5P’s Framework for Supply Chain Transformation

Editor’s Note: Ruchir Gupta Business is the Planning Manager TMX Philippines, Inc.

Presented here is a fundamental & time independent framework to analyze supply chain issues in totality and propose sustainable, rejuvenating solutions for Operational, Tactical and Strategic aspects of supply chain. We call it the 5 P’s framework for supply chain transformation. One could call it a CSCO’s cheat sheet of key questions to ask along 5 dimensions which comprehensively dissect & provide a sustainable solution insight for any supply chain situation which appears to be not right.

1) People Human capital & the organization structure analyzed along

1. Ability Do People (Individual contributors, Managers & leaders) have the required talents & supply chain skills in the context?

2. Willingness Are the people motivated or is something hampering their willingness to contribute?

3. Authority Is the power balanced or the organization structure itself is hampering the right decision making?

2) Performance Measures: Driving the behavior of “People” & “Processes” analyzed along.

1. Fairness to ensure a uniform code of conduct

2. Balance to ensure one cannot unreasonably override another

3. Relevance to ensure the right things are measured

4. Correctness to ensure correct calculations are used.

5. Timeliness to ensure its not too late when issues come to highlight

3) Processes: Represented by Tools, Methods & Ways of working analysed along

1. Relevance

2. Efficiency

3. Effectiveness

for the business model. This dimension includes Strategy, Planning & Execution processes including Strategy cascade & Risk Assessment that are often overlooked in decision making.

4) Process Parameters: Includes attributes like MOQ, Lead times, Capacities etc which needs to be revisited periodically in respect of the fulfillment strategy, product lifecycle and external environment changes. Key question to ask is if current parameters driving the processes are correct?

5) Period: The time characteristics of the Issue as well as proposed solutions analyzed along

1. Frequency Is the issue chronic or a onetime event and how long will it last?

2. Validity What is the validity of problem at hand and the proposed solution?

Critical aspect of using the framework is to look at all dimensions together because they have far reaching & often sublime linkages which can determine the outcomes of transformation initiatives. These connect the lower most level of activity done by a clerk to the Cost, Revenue and Profitability picture managed by CEO.

The framework cuts across Hierarchies, Industries & Operating models. A critical analysis of all 5 dimensions together will always pinpoint the real root cause to throw out a sustainable solution which can poise the organization for sustained, healthy growth. Often this brings the CSCO or the leader himself to a test and if he has the nerves of steel to embrace the truth the success is guaranteed.

SC
MR