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Four Building Blocks for Defining Supply Chain Org Structure

By June 29, 2022July 1st, 2022Blog

According to recent research conducted by McKinsey among a large number of global executives, nearly 85% of respondents said they experienced organization redesigning in the last couple of years. It seems organizations are in a permanent state of organizational flux.

The supply chain organization structure is not just an arrangement of lines and boxes; it is an interlinking of processes, assets, technology and people. If any one of these aspects is not functioning efficiently, it may affect the performance of the overall supply chain organization.

In our extensive experience working with supply chain organizations, having an organization structure is an imperative to driving:

  • Efficient team structure and proper alignment
  • Optimum number of team members so that their person-hours are utilized efficiently
  • Clearly defined roles and responsibilities
  • Standardized business processes and uniform maturity across divisions or business units
  • Talent optimization

Redesigning organization structure comprises the following:

  • Changing design and roles (how collaboration will happen among various team members)
  • Embracing new ways of working (change will bring in new ways of working)
  • Aligning goals with the overall organizational objectives and culture

Before we build an excellent supply chain organization structure, we need to assess what’s needed. We have defined the four building blocks for an organization structure redesign.

1. Define the Purpose

Generally, the purpose of organization structure or redesigning an organization structure has some or all of the following objectives:

  • Reporting line
  • Better role definitions
  • Talent optimization
  • Governance
  • Enhanced business processes
  • Better utilization of systems and processes
  • Performance management
  • Clearly defined RASI

2. Identify the Target Audience

Defining the target audience and behaviors is imperative to achieve the desired benefits of the organization’s designing or redesigning exercise. We should have a crystal-clear understanding of actions and behaviors that complement the purpose of redesigning an organization’s structure – and these desired behaviors need to be incentivized successfully.

It is also essential to spend sufficient time understanding the organization’s current situation before we jump directly into doing the redesigning exercise. Before redesigning the organization, it’s critical to understand interlinking or interdependencies between various roles and the nature of other processes and talent.

3. Execution

The execution stage of the organization structure redesign exercise comprises four steps.

Collect Data

  • Collecting all the necessary data is the first step in the organization structure redesign exercise. In this step, a deep-dive study of job roles and responsibilities is carried out.

Survey Members

  • An in-depth survey is used to reach all the members of the supply chain organization and gather their responses, making the organization structure redesign exercise substantial, relevant and data-driven.
  • This survey generates very granular responses, which provide a clear picture of each respondent’s involvement in various activities. Here, we also make sure that we identify the training needs of the respondents.

Analyze Workloads

  • Workload analysis is the phase where we analyze the data collected in the first two steps. Workload analysis gives a clear picture of the involvement of the members of the supply chain organization in various activities.
  • This analysis helps identify how members of the supply chain organization are distributing their time on various activities on weekly, monthly and quarterly timeframes.
  • There are various ways in which a workload analysis can be carried out, such as time-motion study, focus group discussion, survey, etc.

Recommend Structure and Training Needs

  • With the help of the organization structure redesign exercise, we recommend a target organization structure to the client. We also help create a roadmap for smooth transitioning from the as-is organization structure to the to-be organization structure.
  • Any transition’s success or failure eventually rests on the shoulders of the people executing things on the ground. Training ensures that people are ready to work in a new set-up and organization structure efficiently.

The recommendations based on the study are benchmarked with the industry standards to understand clearly where the client stands regarding maturity.

4. Monitoring and Tracking

It’s futile to carry out an organization redesign exercise without having a proper mechanism and metrics to measure success. Clients can track and monitor efficiently by:

  • Defining new metrics that show the contribution of the changed or new organization to the overall organizational performance
  • Having key performance indicators
  • Conducting audits to check if the recommended process is followed
  • Regular (monthly or quarterly) checks on employee productivity
  • Regular (monthly or quarterly) audits to see if day-to-day activities align with the newly defined roles and responsibilities

At Bristlecone, we have deep knowledge and expertise in change management, organization structure redesign, and advising customers on defining their organization structure. Our customers benefit in several ways, including:

  • Optimal running of the business with the help of an optimum number of resources
  • Improved productivity and the enriching experience of the new system usage
  • Redesigned organization structure aligned to new processes and business objectives skill advancement/framework optimization of workforce management

Consultant, Change Management

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