Most changes are complex. But there is still reason to be impressed by the reorganization the Danish Ministry of Defence engaged in, when establishing a reorganization of their supply chain. Read about how their initiative secured them the 2019 Danish Supply Chain Award and get inspiration for how you can push transformations within your own organization.
Reorganizing and establishing a professionally run supply chain requires an ambitious, structured and hands-on approach. For the Ministry of Defence, this meant organizing changes in the form of an actual program with a dedicated PMO. Among other things, it was this approach that helped secure them the 2019 Danish Supply Chain Award, awarded by effectivitet.dk. Peak was on the frontline when our consultant, as manager of the PMO, was in charge of ensuring governance and control right from the establishment of the program, during implementation, and through to completion and transfer. You can learn all about our approach and method below.
Why was a reorganization necessary?
It was originally a report from Rigsdivisionen, that in 2015 put the supply chain on the agenda. Supplemented by an internal analysis, it was concluded that the Ministry of Defence needed a better overall management foundation and connection between purchases, stock and consumption. This conclusion resulted in the decision to carry out a reorganization containing three general goals:
- An increased availability of capacity and materials
- Faster and more effective supply
- Optimally dimensioned stock
But how do you address a reorganization of 800.000 items and 950 employees within a geographical area as large as the distance between the Arctic and Africa? The first step is to acknowledge that when you are working with such organizational complexity, it is necessary to view the initiative as a real change program.
There is a long way from theory to practice
According to program director Kim Astrup Jensen, the big challenge for the Ministry of Defence was their lack of experience and know-how in this particular area. As there had never been a program office in DALO before 2015, they really needed a standard bearer, who could bring direction and governance to the whole program. Peak’s consultants were given this task, and as outside persons they could contribute the necessary best practice.
“Having a ‘guard dog’ who challenged the things I said, made for far better results,” says Kim Astrup. “An inhouse solution might not have prioritized the right tasks, not secured satisfactory documentation, or might have stumbled due to a lack of experience.” Because even though the process definitely has been challenging at times, it has helped ensure that the right decisions were made throughout the entire process. Among other things, this was the result of sticking to 4 essential principles:
- Establish your program organization
First and foremost, you need to establish frameworks and conditions for problem solving. A close collaboration between the projects, which develop solutions and the parts of the business who utilize them, is essential. And it is a fact, that the organization expects to reap the substantial benefits which were the goal of the investment. This calls for a definite program organization. A program organization typically consists of a program board of directors, a program steering committee, program manager, program director and change manager. As well as, of course, a program office, which establishes and ensures governance, offers steering support and management support for the program’s projects and program management, keeps track of the program’s data, agreements, expectations etc. The program office functions as the program’s “Information”, and ensures, that decisions are made on a qualified basis (“informed decision-making”) on a management level.
- Make a flexible program-plan
A good program plan must be made on the basis of data. In this way, you can continuously prioritize which areas are lacking behind and where you see the biggest potential for benefits. At the same time, the plan needs to be open to possibly changes that may arise as you learn new things along the way. Planning has to be to be viewed as a process that teaches everyone involved about the tasks. The plan itself is an output from the planning process, which gives us the tools to get on with our tasks, but the planning process must be repeated, and the plan updated – this is an iterative movement throughout the entire program. Programs should be carried out in “waves” within a fixed timeframe and each wave must produce deliverables and solutions, that become implemented and create changes – small steps towards to organization’s end state.
For the Ministry of Defence, this meant that the program was completed in six waves, each wave consisting of a number of projects, that were carried out using a range of agile techniques.
- Do not underestimate competence development!
Establishing a development program on the basis of best practices undoubtably requires resources. Both in the form of time and economy, but undeniably also in the form of competent employees. The Ministry of Defence could clearly see early on in the process, that they needed further professional range and depth for their program. This meant (on top of an intensive recruitment process), that competence development of employees also become a central focal point. This ensured suitable professional competencies both within the supply chain, project management and program management.
- Communicate a lot and often, and establish good cooperative relationships
Communication and commitment are the key elements of change. Without involving and appreciative collaboration, it can be difficult to create the desired behavioural change and ensure the necessary commitment to change among employees and business. This can ultimately make the transition to operation very difficult. Within the Ministry of Defence, the collaboration with the business was anchored in a forum of ‘change agents’, who were involved in both planning, execution and evaluations. This collaboration with change agents was accompanied by an intensive information- and communication initiative, which utilized different channels for different purposes:
- Themed articles
- Educational- and introductory videos
This was supplemented by frequent presentations and dialogue meetings at places of employment around the country.
“Communication within an organization like the Ministry of Defence can only be underestimated. You cannot count on a post on the intranet or a news E-mail reaching all branches of the organization. That requires dedicated effort.”
- Kim Astrup, program director