Change is Good: A Step-By-Step Path to Best Practices
To survive and prosper today, you have to be at the top of your game. Your supply chain has to be better than your competition’s supply chain. If you are great today, tomorrow you will be good and soon you will be out of business.
The best way to keep improving is to embrace Best Practices. This means understanding your customers’ ever-changing requirements, having your operations and your costs thoroughly under control, getting the best return on investment, and realizing that you are never done with the job of continuous improvement.
Best Practices are not events or a one-time activity. Rather, Best Practices involve a never-ending process that encompasses:
- Providing the best customer service.
- Leveraging equipment to minimize labor.
- Having a healthy, safe, and trained work force.
- Using systems and processes to continuously track and control movement of materials.
- Developing processes that eliminate duplication of effort.
- Having specific operational methods to meet all operational requirements.
- A common sense application of technology to meet changing needs while minimizing the impact of implementing new technology.
- Day-to-day management to get the most out of all aspects of the operation.
- Meeting and exceeding all corporate and government regulatory requirements while being proactive in planning for future regulatory requirements.
- Having contingency plans for meeting future identifiable operation challenges.
Step 1 – Establishing the Baseline
The process of Best Practices begins with the recognition that we can only improve that which we can measure. The first step is to select an aspect of the operation that we need to improve. Then we need to identify the parameters we want to measure. In the case of customer service, we would typically want to measure four parameters:
- The correct product, which covers the entire characteristics of the product including customer required shelf life.
- A complete order including all paper work, labeling, electronic submittals, etc.
- On-time delivery. The customer does not care when it is shipped. The customer only cares that it is received on time.
- Perfect condition. No damage from the pallet and shipping container to the individual pack.
For each of these factors, one has to develop analytical measures. For example, the correct product can be tracked by conducting statistically based auditing of orders. The baseline should be presented graphically and tracked to identify and quantify problems, as well as to track the impact of improvements.
Step 2 – Understanding the Goal
The goal of Best Practices is to improve the entire operation. It is critical that improvements do not negatively impact other operations. For example, it does little to no good if improvements are made in receiving and in turn these improvements make the picking and shipping of product more difficult. The implementation of Best Practices requires that all members of the organization act as a single coordinated unit to identify and implement improvements.
The characteristics of operational Best Practices in supply chain performance are:
- Understanding the importance of customer requirements and satisfaction when considering any changes to the operation. Changes cannot reduce customer satisfaction, and ideally changes should improve customer satisfaction.
- Developing a strategic plan that defines the requirements of an efficient and effective distribution system for both the present and future. Periodically reviewing and revising the plan to reflect changes in the marketplace. All changes should be made with strong consideration of the strategic plan
- Having proper utilization of supply chain providers including: suppliers, manufactures, 3PLs, wholesalers, and Physician Supply network partners. Supply chain partners can provide support in areas and functions that are not within your company’s core competencies. In addition, supply chain partners can be used to handle peaks and unusual circumstances. For some organizations, supply chain partners are the best choices for the entire distribution process. For other companies, providers can assist in the introduction of new products or the creation of special packs.
- Conducting economic and qualitative evaluation of all potential improvements based on specific, weighted criteria. Nothing can kill a Best Practice program faster that the implementation of a change that is not economically justified or a change that has undesirable qualitative effects. Thus all proposed improvements have to pass not only stringent economic analysis, but they also have to pass qualitative analysis
- When it comes to selecting and implementing warehousing technology, the first step is to define mission-critical functions and key business processes. Then select the technology solution that meets these requirements with little or no modification. Always keep in mind that the most important requirement is meeting customer satisfaction both long-term and during implementation.
Step 3 – Developing Best Practices
Once the goals for the operation and measurements are in place, the understanding of all aspects of best practices must be identified. Key questions must include:
- What is the best use for the existing equipment?
- What modification will result in improved equipment utilization?
- How can we improve customer satisfaction?
- How do we eliminate duplication of effort?
- How do we handle peak requirements, and what can we do to smooth out peaks?
- What changes can our vendors make that will improve the operation?
- What changes can we make to reduce vendor costs and thus prices?
- Are there alternate packaging materials and supplies that will improve customer satisfaction, reduce cost, and or improve the operation?
- What can we do to reduce utility costs?
- What improvements can be made to existing software systems?
- What systems should be replaced or upgraded?
- What training will improve operations?
- How do we better meet our company and regulatory requirements?
- What are the proper safety practices?
- How can we improve ergonomics?
- What improvements can be made to maintenance?
- How will changes in one function impact other operations?
- What is the best use of supply chain partners?
- Where should unused raw material partials be stored?
- Where should auxiliary operations be located?
- What physical constraints affect decisions?
- How do we improve lot integrity?
Step 4—Implementing Best Practices
The critical factors in implementing best practices are: selling, planning, training, and testing.
Selling
The key to implementing any change is to get everyone involved in making it a success. It is natural to resist change. Fully recognize that some changes may well make it more difficult to perform some jobs. Management can always just institute changes, but this leads to resistance and a lack of trust. It is better to take the time to explain why the change is being made and to enlist the ideas of everyone in the details of the improvement. Often, something as simple as adding some lighting will create a feeling that the change is everyone’s idea and everyone works toward success.
Planning
Few changes are as simple as they first appear. It is rare that a change does not require support from other functions and areas. And it is not uncommon for a change to limit capacity during start up. Thus it is critical that all changes be planned for in advance. With proper planning, all affected parties have an opportunity to prepare. One can be more confident that all new requirements will be accounted for and all required actions have been taken. Planning will show the impact of preparing and implementing the change on the throughput of the operation. Understanding the impact of throughput then makes it possible to avoid impacting customer service during peak periods.
Training
New ways of doing things require that everyone be trained. The first goal of the training is to make certain that everyone knows about the improvements, how they affect the operation, and most importantly how the people are affected. The training must then address how the new tasks are to be accomplished. It is highly critical that the training include what to do when the unexpected or unusual happens.
The training program has to be developed with strong consideration of adult learning requirements. Operating personnel are best trained with less classroom work and more hands-on learning.
Conclusion
If you are standing still, your competition will surely pass you. The use of Best Practices is an excellent way to continuously improve your operation. To ensure success, the keys are to:
- Have an analytical understanding of the current state of the organization.
- Use a teamwork approach to implementing changes.
- Consider the impact of changes on the entire facility and organization.
- Have an implementation plan that includes: selling the change, planning for the change, and training affected personnel.
For more details on improving your organization and to read case studies, visit Tompkins Associates’ on-line pharmaceutical solutions.
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