Rapid growth is exciting but not always efficient when it comes to building a supply chain organization. Eventually, most leaders face the challenge of right-sizing their overhead for the business to remain competitive. Sometimes this can be done with technology alone, but more often it requires a reduction in headcount and/or restructuring of roles and reporting.
Jason Cook, a Global Supply Chain and Procurement Executive, led such a global supply chain organization when, after periods of significant growth, market conditions plummeted and cost-cutting measures where needed throughout. The challenge was especially daunting because the scope of business, geographies served, and product portfolio size, was not changing. Service quality could not deteriorate if the business were to survive in what had become an extremely competitive market.
Jason A. Cook, Global Supply Chain and Procurement Executive
Fortunately, Mr. Cook’s team had already begun working on a solution without knowing it. “It was during an earlier expansion exercise that I realized how complex this organization had become from the outside looking in… and even for some of it’s own managers! This same complexity naturally made it difficult to grow, adopt innovative technologies, or implement workflow improvements,” Cook said.
What he needed was an operating model whereby everyone knew their role, how it related to all other functions, and how they contributed value directly to the business. Rather than drafting the model himself, based on Mr. Cook’s own history and intimacy with the organization, he recruited a small cross-functional team and assigned two aspiring managers to co-lead. He challenged the team to “explain how our organization works, why each part is critical and how they work together. Do so as though you were selling to an investor or customer.”
The resulting Framework Model was easily embraced because it was created and reviewed by that same organization. “There was sense of pride that every role was translated to business value.” Later, when market conditions changed and it became clear that significant cuts would be needed, the leadership team confidently focused on mission-critical processes vs. just headcount. The Framework Model became the template for making the right changes, ones that would minimize service quality disruption as the business continued and ideally grew. “It also proved a valuable tool for messaging current and future [team members] at all levels,” said Cook.
Workforce reductions are exceptionally difficult and stressful for all involved. This stress, and resulting disruption, can be managed when employees have confidence that leadership understands “how things work,” and that a clear path is in place for the journey. This was possible with the new Framework Model that Mr. Cook’s team created.
“We achieved a 23% reduction in overhead cost with no material impact to service quality. The organization also experienced very little attrition as the job market recovered. This is attributed to confidence and pride generated though bottom-up alignment with mission and vision.” One final validation came when sister supply chain organizations began migrating to the framework pioneered by Mr. Cook’s team.
Watch full video interview below.
Contact Jason Cook via LinkedIn or his Career WebFolio.
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