Learning From Leaders

Let’s examine three very different companies from a cross section of industries; automotive, high tech and beverage for any transferable lessons.  What do they have in common?  What can they teach us?  There is a good chance you might find all three in your own home or at least within 100 yards.  They are Toyota, Hewlett Packard and Anheuser Busch.  All three are recognized by AMR Research as Top 25 Supply Chain and their supply chain lessons are chronicled for our benefit.  Read on for a summary and leverage the lessons in your own supply chain.

Toyota provides a window into Lean Production Systems.  Their innovative approach to manufacturing delivers results the balance of the industry has yet to match but above all they demonstrate the power of learning from versus losing to supply chain challenges.  More than fifty years ago this Japanese manufacturer, desperate to catch up to US competitors reaping the benefits of mass production efficiencies, decided that small volumes would not limit their competence and growth or capacity to learn and outperform industry giants.  The evolution of the Toyota strategy is born of struggles that you might be facing today; quality, cost, revenue.  Their own prescription to turn around performance was a Lean Diet, captured in the table below.

Institutionalizing the 5 S’s and 7 Wastes contributed to a culture and a relentless approach to drive Toyota through their production problems.  Today they are among the top three and gaining ground every month.

In fact Toyota continues to set the curve as they confront their current limitation that is challenging the supply chain; speed of information.   A significant IT initiative aims to reduce inventory 50% and increase the speed from receipt of order to fulfillment by 40%.  By example, they continue to inspire and now win with improved agility.

Hewlett Packard is another great story of learning from a leader.  Their own self taught lessons have seeped into their corporate culture.   They have institutionalized innovation, learning from every product and customer experience and in particular extracting powerful lessons from their $50B supply chain and use of applications. 

Companies the size of this leader often suffer from their own expansive structure and typically slow investment or technology adoption processes.  Hewlett Packard is unique in its approach to solving and learning from challenges.  They have mastered the process of dissecting a problem and identifying appropriate solutions and tools for better results.  In fact they have used as many as 7000 applications.  HP continues to refine their active applications with a target of 1500. An article in Managing Automation  describes a sample of initiatives that include HP developed as well as purchased tools that contribute to their success and knowledge base.  They have supply side analysis programs, procurement risk management tools for their demand forecast, systems from Invensys and SAP for buy/sell programs and enterprise resource planning.  HP has also received public recognition for adopting advanced technologies for supply chain network design that models various configurations and strategies enabling quantified decisions.  Consistent with characteristics of leaders, this company remains open to the potential of technology as an enabler building on their knowledge and competencies.

A further signal of the value they assign to learning is the practice of combining units in transition with world class operations.  This practice creates a perpetual cycle of knowledge transfer and improvement.  Units that have yet to reach their peak fall under the guidance of the top performers.  As students of winning teams, they accelerate their path to success.  Simultaneously, the veteran team takes the role of teaching.  Any teacher will tell you that the responsibility to impart knowledge drives a deeper understanding of the lesson for the teacher themselves.  So HP teachers and students find themselves in mutually beneficial and continuous learning environments.

Anheuser Busch through their "born on" date innovation taught beer drinkers everywhere the value of freshness while educating themselves on the impact of JIT principles.  This visible initiative delivered significant results, reducing inventories by a third in the first quarter and saving $10 million annually.  Behind the scenes a multi disciplinary team committed themselves to breaking down the complexity of their product offering and re-engineering their supply chain.  This analysis lead to a recognition of two distinct businesses within Anheuser Busch; high volume and low volume "growth" products and a number of strategic initiatives necessary to succeed on both fronts.  They began tackling production and inventory deployment, moved on to transportation and eventually order fulfillment.  Anheuser Busch remains a respected player in their industry, offering the valuable lesson of insight that comes from eliminating waste and streamlining processes to deliver the market fresh product while ensuring a competitive and fresh approach to their business.

Each of these companies faces common supply chain challenges but often with a greater magnitude.  Their response provides visible examples and inspiration that even in the most complex environment we can learn from experience.  It is a matter of choosing to allow for some reflection on what can and should change and committing your company and resources to re-engineering in the pursuit of a different result.  What lessons should your company begin learning from for better supply chain performance today?