Performance Improvement and Strategic Employee Communications

Improving inventory management and customer service

Challenge:

Global healthcare company’s multiple, siloed forecasting and planning practices led to thousands of customer backorders, significant inventory surpluses and huge increases in distribution costs. Management needed to engage employees to align all procurement, production, sales and distribution planning against a single demand forecast.

Actions:

  • Partnered with Manufacturing, Sales, Procurement, Distribution, Finance, Marketing, Information Technology, Human Resources and Communications to develop a strategy for changing the culture and increasing individual accountability for inventory management
  • Created a compelling story for change and a communications infrastructure between corporate and the plants to support implementation
  • Developed a “people vision” for new roles and responsibilities in planning processes
  • Provided communications to engage employees in new inventory management processes
  • Coached executives on communication and supporting behavior required to launch effort and win employee support
  • Helped involve employees in decisions

Result:

  • At the first implementation site, the company saved $3 million and reduced inventory costs by 20%
  • The company anticipates annual savings of
    $5-$10 million
  • Employees identified a reporting error and helped avert thousands of customer backorders
  • Increased employee accountability for sharing information across functions to meet customer demand
  • 87% of employees understood goals of new supply chain management initiative prior to launch of new system  -- a 43% improvement over 8 months

© 2005 Gagen MacDonald LLC