Example 5: Hiring Employees
Figure 6.7 shows a new employee hiring process. Important outcomes for this process are the translation of hiring manager requirements into a job description, the posting of the job description, coordinating interviews between job applicants and the hiring manager, and onboarding of a new employee. Each of these actions is a subprocess consisting of lower level work tasks. Common process issues are a failure to accurately capture job requirements including required skills, the start date, education, and other relevant factors from the hiring manager. Errors start to occur when creating the job description, advertising for it, and interviewing job applicants not acceptable to a hiring manager causing a longer hiring lead to on board new employees and higher cost. The coordination of the interviewing or onboarding processes could be poorly done resulting in applicant, new employee, or hiring manager dissatisfaction. Process improvements can be applied to any of these process steps to identify and eliminate the root causes of the process issues. A new hiring example was also discussed in Chapter 2 showing strategies for reducing onboarding lead time, improving the percentage of applicants hired, and reducing the associated onboarded costs.
Example 6: Supplier Performance Management
A Supplier Performance Management (SPM) process is critical for providing suppliers with the information needed to improve performance. Measured performance increases competition between suppliers which lowers material, labor, and other procurement costs. Figure 6.8 shows a simple SPM process. It starts by developing an approved supplier list considering supplier capabilities evaluated by a cross-functional audit team. Issues could occur during the vetting process. Issues could occur if a
FIGURE 6.7
Example 5: Hiring Employees suppliers capabilities or financial position are overstated. Failure to properly evaluate a supplier s capability from a cross-functional perspective such as design, logistics, finance, and other teams causes problems in the future. In the second step, issues caused by poor communication to suppliers may increase procurement costs and the lead time to receive goods or services. Other issues occur because of poor coordination between suppliers and internal teams. An ineffective or inefficient supplier rating system prevents suppliers from improving performance. This decreases supply chain operational efficiency.
FIGURE 6.8
Example 6: Supplier Performance Management (SPM)
Supply chains are complicated and consist of many supplying organizations. Improvement opportunities occur at organizational interfaces. Many chronic problems exist because organizations are internally focused. Unknown to them are the many interorganizational issues caused by miscommunications and historical requirements that are no longer relevant. As an example, perhaps a customer has a specific testing requirement that causes the supplier to do internal rework. But this requirement was based on previous products and no longer relevant. Conversations about these types of issue and making improvements to eliminate them can create significant efficiencies and benefits for both organizations. In earlier chapters we discussed creating a CEM and walking the process with the customer as a key method for identifying gaps and reducing interorganizational friction.
