Driving Ideal Behavior

Part 4 of the Good Supply Practices Series

West is pleased to welcome guest blogger Dr. Marla Phillips, Director, Xavier Health, Xavier University. This is the fourth installment in a four-part series on supply chain management.

There is strong recognition that human factors play a large role in how the supply chain operates (as with everything else).  Success and positive impact cannot be attained without simultaneously addressing what drives human behavior in this space. 

The contribution to the Good Supply Practices (GSPs) relative to this theme will include:

• Relationships – understanding the cultural alignment between the manufacturer and the supplier, establishing and maintaining expectations with cross-functional involvement, critical factors to consider in quality and business cultural alignment, optimizing transparent communication, and identifying what the ideal behaviors are commensurate for each relationship.
• Performance – establishing key triggers and associated escalation tied to performance improvement on both sides of the contract (yes, that means assessing yourself!), understanding the consequences (intended and unintended) of performance measures used for employee performance and pay versus business metrics, and establishing mechanisms for supplier recognition.

Many discussions throughout the entire initiative have centered on behavior.  For example, customers historically operate without caring what the cost or disruption to the supplier is, or how the supplier profit margins are impacted.  Forecasting changes are communicated without notice and on a regular basis, while the supplier is left scrambling to “make it work.”  Yet, there is a lack of realization that this churn increases opportunity for error, thus decreases the ability of the supplier to be reliable for the manufacturer.  So can we establish criteria that are helpful for both sides on an on-going basis?  Transparency is a key component, while recognizing what is actually important to competitive advantage versus current paradigms.  This will become more apparent as we demonstrate how other industries operate collaboratively despite fierce competition.  Suppliers have indicated that receiving conflicting information from various groups within their client’s organization is actually a big challenge.

Our data has also revealed that random metrics that do not trigger action create distraction that leads to dysfunction on multiple levels.  Additionally, there is a need to increase accountability and responsibility throughout the supply chain on both sides of the contract.

As noted in my previous blog (link), Working Groups have been developed to address the issues these themes present and provide GSPs for the industry.  Key elements that the Working Groups will keep in mind across all three themes is the need to address each theme from all phases of the product lifecycle:  different groups involved at various phases, different levels of control, centralized versus decentralized, etc.  In determining benefit of implementation, remember that our industries are mostly operating at a 6 sigma level already.  But due to the impact of failure, risk constantly needs to be evaluated, understood, and addressed.  And finally, there is a need to develop solutions that will work for small businesses (both suppliers and clients) as well as midsized and large firms.

Look for the GSPs established by the Working Groups to begin in 2016.  Until then, why not join us at the FDA/Xavier University PharmaLinkConference on March 24-27, 2015 at Xavier University, where you’ll learn more about each of the themes above, and how you can be a part of the solution.

See you there.

Previous Blogs from Dr. Phillips: