I have never been an athlete. At the age of 58, I buried my mother in November 2012. She died of complications from Alzheimer’s disease. It was a long hard eight-year struggle that was tough on my family. One of the sad outcomes of the disease is that you don’t know how to grieve. The victim of Alzheimer’s slowly slips away. The person that you bury has very few resemblances to the person that you love. So, as I buried her, I became obsessed with learning how I could reduce my chances of getting the disease. As a daughter of a mother with Alzheimer’s, I have a high risk of getting the disease (35%). This landed me in an intense discussion with my trainer and my doctor about blood flow into the brain through endurance training, and how that might reduce the risk of me getting Alzheimer’s.
My long-term blog readers may remember that two years ago, when I left AMR Research after the acquisition by Gartner Group, that I became more serious about my health. I started training six hours a week and lost 37 pounds. Those of you that know me personally also know my frustration with trying to drop another twenty pounds. It has been a goal for the past two years. While I have lost 22 inches through diet and exercise, and improved my Body Mass Index by 11%, I have not dropped weight.
So, with the death of my mom, and the discussions with my physician about fighting the probability of getting Alzheimer’s, I started training with a new vengeance over the holidays. My goal is to live better for the rest of my life. It is hard. My trainer is unmerciful. He has set new targets for heart rate monitoring for me, and I have kept up the training. Last week, I ran and completed my first triathlon. Yes, it was ONLY a sprint triathlon (10 minute swim, 30 minute bike and 20 minute run), but I finished it. I never thought that I would do a triathlon. A year ago, I could not run to the mailbox; but I not only finished the event, I was at the middle of the overall rankings as an overweight 58-year-old woman. I finished despite cramps in my calves and a tough travel schedule getting to the event. So, why do I tell you the story?
I see a lot of parallels in the training that I did for the triathlon, and the work that I am doing on financial ratios with Abby Mayer on my team at Supply Chain Insights. Abby and I are writing an e-book on Supply Chain Metrics that Matter. It will publish in the early summer. To write the book, we have been analyzing twenty years of supply chain financial ratios and looking at the trends. We are also doing multi-variant analysis to build a formulaic representation of supply chain excellence based on public market valuations. We call this the Supply Chain Index. We will be launching this work at the Supply Chain Insights Global Summit on September 11th-12th in Scottsdale, AZ.
As I look at the preliminary analysis results for the e-book, I see many parallels to my triathlete experience. It has been fascinating for me to study the financial results of clients that I have worked with for the past twenty years and to see how their supply chain strategy documents translated (or did not translate) into financial results. I will be speaking more on this during my European Book Tour of Bricks Matter next week.
- Balance. When I first started training, I got as stiff as a board. I lost flexibility and balance. I now spend an equal amount of time stretching to improve balance, as I spend on weights in the strength training. I am also focused on balance. I am amazed how strength training reduces balance. Similarly, in the evolution of supply chain practices in the past decade, I feel that we have not had a sufficient focus on balance and flexibility. The evolution of tightly integrated ERP solutions to BI and APS has created tight and inflexible links. As part of the training plan, for supply chain excellence, companies need to focus on balance and flexibility. Only 10% of companies today are happy with their “what-if” analyses and the ability to understand change. We need balance between front and back office activities and we need to understand the implications through “what-if” analysis to drive flexibility. It is about much more than short cycles. It needs to be deliberate. I think that we have taken tight integration of supply chain applications to ERP too far and lost balance and flexibility.
- A Clear Plan. I am a strong swimmer and a weak runner. While I can swim 75 minutes and enjoy the time in the pool, I have to force myself to run. To complete this event, I had to focus on what I did not like to do, and I had to learn how to balance my energy and body motions to finish the run. Likewise, in today’s supply chain environment, I find that supply chain leaders favor a single function of logistics, manufacturing or sourcing. They have not forced themselves to learn all three. To complete the race for supply chain excellence, the company needs to be good at all three and have a strategy on how to reach balance between the functions in day-to-day operations. It requires a plan. Too few companies have a clear supply chain strategy. While the answers to quantitative surveys that we complete at Supply Chain Insights state that over 60% of companies are comfortable with their supply chain strategy, I find that only 5% of companies truly have an adequate plan that drives a clear road map to help the organization transition from business strategy to supply chain strategy. (And, for clarity this is not a strategy for the supply chain department. Instead, it is the design and implementation of a value chain strategy that gives a plan to create differentiation from the customer’s customer to the supplier’s supplier.)
- Measurement. Over the last decade, the only metric that we have improved in the supply chain is revenue/employee, a measurement of productivity. Only the high-tech industry has been able to effectively make improvements on the effective frontier of supply chain management–the balance of growth, productivity, cycles and complexity–and drive resilience out of the Great Recession of 2007-2009. Companies that are not looking holistically at metrics are stuck. What do I mean? The process industries have mistakenly viewed Return on Assets (ROA) as the proxy metric for reducing operating costs. In many ways, it is like my focus on weight in my training for the triathlon versus the BMI or inches. The measurement of the BMI is harder. It is easy to hop on a scale and know your body weight. It is harder to understand lean body mass. Similarly, only 23% of manufacturers can easily measure profitability. And, in my research on profitability models for manufacturers, I cannot find a good packaged solution for companies to easily model profitability in building market-driven value networks. As a result, companies will be forced to build it themselves using technologies for “what-if” analysis on strategic modeling from i2 Strategist (now JDA), Insight or LLamasoft. However, it is worth it.
- Need for a Coach, Leadership and Grit. In the study of financial metrics, I find an inverse relationship between companies that have had a strong dependency on supply chain consultants and results. Instead, the companies that have done it the best, have driven supply chain excellence based on internal leadership. This does not mean that the organization does not need a coach; but, there is no substitute for internal leadership, discipline and true grit. In the words of a supply chain pioneer in the book Bricks Matter, “No true supply chain transformation can happen in less than three years” and “There is no substitute for leadership.” The coach needs to be carefully selected based on the training needs, but is there to guide the plan, not to do the hard work.
- Compelling Event. I would not have done this without a compelling event. My mother’s death and the probability of dying a similar death is a compelling event. I am trying to fight back. Likewise, in the history of supply chain management, over the course of the last twenty years, more success has happened through failure than success. Company transformation usually happens following a deleterious event.
Anyway, long story short, finishing my first triathlon was exhilarating. I had no idea that I could do it! I am now in training for a longer and tougher event (1/2 mile swimming, 15 mile bike ride and a 5K run.) I have built a one year plan, and I am working hard with my coach. I am monitoring my heart rate, BMI and time. I am also focused on building strength, flexibility and balance. Each of these elements requires hard work for this gal that has never been an athlete, but I am trying hard to fight back the momentum of time. I think that there are insights here for the supply chain leader. What do you think?