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What Supply Chain Leadership should learn from Formula 1

Erik Tieleman Published at

As a Formula 1 fan, I was recently enjoying the Canadian Grand Prix, during which there was much discussion about whether Red-Bull would succeed in closing the gap on Mercedes and Ferrari. One aspect of this particularly resonated with my own work: the talk of the “data-factory”, where data analysts work feverishly on in-race analytics, both during and between races, to provide team leadership with guidance for shaving crucial split-seconds off each lap. It got me thinking about why Supply Chain Leaders are not operating in a similar way to achieve their desired business impact.

As I see it, Supply Chain Leadership is underdeveloped when it comes to capabilities in Data-Driven Leadership. Supply Chain Leaders are certainly aware of, and expressing a need for, end-to-end visibility and transparency, with all the right data and meaningful performance insights. But a step change in their accountability and capability is required if they are to make the most of this data to learn, focus, decide, implement and act. Essential hurdles still need to be overcome in order for supply chain processes to realise the kind of performance enhancement achieved by Formula 1 teams:

Trustworthy data
Data is often only partially available and data accuracy is questionable. Analyses are coloured or biased and do not display “the one version of the truth”. Being able to trust in your data is essential for speedy decision making and implementation. What practical steps are you taking to resolve the lack of accuracy in data? Do you place yourself in the “victim loop” or do you take accountability, and start driving accuracy of data?

Meaningful shared insights
Supply Chain Leaders often have to wade through swamps of KPIs, supposed analyses and disparate, fragmented Excel sheets, to get to the required insights. In absence of any clarity, they rely on their teams to fish out the answers. These teams often have opposing views of what the issue is, who owns the problem, and what the solutions are. Hence a lot of “noise”, and limited “signal”. There is a need for a better ability to extract the signal from the noise. Why would you continue accepting this undesirable situation? What do you do to break through this lack of focus? What have you done to ensure you know the focus is data-based? How did you make sure there is a shared insight into the issue, the potential, the key levers, so your team gets into focused action??

Truly impactful contribution
All too often, we see Supply Chain Leaders flaunting impressive portfolios of improvement projects which will never fully come to fruition, due to an overload of initiatives and a lack of resources to execute them. When we deep-dive into these portfolios, a consistent pattern emerges: the impact of the chosen improvements is often unclear, business cases are assumed, and business buy-in is just a word.. Would you like to be the F1 driver who, during a race, receives an overload of trial-and-error-based instructions to adjust settings? Or would you prefer to be delivered with logical and plausible sounding ideas?

Data is the new oil, it can fuel the engine. But you still need a talented driver
Today’s Supply Chain environment is alight with excitement about big data, digitisation and industry 4.0. This does all hold huge promise, yet the reality I see is that Supply Chain Leaders struggle with organising and utilising their data to learn and improve. Basic questions like ‘What happened?’, ‘Why did it happen?’, ‘What to do now?’ and ‘How do we know it’s been done?’ often go unanswered. I’m pretty sure this never happens in Formula 1. If it’s still happening in your organisation, it’s time to sharpen up your Data Leadership capability.

Five Essentials for improving Data-Driven Leadership

  1. Get your hands on the right data
    Manage the change issue of it being “impossible to get it out of our ERP”. Take accountability for making sure the right questions are asked. The data you need is almost certainly there, just waiting to be found.
  2. Drive meaningful KPIs and analysis
    Stop looking at meaningless “averaged performance indicators” (e.g. % on-time per week), and tell your organisation to stop creating them. Start using data to learn about performance (transactions, order lines, shipments, supply orders) at granular level. Upgrade your teams’ abilities to “engineer” analysis so it reveals exactly where there’s a lack of reliability and where the potential and key levers for improvement lie.
  3. Create shared insights
    Don’t leave the generation of valuable insights to BI specialists, or delegate analyses. The biggest contribution a Supply Chain Leader can make is to steer towards one view on reality, a shared insight across the functional silos. A shared insight on where to focus, what to solve, and how to go about it.
  4. Create focus through data
    Yes, software tools and systems could be used to highlight deviations and increase efficiencies to sift through the data. But Supply Chain Leadership has an important role to play in focussing teams and resources on the right topics, and for organising an operational system of continuous learning and improvement, rather than just being reactive to systems. Use your data as a universal referee to guide your team’s focus and learning.
  5. Manage Execution
    Things don’t run as designed, people deviate from working standards or specs, leadership accepts deviation from operating rules that are critical to performance. Even with control towers and other enabling technologies deployed, remedying problems after they’ve been allowed to occur still means a loss of speed and quality. It is up to Supply Chain Leaders to build, engineer, visualise and review data in such a way that first-time-right execution, reliability in manufacturing and supply chain execution actually improves. Predictability is a result of our own way of working!

About R&G

At R&G Global Consultants we support business leaders and their organisations to realise their strategic ambitions with sustainable business results. We are business data pioneers and a digitisation partner. We are data-driven, hands-on, practical, operational and we transfer capability. We create innovative approaches to data-driven strategy execution with big data through structure, tools, operating systems and behaviour change management capability. We connect your people with your data.

Erik Tieleman is Managing Partner Central Europe at R&G Global Consultants

 

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