THE BUSINESS REQUIREMENT

Our Client, the chemicals division of a large international pharmaceutical company, planned to implement a strategic production scheduling system. This system was intended to establish production goals for API products to be produced at five production facilities in as many different countries. The strategic scheduling system would provide data to be used as inputs for the local scheduling systems at each of the production facilities as well as data to optimize raw materials purchasing for all production facilities.

THE PROBLEM

The choice for the strategic scheduling system had been narrowed to two options, either of which possessed the required scheduling capability. One option was to expand the use of the Client’s ERP system to include the strategic scheduling functions. This option offered minimal cost, as the Client already owned sufficient licenses and could run the expanded functions from its existing hardware. The second option was to purchase a scheduling system from a different vendor and interface it with the ERP system.

The second option offered both superior “off-the-shelf” user interface and comprehensive reporting. In contrast, the user interface of the first option was more time consuming and difficult to use and equivalent reporting would require configuration and testing to achieve similar capability.

The ease of use consideration was prominent in the Client’s thinking. The personnel who would operate the strategic scheduling system would be managerial-level people who would rotate through their assignments on a two to four year cycle. Moreover, they would apply their knowledge only a few times per year: once, to run scenarios to develop an annual strategic plan and on occasion for ad hoc scenarios.

THE HOM-BASED SOLUTION

Clarkston and the Client developed an HOM-based depiction to capture the salient facts and assumption in the HOM categories. This documented an agreed-upon understanding of:

• The people who would use the scheduling tool, how long the stay in the job, and how frequently they would be using it
• The structure of the scheduling organization and how it would interact with the greater organization
• The process to be applied with certain details about process steps and timing
• The technology including the advantages and drawbacks of either option.

The result clearly showed the impacts of the decision for either option on the production scheduling organization in particular and the overall supply chain in general (please see Figure 1).

 Using this model as a basis, the Client then applied Clarkston’s HOM Assessment Tool to analyze how each of the two technology options would affect the Client’s business processes, organizational structure, personnel and the multiple inter-relationships among them. 

From this analysis, the Client was able to assess how each of the two options would affect the alignment of its culture, workflows, responsibilities, capabilities, functionality, and flexibility with respect to its level of organizational complexity.   

The result: the Client was able to make a choice between the options with confidence and proceed with the implementation.

BENEFITS

• The HOM based categorization of the underlying assumptions and facts about the global supply chain organization provided a view that allowed pinpointing potential issues in the organization in a detailed and actionable fashion.
• The HOM approach enabled executives to see interactions and potential conflicts that would result from choosing either option with remarkable clarity.
• It allowed executives to quickly cut through a fog of conflicting factors to organize and clarify their thinking.
• The combination of the worksheet and the HOM Assessment tool provided an environment to work through several what-if scenarios prior to implementing any solution, saving considerable cost, time, and effort.
• The approach also provided a framework to continually measure and improve performance.