Design ‘Roundabouts’ to Manage Supply Chain Complexity

By March 25, 2019Beyond Supply Chain, News
190321 March Cover

Last summer my son and I were driving to our hotel in Galway, Ireland, amid the traffic and fervor of a professional football (soccer) game that had just let out. We travelled several miles and through five roundabouts as streams of fans waved flags of their home team (the game winner) out of their car windows.

Everything went smoothly until we came to an intersection where traffic lights had been turned off in favor of local police directing traffic. The police, it turned out, were not nearly as efficient at processing the volume of traffic as the roundabouts we experienced over the previous few miles.

 

190321 March 1 (Web)

This is the perfect metaphor for what we see in complex, global supply chain organizations today.  While we try to capture the nature of our supply chain organizations in organization charts, their true nature is really in the myriad intersections of functions, processes, tasks and decisions that need to be made daily.

Managing the traffic and risk at the intersections represents the traditional role of the leader or manager. But with more intersections and heavier traffic, the ability of the manager to see what is happening and keep traffic flowing is limited. In study after study we see companies that struggle to manage the amount of change, to collaborate more effectively, and manage the conflicting goals and objectives of the organization.

190321 March 2 (Web)

And while it may appear that managers are insufficiently engaged, it is more likely that our expectations of what they can reasonably manage have exceeded their capacity to deliver. We often see leaders and managers deeply involved in the operations of the business, engaged in the daily processing of data or resolving crises as much as the individual contributors they lead. But more than that, management is driving the coordination of solutions across functions and business units.

190321 March 3 (Web)

So, what we know is that managers and executives are responsible for managing the traffic flow and intersections, and that two of the biggest ongoing challenges to the organization are managing traffic flow and intersections. The model must be broken. But what comes next?

What is the Solution?

Enter the roundabout (some call it the traffic circle or rotary). A roundabout is, at its essence, a self-governing traffic system. Instead of having traffic lights or police officers managing behaviors and decisions, roundabouts are engineered to shape the behaviors and decisions of those entering and exiting the intersection.

What are the benefits of roundabouts? According to the Washington State Department of Transportation , roundabouts reduce delay and improve traffic flow, improve safety by reducing the number of collisions, are less expensive and use less space than traditional intersections. Wouldn’t we all love to have organizations structured to reduce delay, improve the flow of decision-making, reduce the amount of “collisions”, be less expensive and take up less space?

But like all “self-organizing” systems, roundabouts don’t just happen — they need to be designed, engineered and governed to succeed. In order to reap the benefits of the roundabout, three conditions must be met:

  1. The roundabout must be engineered correctly to foster the flow of traffic that is likely to come through the intersection.
  2. Those using the roundabout must know and understand the rules of driving through the roundabout.
  3. Those using the roundabout must be willing to follow the rules of driving through the roundabout.

For supply chain leaders this means we need to look at new ways to engineer our organizations to self-manage those major intersections. When we engineer an organization to embed cross-functional teaming as the way to manage overlaps in functions, processes or services, we empower individual contributors to manage intersections on their own. Leading companies design this empowerment into the business for both operational decision-making as well as for innovation, improving the flow of decisions, reducing the number of “collisions” across teams, and expanding access to new ideas.

The starting point need not be exotic or even at scale. After all, every town has its first experience with a roundabout. Start in critical areas like sales and operations planning or new product introduction where the goals are clear and you can empower staff to make decisions and execute without relying on management to intervene. Start small and add more as you get the engineering right for your supply chain.

Ken Chadwick, Research Vice President, Supply Chain Research and Advisory, Gartner

 

Avatar

Author Guest

More posts by Guest