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Cessnas Logistics System - Essay Example

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How did the 21 practices and tools improve Cessna's logistics system The 21 practices and tools developed and implemented by Cessna's VP Michael R. Katzorke and his colleagues transformed the company's "traditional" supply chain management process into one that was more "modern"…
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Cessnas Logistics System
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Download file to see previous pages The process would speed up based on the moods and temperaments of the people involved. It was enthusiasm and cheerleading that drove the supply chain management process, and such could not continue or survive changes in management, not to say that such an antiquated, "boss-centric" way of working would undermine the company's competitiveness in this "modern" age when speed, quality, and devotion to customer satisfaction are what determine the survival of a "modern" corporation.
Katzorke realized that the system had to change into one that he called "more rational", i.e., one attuned to the more "modern" way of management that was based on clear goals and the alignment of the efforts of all involved with and towards these goals. This is in contrast with the "traditional" or old-fashioned system whereby following the rules of the game, such as typing up requisition forms, filling them, ordering, producing, delivery, testing, reworking, etc. follow a slow process of iteration that takes time and costs money.
Recognizing, at all levels of Cessna's organization, that the business world has changed was the first help that these tools and practices gave the company. Without such admission to change, Cessna would not have embraced the 21 tools and practices of change. Although it was only hinted towards the end of the case, Katzorke must have used the language of money - cost reductions and higher profits - that, fortunately, is timeless and easily understood by everyone in the company.
The 21 tools had one over-all goal, which was to rationalize supply chain management, and four objectives or steps that lead to it: driving the best possible supply-based rationalization decisions, accelerating the supply-base rationalization process, improving suppliers' performance, and integrating key suppliers with the company's critical business, manufacturing, and design processes.
The first objective meant that the company had to find the best way to change the supply chain management (SCM) system. This it did by outlining clear targets for the whole company and for the SCM system, communicating these simply and clearly to the whole company (using the catchy slogan Cessna 20/20), and securing total buy-in from everyone. This was an important step when effecting change, because unless total agreement is secured, the work of getting things done will slow down, perhaps remain unattained, or even worse, reverse its course once the idea's champion leaves the scene.
The use of benchmarking with the Baldridge helped the process along, as it linked the change effort with the image of improving quality and focusing on total customer satisfaction. And to guard against complacency and laziness, stretch goals were set. These were ambitious targets that posed a challenge to everyone to do their best and in a way that was consistent with the objective of giving all of one's efforts. This reminded both workers and suppliers that Cessna wants to build the best planes and that this would be possible only if everyone did their best. There was no room for slackening and third-rate efforts here.
The second objective was to accelerate or speed up the process. Having high goals and ambitious targets are good, but if no one lights a fire underneath everyone, those same high goals would be nice to look at and ...Download file to see next pagesRead More
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