Even though the roots of Supplier Development lie in Lean Improvement the role of standardisation has been significantly overlooked in most Supplier Development practises. In the cases where it has been emphasised it has mostly been done as a record keeping function without embedding it in the operations of the company being developed.
To many the term Standard Operating Procedure is quite boring and very few, if any, Supplier Development approaches focus on this. It is sad though, as it is the pivotal point around which the success of any Supplier Development approach lies. In most management textbooks you will find a significant focus on innovation and change. Unfortunately this has been emphasised to the detriment of consistency and discipline.
For those of us who quote the Deming PDCA cycle as the source of continuous improvement we sometimes forget that it cannot function without the foundation of SOP’s. Very rarely, however, do we ask ourselves how effective the embedment process was, as most of the focus is on the short-term results.
We cannot downplay the importance of incremental innovation or disruptive innovation, but we should not lose track of the importance of standardisation as a method to drive growth within the economy.
Standardisation requires Creativity
The embedment process of standardisation is a highly creative process and not only leads to effective discipline at work and increased productivity, but, if done with the right culture, will also lead to higher levels of employee participation and increased employee morale.
The standardisation process starts with documentation. Any first attempts at this should be relatively simple and normally this happens through some kind of process descriptive. Do A, then do B, and then follow with C. Any successful Entrepreneur understands the pain of documenting these systems and processes for their organisation. As the company increases in size the need becomes greater to simplify and visualise these standards, leading into 5S and then ultimately into some form of Poke Yoke (Mistake-Proofing).
Many in South Africa have mistaken the 5S continuous improvement methodology as a housekeeping system. Sadly having this view does not require creativity and almost invariably leads to a carrot or stick approach to upholding discipline.
A simple method of standardisation that many forget is the creation of performance targets. Viewed from this perspective, a target is a documented standard that is to be achieved over a period of time. The process of visualisation and employee engagement around the setting of the targets ultimately leads the higher results. Effective managers who understand this utilise root cause analysis to detect where to change the standards. Those who don’t understand this increase the volume of their shouting.
Supplier Development practitioners that want outcomes but are not willing to invest the time to embed the discipline and standardisation processes will find themselves gaining short term improvement without long term results.
Companies where standardisation has effectively been embedded should experience a culture of constant value discussions. Embedded in the company is the understanding of the trade-off between the value of the standard now vs. the change of the standard in the future.