Moving Your Inventory Team from Defense to Offense

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Sven Aunapu, Director LifeLine Services and Analytics, Blue Ridge

Today in Episode 10 we are sitting with two former inventory analysts who have now evidently turned into offensive coordinators! Welcome, Sven Aunapu and Dan Craddock.

Sven is Director of LifeLine Services and Analytics, joined by Dan, our resident inventory planning evangelist. They are here today to share 7 steps to move your inventory team from playing defense throughout the day to playing offense when forecasting demand and reporting on their success.

Enjoy the show, share it, and subscribe to PlanningPosts for more great supply chain planning resources from our playbook!

Episode 10 Show Notes

Todd: Guys… You have to explain this to me and to our audience out there.

You both claim that, in your inventory days and in your travels, most inventory teams find themselves playing defense way more than they would like. I need to hear more about this phenomenon.

In addition to both of you being education specialists and consultants in the area of inventory optimization, you were both inventory analysts, correct?

Dan & Sven: That’s right, Todd.

Todd:  And both of you say it has become the norm for inventory teams to always be on the defensive?

Dan & Sven:  Indeed. Absolutely.

Todd:  Okay, Dan, let’s start with you. What does that mean and what does it do to the team?

Dan:  Todd, when you look at this from 30,000 feet or from this podcast studio, it sounds amusing. But I will tell you that when you live in it, being on the defensive 24/7 does not feel amusing!

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You see, we have chosen a profession that mainly gets feedback when things go wrong.   When I started as a replenishment analyst years ago, I was told the following:  “Hey kid, know this… When you are out of stock, it is your fault. When you are overstocked, it is your fault. When things go well, it is thanks to the sales team or the store teams!”

I learned pretty quickly that my goal was to minimize the noise! Minimize the noise from sales and customers when out of stock and from our CFO when overstocked.

The goal of the inventory planning profession for many became…

‘Stay. Out. Of. Trouble.’

Because of this, you are always playing defense and explaining yourself. Even traditional reports that would hit everyone’s desk in the morning started with the Out-of-Stock Report, which basically highlighted, “Here is how Dan hurt the company yesterday.”

Sven, you lived this same world as a replenishment buyer in both wholesale and retail didn’t you?

Sven:  Yes, the same world, the same people, same approach — just different names.[Sven elaborates on his experience].

Todd:  So if that is the case, let’s make this really worthwhile for our audience. If your inventory teams are facing this dilemma, we need to break down why it is happening and give them hope and a plan to make it better.

Before we talk about that plan, is there hope? Have inventory teams successfully made the move from playing defense to playing offense?

Dan:  Todd, there is most definitely hope. And many inventory teams have flipped the script and can share incredible stories of what a difference it makes in the confidence of the team.

There are inventory leaders out there who will tell the story of their team growing from the LEAST respected department in the company to the MOST respected department in the company. Henry Schein, Inc. is a great example; one of our most popular podcasts covered their story from SVP Supply Chain Paul Rose, including strategies for forward buying. Listen here.

The change-over can happen in just a matter of months. We’re here today to share what these companies did. To share the steps.

They watch a transition from inventory personnel avoiding company meetings to the sight of them leading these same meetings.

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Todd:  Sven, when that type of turnaround occurs, when do these inventory teams know that they have won the battle?

Sven:  That’s a great question and one of the most common things we hear that triggers a ‘Wow!’ reaction. It’s when peers in other departments start approaching the inventory team to make a career move. They want in! They approach them and say, “You guys appear to have momentum and respect. I want to be part of that.”

That is one of the ways you know you have completed the 180 turnaround.

Todd:  Wow, so suddenly, the inventory team becomes THE destination and the cool place to be. Instead of people approaching with complaints, they approach and want a job.

So guys, what are the key steps to make that happen? What have you seen? What is the plan?

Dan:  We have 7 steps to share with you and the PlanningPosts supply chain community out there. As we share these steps, you will see 3 themes:

  1. To stop playing defense, you need to start playing offense
  2. You need to become the center and the source of data/information
  3. You need to continually educate the company

Sven, let’s you and I start with the first one. I will step through our outline and you explain why these pieces are so important.

Inventory teams are so used to playing defense that we often go right into that mode and never consider another approach. If you aren’t careful, it is easy to fall into a victim mentality. And if the team falls into that trap, then it becomes the image of our department.

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The cure for this is to go proactive! You know you are going to be hit with questions and concerns, so start playing offense and hit first! Here are the 7 steps to doing this:

STEP #1:  The reports and data that go to the company… those need to come from US!

They can’t be sent from IT, or some central email. If the information comes from another party, it puts us on defense.

Sven:  That’s right; it then comes across as, “Look what they did,” or “Look what they did wrong.” It automatically makes you want to defend or explain what happened.

Not only do you start here, but this might be the most important piece to change. From here on, reports and data need to come from us, the inventory team. This way, we are saying, “We know what happened; let us share with you.”

Todd:  Okay, that makes sense. It initially sounds like a small thing, but it’s a big thing, isn’t it? It changes the impression of things completely.

Okay, and is it still the same information?

Dan:  No. Changes and enhancements are normally long overdue. That’s our next step.

STEP #2:  Let the team create a format and template that shares numerous views, as well as notes where needed.

We often only view yesterday; but with today’s analytics, why not show a 15- or 30-day rolling average as well? Are we trending up or down? And much more.

Sven:  Yes, go beyond supplier and category. Show if certain regions or item types are experiencing problems. If suppliers are having problems, allow us to learn when things will improve, and highlight suggested workarounds to the sales team and beyond.

Dan:  Todd, that leads to our third step.

STEP #3:  Create an Inventory Update Formula for sharing information.

A smart template. Create a flow which the entire team can follow in emails, voicemails, newsletters and at live meetings. An Inventory Update Formula looks like this:

  • Highlight the Good
  • Boldly display the Bad, including the causes
  • Provide Warning on upcoming issues and potential problems
  • Educate during every update
  • Ask Questions and welcome input

Sven:  You know that formula might appear really simple and basic, but it works. It provides the important position that states, “We have victories from past work. We know about our issues and the causes. We have deployed plans for improvement. And we want to help you avoid upcoming problems through our insight and knowledge.”

When the company sees that we have clearly taken responsibility, even when things are not perfect, their respect level grows. By inviting more questions and not simply deflecting and trying to escape, you actually elevate the department.

Todd:  So the first 3 steps are very much going in a new direction. These are plays from an offensive coordinator. I would imagine that once you rally the team in this direction, it becomes much easier to continue playing offense?

Dan:  Yes, it does become easier. The ball is rolling. Next, as you start to master that formula, you put that formula to work as often as possible.

STEP #4:  Go tell your story!

Switch from avoiding meetings to requesting invitations to meetings. Ask to speak at each meeting in each department. Use the formula. As you create this information, use it as often as possible.

Dan:  Sven, in your mind… Who goes to these sessions?

Sven:  I have two main thoughts on that.

Everyone on the team needs to be on the rotation in attending these meetings. They all need to represent and they all need experience speaking.

I suggest always going in as a group of at least two. Show strength and a sense of team by going in and sharing with a one-two punch.

Perhaps one of you provides an update on the team in general, and the other gets into the numbers. It shows unity and strength. It also makes it much easier for each team member.

At first, it might always include your team leader or team champion; but over time, it can probably be any combination.

Todd:  Guys, I can picture the impact, but how do you prepare your team for this?

Sven:  Ah, you must be wondering about Step 5…

STEP #5:  Teach the team to shine.

You have to teach the team to speak in public and teach them to deliver the message.    Don’t protect your team from these situation. Prepare them for these situations.

Nothing improves the confidence of a person or team more than equipping them and showing that they are capable of a great presentation. Teach them to prepare and present a short, but strong presentation.

Dan:  We have seen individuals and teams transformed by this one area of development.   Lots of testimonies here.

Gather the team for training. They will hate it at first. Teach them how to create a presentation and how to prepare for a great presentation. Their first one may be terrible, but they will grow quickly. Let them push each other from fair to good to great. Then have them keep getting back together to present to each other every couple of weeks.

Before you know it, they will be the best group in the company. They will be asked to lead meetings as if they have a special gift which others don’t have.

Todd:  Great advice. Game-changing.

So live meetings are a great opportunity. What other events or formats can you use? What’s the next step?

STEP #6:  Put your new brand to work through media.

Dan:  Smart email and newsletter updates can be a great opportunity to do this.

Think about it.  You want to enhance the brand of the team, right? What about starting with a weekly update email template that looks professional, and even reinforce the name and mission of the team? Something like…

Acme Supply Inventory Update:
World-class service with a passion for financial success

Make the email template very visually friendly with infographics and helpful info.  Remember, it is a chance to highlight good and bad while educating along the way.

Sven:  Also, make it fun and unpredictable.

Highlight some interesting fact each week, or something about one of the new or current team members. Don’t make it long or boring or confusing, or else they won’t open it the next time.

Have a professional create the template and then execute with that.

Now you are executing a very diverse offense. If you do this well, others in the company will want to mimic you.

Todd:  So now I picture an atmosphere in every retail and wholesale organization where the inventory team is playing offense. What else can inventory teams use to guarantee success when they start making these changes?

Dan:  Well, there is a big one, and we mentioned it up front. Step 7 might pay the most dividends.

STEP #7:  Work hard to become the central point of data analytics and information.

With these opportunities to share and educate, supply chain analytics changes everything.

Inventory teams have great supply chain data, and can now turn data into stories which all of the partner departments need to see. Every meeting, email and newsletter is a chance to show interesting facts and suggest action. An offensive moment.

As teams do this, others will start to approach them for more data and more insight.

Sven:  Yes. I have been able to watch this very closely for several years. Every department in the company realizes that the inventory team has the data analytics and knows how to create easy-to-read planning dashboards. They become the source.

We have seen many new supply chain analytics departments born out of the success of the inventory team and their data work. As this happens, it continues to elevate the inventory team and put them in the center of the organization in the eyes of the company.

Once an inventory team starts playing offense like this, they will never really have to play defense again.

Todd:  Very interesting insight into how some of those departments have moved from worst to first. The plan and the steps make sense.

So guys, let me summarize those 3 themes again that support these steps:

  1. To stop playing defense, you need to start playing offense, by being out front and proactive.
  2. You need to become the center and the source of data/information. By proactively sharing supply chain analytics and insight, the company will start to come to you as the leaders.
  3. You need to educate the company. Use every meeting, email and piece of data and turn it into education for the rest of the organization.

Hey, thanks to our two Offensive Coordinators! These 7 steps should be very helpful to our listeners. For more great supply chain podcasts and practical supply chain planning strategies, be sure to subscribe to PlanningPosts right now.