22 February, 2018 // Some observations are so far ahead of their time that they still look visionary years later. That’s the case with a 2001 article by Re-engineering the Corporation co-author Dr. Michael Hammer in the Harvard Business Review.
A while back, we came across a quote from his feature, “The Superefficient Company” and instantly recognized our own mission to transform in-transit business processes.
“Streamlining cross-company processes is the next great frontier for reducing costs, enhancing quality and speeding operations,” Hammer wrote. “It’s where this decade’s productivity wars will be fought.”
Or perhaps the next several decades’ wars. Maybe this century’s.
Hammer sets up his case by arguing that the Big Data Story of the 1990s was the emergence of enterprise resource planning (ERP) software. With ERPs, corporations were able to see and synchronize all their internal actions. For the first time, it was possible to align sales, manufacturing, supply chain, procurement and human labor to fill an order as efficiently as possible. This opened up a wide range of opportunities to break down departmental silos, coordinate across functional gaps and create end-to-end business processes.
That’s where “The Superefficient Company” comes in.
Fact is, the biggest gaps in today’s outsourced, global manufacturing and distribution occurs beyond the walls of the enterprise. Of those, many gaps occur between suppliers while goods are in transit. While ERPs have sought to bolt external transactions onto their core, it’s still can be hard to see that the box for which you paid a premium to expedite into the distribution center by Friday isn’t going to move any further through its fulfillment process until Monday because the warehouse staff schedule doesn’t make anyone available to receive it until then. Once the fulfillment team does its work, their work may not be synchronized with the outbound carrier.
Days of productivity can be lost in these gaps, resulting in wasted transportation and logistics cost, as well as excess capital required for pipeline inventory. Squishing the gaps can mean accelerating and improving the whole process dramatically.
That’s just one example. To mind these gaps and turn multi-party transactions into cohesive, end-to-end processes, you need visibility systems, analytics and a team of in-transit transformation experts. We’ll have more to say in coming weeks about Morgan’s approach, including our ChronosCloud visibility platform and our first-of-its-kind outsourced inventory ownership and management program, Inventory On Demand.
In the meantime, “The Superefficient Company” is well worth a first-time read or a revisit. As Hammer summarized:
“It’s natural for a company to get nervous about tearing down the walls that enclose its organization. The act goes against many long-held notions of corporate identity and strategy. But most companies were nervous about breaking down the walls between their internal departments and business units, too. Some even delayed the effort—and they have spent the last decade playing catch up with their competitors. Streamlining inter-company processes isn’t just an interesting idea; it’s the next frontier of efficiency.”
It’s a frontier of gaps, sub-optimized transactions waiting to be transformed into orchestrated business processes. Still, like it or not, this landscape is going to redefine your competitive position. If you need help along the way, click the button below for a free review and analysis!