Supply Chain Management and Cross Functional Teams

Author(s):

Maytee Aspuro, C.P.M.
Maytee Aspuro, C.P.M., Assistant Administrator, Wisconsin Department of Revenue, Madison, WI 53702, 608/264-6879, maspuro@dor.state.wi.us

85th Annual International Conference Proceedings - 2000 

Cross function teams (CFTs) can be defined as the collaboration of experts with different technical and functional knowledge to solve a complex problem or complete a complex task. In a best practice organization CFTs are the normative method of doing business. Supply managers must understand the purpose and composition of CFTs, and how best to manage them.

CFTs have been applied to supply management for a variety of purposes. They include:

• General Project
• Procurement (RFB/RFP)
• Commodity
• Product Development
• Process Improvement
• Quality Assurance
• Strategic Alliance
• Supplier Assessment

In general CFTs come in three different variations: project, continuous and virtual. Each is defined below:

Project teams have a defined beginning and end point. They are created to address a specific problem that needs to be resolved. Key tasks of the team include planning, scheduling and control. Like any project the team's performance is evaluated as a function of how well it has managed cost, time and project scope. Project teams are often used during a reengineering initiative.

Continuous teams are on going having no set ending date. They tackle a series of problems and processes through to resolution. Continuous teams are common in quality improvement (QI) initiatives.

Virtual teams have a defined beginning and end point. They address a very specific problem of narrow focus and exist for a short duration of time.

• The following illustrates the different applications of CFTs in the supply management arena:
• General Project Examples
• Implementation of a Disadvantage Business Program
• Design and implementation of supply management system
• Procurement/Commodity

Procurement (Project). Completing market price research, supplier selection, performance criteria, delivery, warranty and other required terms. The completion of a complex RFP/RFB would be a common example of a project.

Commodity Team (Continuous). These teams address all procurement issues noted above as well as long-term productivity and quality issues, and long-term market tracking.

Product/Service Development

Key to the viability of an organization, product and service development presents a number of opportunities for CFTs to translate an idea/concept to production and then to market. Contributions from the following technical experts could benefit the effort.

• Design
• Engineering
• Purchasing
• Manufacturing
• Quality Assurance
• Finance
• Marketing
• Determining the role of supplier(s)
• Early supplier involvement
• Determining the role of customer(s)
• Customer research and/or customer initiated development
• Concurrent vs. sequential task completion

CFTs may enable tasks to be completed concurrently resulting in a compressed timeline. For example, designers and engineers may work together in the creation of a design and its translation into a prototype. Supply managers may be included at this stage to research different raw materials or parts (value analysis).

• Concept
• Design
• Prototype
• Low-volume manufacturing

There are a number of advantages in using CFTs in product development. They include:

• Early problem identification/resolution
• Increase/accelerated organizational learning
• Customer orientation
• Decrease product development cycle
• Decrease manufacturing cost
• Decrease customer service cost
• Process Improvement Examples
• Implementation of Procurement Card Program
• Improve link between procurement and asset management
• Implementing an automation initiative
• Quality Assurance.
• Best practices mandate that supplier participation be a component of any serious quality assurance effort.
• Supplier Assessment.

CFTs are an effective mechanism in completing supplier assessments. One point of caution is that a large CFT may intimidate a supplier. It is important that the supplier understand why specific individuals are included on the team. Benefits of using a CFT for supplier assessment include:

• Increased scrutiny in both depth and scope of the assessment
• Raised expectations may lead to improved performance
• Distribution of tasks will increase the probability that all assessment related tasks would be completed.
• Organizational learning will increase as a variety of technical experts work together.
• Improved communications both internally and with the supplier
• Improved relationships. If relationships are strategic efforts may result in an alliance1.
• Establishing CFTs/CFT Charter. The establishment of an effective CFTs does not come easily. A methodology comparable to project management should be followed. Effective teams require executive management support, an executive sponsor and a clearly defined methodology.
• Executive management support must be top level, visible and consistent. The executive sponsor must be knowledgeable, in a position of influence and ultimately held accountable for the team's efforts.

The CFT methodology should include a charter. The charter is a plan that documents critical information and is a point of reference throughout the life of the CFT. Specific charter components include:

• Mission
• Goals/objectives
• Roles
• Authority
• Performance expectations
• Mission

The mission documents the reason for a CFT's existence. It is a broad statement that addresses the questions of what must be done, for whom, why and how.

Goals/Objectives

The CFT's goals and objectives must be defined and prioritized. They should be: SMART (Specific, Measurable, Achievable, Realistic, Time-Based); comprehensible, meaning that they should be understood by a lay person, document the terms of deliverables and the desired end results

Roles.

• The following roles should be defined.
• Executive sponsor
• Team leader
• Team members
• Support
• External parties
• Authority.
• The decision-making hierarchy must be clearly defined. Delegation should be encouraged as much as possible.
• Performance Expectations.

The performance expectations must be aligned to the established goals/objectives. Budget, timeline and deliverables must be clearly defined.

Methodology. The success of a CFT is dependent on its make up. Appropriate representation must be achieved. The composition of the team should result from a needs assessment. The size of the team must be kept to a manageable size. Technical experts can always be brought into the team as needed.

The team leader should be chosen based on their knowledge of organization, authority and team management skills. An effective leader must demonstrate confidence without arrogance, lead by example versus dictation and be an effective communicator.

Member Selection.

Member selection should be based on skills. This is far more important that having functional representation although the latter may be deemed to be politically expedient in an organization. Desired skills include technical knowledge, creativity, risk taking, and the ability to communicate and build relationships. Individuals with a non-political organizational perspective are best.

Other issues to address in member selection include:

• Financial Vested Interest - Suppliers
• Vested Interest - Employes (monetary, personal and psychological)
• Member Training.
• Training is often overlooked. Technical, process and interpersonal skills must be developed if not already present.
• Resource Commitment.
• No team will succeed if it is not given the necessary resources to achieve its goals. Resources include the members, team support (clerical, consultants, etc.) and expenses (research, travel, equipment, etc.)
• Team proximity to one another is important to building a team. Given existing technology a great deal of work may be accomplished in a virtual environment (email, teleconferencing and video conferencing). That said, the ability to meet face to face cannot be underestimated as a contributor to a team's success.
• Periodic Team Assessment.
• The executive sponsor should conduct regular status meetings. In addition, benchmarks should have been established in the charter or soon thereafter. Benchmark reviews must be conducted to ensure progress and to address any concerns early in the life of a team.
• Rewards.
• Team members must be cognizant of the rewards inherit with working in a CFT. They include exposure, career development, public recognition and consideration for future assignments. Teams should be rewarded as a whole. Financial rewards must be distributed equitably2.

Supply Management's Role. Supply managers should not wait to be asked to join a CFT. Supply managers must be proactive, taking the lead to establish teams or to insert themselves into teams that would benefit from their expertise. Where supply management issues reside on the periphery (which is less and less often), supply managers must offer themselves as an on call technical expert to an existing CFT.

1. Strategic Alliance: Bilateral business and technical exchange between buyer and supplier that benefits both parties. Alliances will maximize leverage and synergy of resources.
2. Financial rewards may not be available. The public sector does not always enjoy the same flexibility exercised by the private sector in distributing bonuses or merit raises.

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