Supply Chain Management Capstone Course

ODPG - Mini Case: Operations & Sales

Carver, turned off his computer and walked slowly to his printer. Gathering the 53 page report, he sighed. Not sure if this would help but maybe provide some inspiration.

He remembered a course he once took years ago about alignment and how fundamental it was in organizations but how difficult it was to create. The course focused on several theories, but he recalled the contrast between Michael Porter's theory of deliberate strategy and operational effectiveness as opposed to Mintzberg's theory on emergent strategy.

Unfortunately, he didn't have time to debate their philosophical differences right now. Mike hit the nail on the head - this was his job and he had to figure it out.

Better dive into it he thought. Suhani is trying to align the company in four areas, but he was not sure how effective that really has been.

Jenny in Finance has also suggested they change the reporting structure to use a Contribution Margin instead of Gross Margin to help everyone "understand". He know he needs to get back to her on if that is a good idea or not.

He stapled his report and walked back to his computer. He clicked on the link to read the article on S&OP again and hoped that between these two documents, he might be able to make a dent into this, if nothing else to respond to Ray.

More importantly, he needs to put something together to talk to Suhani.

Carver, thanks for lunch. Was good to get out of the office for a bit and the drive-through was not that bad (ha ha).I'm glad we sat down to chat about this.Difficult to do in an email, but I wanted to re-iterate my points over email so it's clear.

First, I remember the Sales Cycle from my university days, but that's it. To be honest I'm not sure how relevant it is, but maybe that fact that I think that is part of the problem? As much as I would love to know more about the Sales Cycle, my question would be how much does Sales know about operations? By either party understanding this, how does that ultimately help us?

Second, my opinion is we are a top down driven company, which means revenue trumps everything. That means Sales is "allowed" to make a mess of everything an cause havoc because it's part of our corporate culture. I'm not suggesting anyone is doing it on purpose (of that they like chaos) but there is no repercussions, when it comes to trying to make a sale.

In management meetings, Barry can go on and on about competitors, value added, etc. and he has the floor and everyone's full attention - at the end of the day, the focus always shifts back to operations. If Sales looses a job it's because we are not competitive and that leads to all sorts of talk about how efficient our ops really is. I'm not denying we have issues, we all know that - but it strikes me as odd that Sales never seems to get the level of scrutiny - or if they do, it's behind close doors.

Third, I'm not sure we are actually selling the right products. We are so large it's hard to make changes but we have become a "one stop shop" for anything that requires plastic molded parts.As you have learned, that is almost every industry sector in the world. Sometimes I think we really need to look at our company and decide "what do we do best" and try to focus on that? I guess part of that is your job...

Hope that helps. You know me, I'm always ready to support the company's goals so however I can help, let me know. Cheers,

Mike

Hey Mike, please keep this in confidence but read the email thread below. This is a trend I have noticed, not just with Sales & Ops but between many of the departments. Even though Suhani has made her vision quite clear, there seems' to be a silo mentality at all levels (including ours).

I think Ray has a good point and to be honest, I give him courage for brining it up to me.

I wanted your opinion, before I approach him. Related to the Sales Cycle, how much do you know? Do you think his comments are accurate?

Carver

Hi Carver,

Not sure if you remember me, but I'm the Marketing Coordinator for our company and I work directly with Barry (in Sales). I have been involved in some the inventory discussions you've initiated in the past with different people.

I have not been with the company long so I know I'm a rookie and don't know all the internal politics but I'm wondering if you can help me?

As you know there is a huge push from Barry to increase market share. He feels that the more we sell the better we will be even if our margin has declined.He is really worried about the off shore competitors. In my role, the marketing efforts have ramped up considerably. I certainly understand his perspective and for the most part I agree that we need to beat the competition.

However, I believe part of our issue continues to be our cycle times for inventory items. Despite whether it's replenishment or general inventory we seem to never be in stock or have too much. We spend a lot of time "putting out fires" for clients because of this and begging production to squeeze in orders into a schedule that is already fixed.I know the DC hates this because every time we do it they never really know what's coming down the pipeline, and the schedule because meaningless.

Kristin (in scheduling) probably pulls out her hair everytime she gets a message from sales and I know Bren (in the DC) thinks we have no clue what we are doing.

Barry is adamant that Kim Davidson (Director of Operations) and Michael Makinda (Director of Supply Chain) don't' understand the sales cycle. When I speak to Kim or Mike, they feel Barry doesn't care about anything except getting it to the customer at any cost. I know both sides have a point, but it does not seem we can come together on this.

I really believe we can be more efficient if we work together, but I'm not sure what steps to take to do this. I also don't want to overstep my role.

If you think I should just "drop it" no worries, as I'm not trying to stir up trouble. I just thought I would reach out to you. Do you have any advice for me?

Oh, please keep this discussion confidential.If Barry knew I was talking to you, he would be upset. Thanks.

Ray Berkamp (Marketing Coordinator ODP Group Inc.)

Questions

Part 1 - Strategy Respond to Suhani, related to the issue of Sales & Operations. Identify the problem (with examples), the risk (of not addressing the problem both short, and long term and howit impacts company strategy), practical ways (tools) to start to fix the problem (s),

b. Part 2 - Financial Response to Jenny (in the form of an evaluation matrix) - should the company switch toContribution Margin or continue to use Gross Margin? Present the matrix and then state aconclusion as to why (your recommendation)

c. Part 3 - Coaching/ Mentoring

Response to Ray (in the form of an email) then explain (in point form) your methodology (whydid you respond the way you did and suggest what you did)

Reference material includes https://supplychainminded.com/sales-operations-alignment/