Logistics Collaboration: The Effective use of Cross-Functional Teams
Software is a necessity in all facets of business today, but people are needed to manage the software, and insure data integrity for accurate data output. People are your most important product. Use them to continuously improve your organization. Cross-Functional Teams are a good way to use multi-talented people to solve many kinds of problems and or opportunities in your organization.
A Cross-Functional Team is composed of people with varied levels of skills and experience brought together to accomplish a task. As the name implies, Cross-Functional Team members come from different organizational backgrounds. Cross-Functional Teams may be permanent or temporary. Some members are strangers, some are enemies, some are colleagues, and some are friends
Logistics Collaboration Begets the Ability to Hone in Overall Costs Reduction
In Logistics, and in order to achieve true logistics collaboration, it is a good idea to have a Cross-Functional Team made up of the logistics provider and shipper/customer to continuously improve their relationship and meet the goals set in a mutually agreed upon Service Level Agreement (SLA) with Key Performance Indicators (KPIs). This is also very true in the realm of carrier relationship management to maintain rates and long term working relationships.
If it’s a Quarterly Business Review (QBR) to improve the Transportation Management System (TMS) optimization, the same applies. If there is a Fuel Surcharge (FSC) increase talk about it/negotiate it in a Cross-Functional Team atmosphere. This kind of communication solves problems to the benefit of both parties in the process of logistics collaboration. It has collaboration and harmony at its foundation.
Some would say this is radical collaboration, and if it works, what’s wrong with that?
Companies should always look for Cost Reduction whether business is good or bad. Cost- Functional teams in a company, can provide Cost Reduction. How? Use Pareto’s 80/20 principle to choose parts, subassemblies or commodities to study to reduce the cost of goods (cogs) and increase profitability. Pick a captain of the team and a recorder. Bring the item to the meetings. Visually inspect the item. Ask the team for ways to reduce the cost yet maintain the quality of this item. Never jeopardize quality in this process. All thoughts, no matter how outrageous, are put on a flip chart or white board. Brainstorm freely. Be freewheeling; anything goes. Invite suppliers in, who are the specialists in producing this item, to join in on the team meeting, and offer cost reduction ideas. The above tactics are the heart of the execution of your logistics collaboration strategy. Ask the following questions to go further:
- Can a standard item do the same job as this special item?
- Can any processes be eliminated?
- Are there other finishes that can be used that are less expensive, but meet the quality level?
Challenge yourselves, and come up with a better way to produce this item, but reduce the cost and maintain quality.As I always like to say: There is a better way to do anything. Find it. Blast! Create! Refine! ….as a Cross-Functional team.
If you choose to have a company wide Value Analysis (VA) program to reduce costs using several Cross-Functional Teams, have a formal program with Top Management investment (remember for true logistics collaboration, TRUST is the key, and leaders can help build trust top down).
Have a VA Administrator to oversee this program. Offer positive reinforcements in the way of prizes to a winning team quarterly. Review VA ever quarter as a training/learning experience. Have each team present the status of their VA project quarterly by having captains review their project with the entire group present. Make it a fun project. Many members will be happy to get away from their day-to-day duties to brainstorm ideas with their team in competition with other VA teams.
Occasionally have a Supplier Day Conference on an item or commodity and invite all of your Suppliers of that item/commodity to present their ideas on a structured Supplier Day Conference. Have a plant/operations tour, so Suppliers familiarize themselves with your operation. You give presentations, and so does the Supplier. It enhances collaboration and harmony in your working relationship.
To review, when should you use a Cross-functional Team approach for your logistics collaboration strategy?
- To solve a problem that impacts multiple parts of the organization.
- To improve a work process that crosses organizational lines. You can use Value Stream Mapping (VSM).
- To coordinate ongoing processes or activities that cross organizational boundaries.
- To accomplish tasks that require a breadth and depth of knowledge, skills, and experience.
How do you use a Cross-Functional Team to enhance Logistics Collaboration?
- Select team members who have the optimal mix of skills and expertise.
- Clarify the objectives and outcomes of the team.
- Identify the roles and responsibilities of team members.
- Use the knowledge of the entire team to determine strategies and solutions to accomplish objectives.
- Determine timelines and actions to accomplish objectives. Develop a Project Plan.
- Provide team members with access to training in teamwork skills such as communicating, listening, and facilitating.
- Periodically evaluate the functioning of the team and program.
As a leader of a Cross-Functional team the implications are clear: Insist on a clear team goal and a plan to achieve it; work hard and smart to gain the commitment of team members and other stakeholders to the team’s goal; emphasize collaborative efforts and team rewards; provide training on how to work with a diverse group of people; and create a set of policies and procedures that support a team-based environment.
Six (6) Competitive Advantages to Logistics Collaboration thru Cross-Functional Teams
- Speed: Reduces the time to get things done
- Complexity: teams improve the ability to solve complex problems
- Concentrate on satisfying the customer’s needs
- Creativity: Bringing together people with different experiences and backgrounds, create creativity and effective brainstorming techniques.
- Organizational learning: The team is more easily able to develop new technical and professional skills, learn more about other disciplines and learn how to work with other people who have different skill sets.
- Single point of contact: One place to go for information and for focus about a project or customer.
Are you using Cross-Functional Teams in your business to solve problems, increase logistics collaboration for ongoing resource use reduction, and/or to reduce costs? It works in any business environment. If not, why not?
You don’t have time? There is always time to do the right things. In the New Year 2014, introspect, and find the time to reduce costs and solve problems investing your own people in the process. There is nothing like ownership of a successful company program.
I have been a Value Analysis Administrator for a large mid-west Company: The General Binding Corporation (GBC) in Northbrook, IL, and I can tell you personally that VA works for the company’s profitability and team spirit. Our projects were submitted to Purchasing Magazine and they had write ups on our groups. It saved GBC millions of dollars.