The Supply Chain Accounting function of a multi-national pharmaceutical company was responsible for inter-company trading. This involved setting up supplier data for all traded products, invoicing to local operating companies and calculating inter-company profit. The operations were spread across onshore and offshore locations.
The department managed very complex processes and had day to day interaction and dependencies with hundreds of finance and supply chain teams across the globe. Large volumes of work were processed daily including data set-up, invoicing and inter-company profit release. Teams were managed as distinctly different teams with little interactions across different parties. Failure demand was processed as the daily norm in each team to manage the workload and react to customer queries. Problems were very difficult to document and understand, with little time available to improve ways of working. In order to manage the service more proactively, there was a need to change the thinking of how work was managed and how failure demand was eradicated not just processed. The barriers between operational teams needed to be challenged and a more collaborate approach to service improvement was required.
The chosen approach was a tactical mix of capability building, management system implementation and measurement redesign. These three elements were delivered by looking at the end-to-end service as one process, with operational teams working collaboratively to reduce failures and improve customer service. This included:
- An A3 problem solving structure was created and training (both classroom and E-Learning) implemented at all levels creating a capability for everyone to solve their own problems using a proven methodology and tool set.
- Tailored visual boards with daily performance huddles for every operational team focusing on planning, performance and continuous improvement allowing issues to be raised, discussed and solved.
- Twice weekly cross-department management walks to each operational area focusing on issues not solved at team level and needing collaboration.
- Problem solving progress shared by individuals at monthly knowledge share event promoting knowledge sharing and collaboration across teams.
- The redesign of the existing performance measures to focus on delivering the end-to-end service, replacing departmental service level agreements.
- Failure demand was reduced, in many cases by over 50%.
- Newly created processes with fewer handoffs across teams were implemented as a result of a completely new focus on service performance.
- 30 long standing issues were resolved within the first 3 months.
- Efficiency improvements were achieved across teams with a typical incremental improvement of 10% every 6 months.
- An engaged and motivated workforce was created.
- A show case visual management environment used by the client to promote this approach to other areas of the business.