September 27, 2018
To enable supply chain teams to perform optimally, a mixed composition in terms of age and background is highly recommended. This became clear during a project UC Group undertook with the world's largest cigar producer. There, the combination of industry knowledge from existing planners, the fresh perspective of a young professional, and the experience-based leadership of an interim manager led to a true 'power block' within the supply planning organization. Max van Laarhoven and Peter Bol from UC Group explain how this came about.
The reason for the change project was the merger of two market leaders in the cigar manufacturing world. Peter Bol was asked to set up a new supply planning team. Previously, as interim 'head of supply planning', he had also played a leading role in introducing a supply planning organization for a new factory in the Dominican Republic. For the new team, in addition to the existing planners, several new people had to be recruited, but these proved extremely difficult to find. For one of the roles, it was therefore decided to bring in a young professional from UC Group. This turned out to be Max van Laarhoven, and it proved to be a smart move.
Peter: “Max had only recently left university and had all the supply chain knowledge and techniques still fresh in his mind. This immediately came in handy during the project when designing the new planning processes. Max proved to be very skilled at creating process maps with which he made clear what everyone's new role would look like and what tasks were involved.”
Max: “It was also fun to do because I could immediately show my added value. However, at first, I felt a bit awkward towards the existing planners, as if I was going to dictate how they should do their work. Peter noticed this too and managed to give it a nice, positive spin. He used the process maps precisely to put the experienced planners more on a pedestal.”
Peter: “When you map out what someone has been doing for years, it can be perceived as threatening. My goal was to show them how important their work is to the company, and how proud they should be of it. Look at all you do and the value this creates! In these kinds of change projects, you have to be careful not to unintentionally put people on the defensive.”
In a good supply planning team, industry knowledge is indispensable, especially in the tobacco industry. Planners need to understand how the tobacco supply chain works, how to produce cigars, what raw materials are needed, what the sequence restrictions are for punching wrapper leaves, how long overseas transport from one factory to another takes, etc. For planners who had worked in this industry for years, this was second nature; for newcomers, of course, it was not.
Peter: “The first time I attended an international planning meeting, I couldn't even understand people, even though the working language was English. Every sector has its own jargon. There are also cultural differences between countries (Dominican Republic, Sri Lanka, Indonesia, and Belgium), and relationships between departments (manufacturing, planning, and sales), which you, as a planner, really need to master to get things done. Suppliers need to be willing to grant you things, which is difficult for us Dutch people to understand. Can't you just order something? That's not how it works everywhere.”
Max: “The culture and customs indeed took some getting used to for me, but on the other hand, a young professional is also expected to be open-minded and occasionally challenge the status quo. To innovate, you need people with a fresh perspective, people who dare to question the existing situation. If I had been the only external person, I wouldn't have done that so quickly. With Peter there, I dared to take on that role because if I went too far, I knew he could smooth things over.”
In addition to a good mix of internal and external knowledge, a healthy balance between young and 'old' also proved important during the project. People fresh out of school are eager and energetic, but sometimes need to be 'tamed' by someone above them. Senior managers maintain a healthy group dynamic and keep an eye on the big picture. They intervene if a 'young gun' threatens to overstep.
Peter: “A good example was calculating the safety stocks we needed to maintain per branch. Within the organization, fixed rules of thumb were used for this, such as two weeks of stock, but these were suboptimal for many products. Max, of course, knew from university how to calculate these much more precisely and quickly got to work on it. In his enthusiasm, he wanted to calculate and reset these individually for every single product.”
Max: “Peter saw that this was becoming excessive and suggested we first conduct an ABC analysis of the assortment. Then I could initially focus on the A-items. He also pointed out the financial aspect and that extra safety stock leads to higher capital costs. I then proceeded within these parameters.”
Peter: “But there are also plenty of examples where it went the other way around. Sometimes I tend to come up with wild ideas. The great thing about Max is that he then thoroughly calculates those ideas using the available data. He shows me the consequences of my own proposal and keeps me on my toes.”
The gentlemen are convinced that a good balance within a supply planning team leads to the best performance. There were also planning teams with much less diversity, and they had a bit more difficulty meeting the new demands.
Peter: “You can also see something like that in the atmosphere and job satisfaction within a team. Fun is a truly underestimated factor in a team's success or failure, in my experience. If you, as a manager, actively invest in it, it pays off handsomely. For example, I regularly took the whole team out for dinner. At first, people were surprised by this; they weren't used to it in the company, but you could see that a tremendous team spirit emerged.”
Max: “My role as a young professional in this was incredibly educational. I was thrown in at the deep end, but I always felt there was trust. When the setting is right, you can, and dare to, do much more than you initially thought.”
Peter: “It wasn't just Max; you saw the whole team flourish. Within the company, the team was seen as a real 'power block,' which, by the way, you then also need to manage well. You don't want envy to arise in other departments. You have to put a positive spin on that too.”
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