far higher priced Volkswagen (ignoring the fact that the Hyundai car has outperformed Volkswagen in quality and customer approval ratings).

Emotional tagging is the process in which emotional information from a person’s memories or experiences attach itself to a situation and tells a decision maker how they should feel about a certain decision. This can lead to bad decisions, as the decision maker may feel negatively about a decision that all available information is suggesting needs to be made (or vice versa). An example of this may be when an executive is faced with a situation of closing down an underperforming division and the choice is between a division they used to work in and a division they didn’t used to work in. The executive may favour one over the other based on the emotions they feel regarding the decision (again, ignoring key information that may contradict their decision).

So, how do we stop ourselves from becoming our own worst enemy? By recognising bias and removing it from the decision-making process. The same research that identified the two key forms or subconscious bias also identified three key ‘red flag’ conditions that can be used by managers as indicators to identify when a decision maker may be adversely influenced into making a bad judgement call. These conditions were:

  1. Inappropriate self-interest (the decision adversely affects the individual making the decision)
  2. Distorting attachments (the decision affects an area, population, place or product significant in the decision makers past or future)
  3. Misleading memories (the decision has similarities to a situation previously experienced by the decision maker)

By implementing decision making tools and by gearing analysis techniques toward fostering debates between stakeholders and decision makers, these red flag conditions can be identified and managed. Robust governance involving stakeholders with no emotional bias or conflicting interests should be brought in to the fold to safeguard the key decision making process from these red flag conditions. Exorcise the bad decision demons and favour the business angels of logic, numbers and facts.

Written by Sam Byrnes

Ref: [1] Campbell, A & Whitehead, J & Finkelstein, S, ‘Why good leaders make bad decisions’, Harvard Business Review, February 2009 pp 2-5

Packed into the wrong format

July 8, 2015 8:35 am
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How did we end up with the packaging formats that exist today?

There are three formats in particular which drive inefficiency, and if the market was not so heavily invested we could change these tomorrow…

Cages for Milk

The milk industry has an expensive Shelf Ready Packaging system that involves the use of metal cages. In the factory, machines that fill these are fully automated and quite often so are the Cold-store picking lanes. Yet this seems to be one of the biggest causes of downtime. Moving cages tend to get damaged which creates downtime, peak periods see a shortage and the continued replacement and repair costs mount up, not to mention the supply chain that is required to circulate.

Shrink wrapping could be one answer, but this would need combining with some form of shelf ready packaging, perhaps a cardboard version of the current cages with trolley wheels to provide mobility.

Cereal Box

The cereal box has stood on its soap equivalent for years. Supermarkets would not be the same without the endless walls of wasted cardboard. Manufacturers have invested in automation and have locked us into this until not only the depreciation drops off and the asset is ready for replacement, but when this and the customer perceptions align which seems decades away.

Yet a few companies have moved away from the outer box in search of a modern packaging format with reduced material costs, gaining higher processing efficiencies and removing equipment costs. Just like our award-winning friends at Jordan’s Cereals.

Glass Jars and Bottles

Heinz made the switch, utilising a “squeezy” bottle to sell the concept over a decade ago, with Marmite (for our Aussie friends Vegemite) and some honey brands following suit, but most of our pasta sauces and jams remain in expensive glass. That is without mentioning beer which some brewers are starting to consider. The 2012 Olympics saw Heineken provide beer in a PET format for the first time, but would you enjoy a cold refreshing beer in the garden quite so much if it were served in a plastic bottle?

Could our 2020 vintage champagne have more than just a plastic cork? Probably not but there are three reasons things may change.

Consumers – Some changes might be driven by new formats, reduced packaging and a better overall impact on our Carbon footprint. Yet this also might be what holds us back the most.

Innovation – Investing in R&D to find new processes, balancing the writing off of assets against leading the market. But equipment manufacturers are unlikely to want to revolutionise a cash cow and lose their market share, we need to encourage innovations across boundaries.

Cost – A point in time may come where the manufacturing savings across efficiency, materials, waste and distribution means the change is a necessity. Rather than waiting for that to happen and being on the back foot, we would suggest you know what that point is now and start planning for it.

Creating value together

October 20, 2014 1:08 pm
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The word “vertical” when discussing integrated supply chains sounds like a buzz word. Vertical sounds high, or turned on its side, long. Are we too focused on vertical when we look at improving the supply chain through collaboration?

Strictly co-ordinated supply chains have gained in importance in the agri-food business sector. This has been the trend for the last two decades, yet are we really seeing the synergies expected and are we now too fixed on the status quo of collaboration?

Participants in the 2010 CCM survey said that only 2 in 10 of their collaboration efforts delivered significant results. If companies can’t make collaborations work, they will not only fail to achieve the potential benefits that supply chain collaboration can provide, but they will also risk destroying the enthusiasm for further attempts.

Supply chain collaboration can be divided into ‘operative’ and ‘strategic’ components. While operative chain management is designed mainly to obtain parity with competing food chain networks, strategic chain management is aimed at creating an advantage over competitors.

The majority of firms in the food industry are using supply chain management in order to gain efficiency by reducing stocks, optimising logistics, and reducing waste through out of life. The importance of the consumer has provoked the logistic-oriented approach to add the concepts of ‘efficient consumer response’ and ‘collaborative planning, forecasting and replenishment’ addressing in part the demand.

We are yet to see many companies truly exploring strategic collaboration to shorten the supply chain, all current activity could be said to turn the current cogs faster.

Collaboration through joint value creation

“The relationship between partners is driven by the need for profitability and by strategies that are congruent within each company involved and within the relationship” (Shaw and Gibbs, 1995).

As a concept this sounds great, but do supply chains really understand the cost drivers and opportunities that may exist through the end to end value chain and how they could impact this? Recent global economic pressures created the need to look internally and focus on spend became king, meaning companies did not look outward and forgot about supply chain collaboration and value creation.

Supply chain collaboration does not always need to be mutually beneficial for it to be worth progressing, its needs to be beneficial to one and break even to the other. By working to these rules the value chain that you operate in grows in strength and ultimately you benefit.

Reducing costs in your customer’s production process increases their competitive advantage, this means they can either grow or have a more sustainable business model which now benefits the whole supply chain and increases the total value of the chain.

How many businesses truly sit down with the whole value chain to ask the question of ‘how could we change the way we work?’ You may know value add and non-value add processes in your own business, but do you know that of your customer or supplier and how you could work together to make an impact?

Successful collaborative ventures are not characterised by drawn-out discussion and protracted negotiation.  If the idea is intrinsically robust then it ought to be obvious to the prospective partners.  Hard analysis and fluent decision-making are required in these circumstances.

Another vital ingredient of a successful collaboration is stamina. It may take time and effort to overcome the initial hurdles and make a new collaboration work. Both parties need to recognise this and build an appropriately long-term perspective into their goals and expectations for the collaboration. This means including metrics that review performance beyond the first activity, as well as conducting some joint, long-term planning. This will mean that both partners can gain an understanding of one another’s longer-term objectives and identify a roadmap of initiatives which they can work on together over time. Such planning helps companies to break out of the short-term-project mentality that can limit the beneficial impact of collaborative efforts. Nevertheless, partners must also take care to ensure that they are doing everything they can to capture any available quick wins so that collaboration starts delivering value as rapidly as possible.