“There is always a latent tension between what facilitates timely decision and what promotes thoroughness and accuracy in assessment.”
Many of the supply chain planning software implementations on which I’ve worked have felt like quests to cram more data into the solution to enable the planners to make ‘perfect’ decisions. This idea that more data means better decisions – that somehow if we could just get a little more data, the software could calculate a near-perfect, optimized plan – can become distracting and lead implementations astray.
These conversations remind me of my experience in the US Marine Corps. The art of warfighting came down to making imperfect decisions, with incomplete information, but executing them… well, let ’s just call it ‘vigorously’. We talked about getting inside the enemy’s decision cycle. That ability to interpret the environment, reassess, adjust, communicate, and press on more quickly than our foes was one of the keys to success on the modern battlefield. The decisions did not need to be ‘perfect’, but they did need to be ‘good enough’ on a timely basis.
The military has talked about the O-O-D-A loop for decades. It is in fact, the foundational concept behind the Marine Corps model of maneuver warfare. The ideas have filtered throughout the business community, but as they were passed on, some of that original messaging was lost.
This is not a single loop. There’s a crank on the side of this wheel that needs a strategic focus to turn. The companies that turn this faster gain strategic advantage, but what’s the differentiator? This comes down to one box on diagram: Orient.
Orient. Understanding, interpreting, and synthesizing information is what good companies do well. They are very efficient at orienting in the OODA loop by filtering out noise and distractions. Organizations focus their view of information and streamline decision making by defining effective metrics.
Misalignment in the metrics strategy can cause an isolated, high visibility service failed to create the impression of broader problems, while an endemic weakness may not be apparent in the granularity of the data at specific nodes in the network. ‘Correct’ metrics will depend on the supply chain strategy and the future state organizational model.
A fully realized Performance Measurement System is the underpinning of effective tactical and strategic decision making. It enables an organization to
- Monitor (Observe): Track performance for reporting
- Control / Diagnose (Orient / Decide): Highlight when the supply chain operations require modification or attention
- Direct (Act): Use of metrics to focus activities and as a foundation for personnel evaluation
The steps for implementing an effective Performance Measurement System are easy to list, yet deceptively difficult to carry out.
- Metrics Definition
- Select appropriate metrics to monitor supply chain performance
- Establish clear goals
- Data Management
- Define data required to support metrics and operational statistics
- Determine mechanisms for storing data and displaying metrics
- Performance Tracking and Root Cause Analysis
- Define process and organizational responsibility to track performance and identify points for further analysis
- Define root cause analysis / corrective action process and mechanisms
Effective, efficient decision making. Cranking that OODA faster than your competition; fast enough to keep ahead of the market. These are critical factors for success when conducting operations with the Marines or guiding your supply chain organization.
Talk to MEBC today about creating this foundation for your supply chain operations.