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1.3 Management Steps Required to Execute the Approach

You need to follow some basic steps to solve difficult cross-functional problems, as shown in Figure 1.1. Throughout this book, you can see the details surrounding this approach. You need to establish upfront that this approach requires executive-level commitment and buy-in to be successful. A primary goal of the process is to drive the corporate objectives into a cross-functional analysis that best solves problems for the company as a whole. To accomplish this, senior executives must establish or communicate the objectives and support the overall approach so that the appropriate executives, managers, and subject matter experts also engage in the process.

Figure 1.1

Figure 1.1 Overview of Integrated Corporate Planning Approach

Next to each of the steps listed in Figure 1.1, you can identify the management level required for the process. Each level of management serves an important part in the process. The executive levels of vice president and director must be committed to contribute so that the issues important to their organization and the interactions between the cross-functional organizations are represented in the process. Managers and subject matter experts conduct the actual analyses and assessments based on the overall organizational goals. When gathering the data used in the analysis, it requires involving those that gather and use this data at each level of the organization. Each layer of management and individual contributors play a part in driving corporate objectives into the solutions developed at each level through this process.

A project manager (with a Project Management Professional [PMP] certification) or an internal project manager should coordinate the effort. This project manager can coordinate the meetings with the task force and core team; establish time lines; ensure that the activity remains within scope, schedule, and cost; and provide status updates to executives. Additionally, the project manager must facilitate the definition of functional and system requirements and provide those requirements to the appropriate executing organization, such as IT or various operational groups. Project management techniques provide an excellent way to coordinate an activity such as this.

Identifying the goals and objectives of the organization requires upper management involvement in setting goals and communicating these goals to the decision makers at all levels of the organization. Upper management is interviewed by facilitators who utilize Group Decision-Making techniques to help determine a consensus of the corporate objectives. This involves discussing the corporate and departmental objectives and goals with all the business components, such as operations, sales, marketing, and finance.

To understand the problem, you must understand the decisions that must be made at each level. This includes defining the questions so that the answers are consistent with the corporate and individual goals. The answers to the following questions should support overall corporate goals.

  • How much should I produce of a product in each of the product lines?
  • What research items should be funded?
  • What are my warehousing requirements?
  • How does my production affect my inventory requirements?
  • What should I plan to produce to meet customer demand?
  • How can I optimize scheduling delivery vehicles?
  • And, many others.

You must also determine what you can actually change and what you cannot change within the organization. For example, if an organization wants to determine products to keep in a product line, it is not likely that the flagship items should be removed from the product line without considering their impact on all products.

Fixed operating constraints that you cannot change may also exist. This may include any number of constraints on current operations such as plant capacities, warehouse space, and the amount of resources available for spending in a given year. Usually a whole range of operating constraints exists from manufacturing, warehousing, distribution, and other areas of the company that affect the decision latitude that can be made.

You need to define the operating constraints and the variables associated with the actual decisions to be made, such as things that can be rationally changed in the normal course of business operations. This may include things such as plant throughput, funding of programs, sales commission structures, and others. The idea here is to determine what decisions can be made or changed and what cannot be changed. Understanding the decision limitations within an organization defines the operating constraints of the decision process.

This part of the process involves determining the best criteria or means to measure the success of meeting the objectives and goals in the model. These criteria with their measures or metrics provide the decision maker with a quantification of the degree of success in achieving the goals of the organization. Based on the goals and objectives established previously, this part of the process involves determining the data sources and potential data elements that you can use as measures of success for the organization. You can gather these metrics from organizational data sources or from experts within the organization. First identifying those criteria that specifically measure the objectives is a key step before determining if data is available for the associated metric. Sometimes, a good metric may not have data that you can easily obtain to support it.

Maintaining metrics can be cumbersome. Keeping the number of criteria small, say around 5, should be sufficient. Decisions are usually made on only one or two key criteria, and the rest don't actually influence the decision. Perform sensitivity analysis to determine which of the metrics are the key metrics.

The result of this are the definition of the objectives and then the decisions to be made and the metrics used to measure the success of the proposed decisions.

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